Linking the Public Benefit to the Corporation: Blockchain as a Solution for Certification in an Age of “Do-Good” Business

Margaret D. Fowler · 20 Vand. J. Ent. & Tech. 881

Abstract

As part of its now-infamous emissions scandal, Volkswagen spent tens of millions of dollars on advertising geared toward environmentally conscious consumers. The scandal is an example of “greenwashing,” which, along with the corresponding term “fairwashing,” represents the information asymmetry present in product markets that involve claims of social and environmental responsibility in companies’ production practices. As consumers and investors demand responsible production practices from both traditional corporations and entities organized under the newer corporate form known as public benefit corporations (PBCs), it becomes even more important to verify that those entities’ supply chains are, in fact, meeting standards for the social or environmental responsibility that they purport or strive to have. Blockchain technology is a promising tool for providing the level of accountability that has become necessary in the modern business world. As an electronic, decentralized ledger, it could provide an effective disclosure method for the purpose of certifying that businesses’ supply chains comply with standards for social and environmental responsibility. This Note argues that blockchain’s inherent transparency fosters the accuracy in certification needed to create prosocial, procompetitive effects in the growing market for companies with sustainable business practices. These effects should outweigh potential antitrust concerns that could give rise to legal challenges against a uniformly adopted system of blockchain-based certification methods.