Oslo, Norway-based DNV GL, the well-known risk management company, is transforming the value proposition of their assurance services business, with the promising blockchain technology. DNV GL has teamed up with Singapore-based VeChain, to leverage the pervasive transparency offered by blockchain.
DNV GL’s key businesses are following:
- They occupy leading position as a classification society and advisor for the maritime industry. They enhance safety, quality, energy efficiency, and environmental performance of the global shipping industry.
- As leading technical advisor to the oil & gas industry, they provide advisory, risk management and classification services to their global clients.
- They offer their renowned testing and advisory services to the energy companies.
- As one of the leading certification companies in the world, they provide business assurance services encompassing organizations, products, people, facilities and supply chain of their clients.
- They are the leading provider of digital solutions for managing risk and improving safety and asset performance in maritime, oil & gas, energy grids, and smart cities.
The underlying theme of DNV GL’s business is assurance, certification and risk management. This is business of trust. This is becoming increasingly important, not only due to the corporate scandals that shook the business world earlier, but also due to the fundamental trend of democratization of information. Conscientious consumers now do not want to buy products manufactured by exploiting environment and communities. Responsible businesses no longer want to purchase raw material sourced using unethical means. This increasing awareness has been possible due to the wide dissemination of information, globally.
Thankfully for the conscientious consumers and responsible businesses, there now exists technology to help them in judging whether a particular merchandise was produced responsibly, or whether raw material was procured ethically. For e.g. customers can scan tags attached to wine bottles using their mobile phone, and access information the manufacturer, distributor and logistics company provide.
The tags in the above example are powered by Internet of Things (IoT). IoT is a technology in which machines can communicate between themselves. Physical devices such as vehicles or home appliances are embedded with electronics, software, Radio-frequency identification (RFID), and network connectivity, allowing the devices to exchange information. Each device can be uniquely identified, while the embedded computing system is able to transmit data over the existing Internet infrastructure.
The information provided by the IoT technology still needs to be stored and processed in a tamper-proof manner, where the records are immutable. This is where blockchain, a technology where a network of computers maintain a shared, verifiable, and permanent record of data. In this distributed database each node is considered as a ledger, and the entire database is maintained by all nodes. Changing or deleting an existing block is not possible, hence, to update a blockchain, a new block has to be created. To create a new block, each “Miner”, i.e. the combination of powerful software, specially designed hardware, and their user, has to provide proof of work (POW) for the last recorded block in the blockchain, using a massive number-crunching operation done at high speed. This is in an environment where many other miners are also doing the same, which makes it more difficult for any miner to provide POW. This makes updating blockchain very hard, i.e. only when a miner provides proof of very significant number-crunching work done, he/she gets to create a new block. Hacking blockchain is, hence, not economically viable.
The customer is able to scan those tags and view information provided by the manufacture or the logistics company in her mobile phone, because of a commercial blockchain platform that VeChain has launched. It’s this power of blockchain that DNV GL is about to leverage.
DNV GL and VeChain have jointly announced that they are developing a blockchain platform to track sourcing and supply chain information for the following verticals:
- Food & beverages,
- Fashion;
The system will make the underlying information behind DNV GL’s assurance service immutable and hack-proof, significantly increasing the confidence level their clients can have about their assurance services. There is a long-term objective of applying the solution to the aerospace industry.
Luca Crisciotti, CEO of the Business Assurance division of DNV GL, and Sunny Lu, CEO of VeChain, have expressed confidence about the positive impact blockchain will bring to the assurance business, essentially a business of trust. They are not alone in their optimism about the transformative potential of blockchain in the assurance business. As reported earlier, Tel Aviv, Israel-based QED-it has launched their zero-knowledge proof diligence tool powered by blockchain. This will help an auditor in getting the required proofs from a company about the relevant business facts, without divulging proprietary information the company must guard for the sake of their competitiveness.
