Similarity between WBCSD PACT and SWIFT technology | A deep-dive into history and lessons to learn
Data exchange technology is a fascinating topic that applies to both finance and sustainability. Within complicated and disparate systems, there is always a need to find common language to enable collaboration and remove silos.
WBCSD PACT is a growing infrastructure solution for PCF Data Exchange and Scope 3 emissions transparency, one of the biggest problem faced in the carbon accounting world today. But this is not the first time we as a human society are trying to standardise data exchange.
SWIFT — finacial data exchange network can teach us a lot about the WBCSD PACT initiative and its quest for seamless product carbon footprint (PCF) data exchange.
The Wild West of Money Transfers
Imagine it’s the 1960s. You want to send money from your bank in New York to your friend’s bank in Paris. Sounds simple, right? Not quite! Back then, it was a bit of a nightmare. Banks were sending messages via telegraphs or even fax machines, which were slow, error-prone, and expensive. There was no standard way to communicate between banks, and fees were sky-high. It was like trying to speak different languages without a translator.
In 1973, 239 banks from 15 countries got together to solve a common problem: how to communicate about cross-border payments. The banks formed a cooperative utility, the Society for Worldwide Interbank Financial Telecommunication (SWIFT), headquartered in Belgium. Swift went live with its messaging services in 1977, replacing the Telex technology that was then in widespread use, and rapidly became the reliable, trusted global partner for institutions all around the world. The main components of the original services included a messaging platform, a computer system to validate and route messages, and a set of message standards.
SWIFT: The Game Changer
With SWIFT, suddenly there was a common language for banks to talk to each other. The first message was sent between banks in Belgium and the Netherlands, and it was like watching the dawn of a new era. SWIFT introduced standardized message formats that made transferring money smoother and faster.
Imagine a banker in London sending a message to a counterpart in Tokyo, all with the click of a button! This was revolutionary. By reducing the transaction time from days to just a few hours (or even minutes), SWIFT not only streamlined the process but also built trust among banks globally. Who would have thought that a bunch of bankers could transform international finance with a well-structured messaging system?
Now, let’s pivot to where WBCSD PACT comes in. PACT is all about creating a transparent, standardized approach to carbon footprint data exchange, and there is a lot to learn from SWIFT.
Key learnings from SWIFT for PACT
Standardization is Key: Just as SWIFT created standardized message formats, PACT needs to establish common standards for PCF data. Imagine if every company reported their carbon footprint in a different way — it would be chaos! Standardization will make it easier for businesses to share and understand data, ultimately leading to better environmental practices.
Building Trust: SWIFT’s security measures are a perfect model for PACT. In a world where data privacy is paramount, establishing a secure framework for sharing carbon data is non-negotiable. Companies need to feel confident that their data is safe. After all, who wants to share sensitive information without the assurance that it’s protected?
Efficiency Matters: Think about how much SWIFT reduced transaction times. PACT can aim for real-time data exchange, allowing companies to quickly report their carbon emissions and respond to environmental challenges. Imagine a business getting instant feedback on its carbon footprint — talk about a game-changer!
Keeping It Inclusive: As we explore the lessons from SWIFT for WBCSD PACT, it’s crucial to talk about another key aspect: inclusivity. Just like in any thriving ecosystem, we need to ensure that no single player tries to dominate the network. When SWIFT was first established, it faced challenges from various financial institutions eager to carve out their own paths. However, it was the collaborative spirit that won in the end. Imagine if a few large corporations tried to take control of the carbon data exchange. This could lead to a system where only their standards, protocols, and practices dominate, sidelining smaller companies or startups that might have innovative solutions. This isn’t just bad for competition; it’s detrimental to the environment, too. A diverse range of players brings fresh ideas and perspectives that can drive real change. For instance, in the early days of SWIFT, smaller banks worried about being left out. But the founders understood that inclusivity was essential for the network’s success. They created a platform that welcomed all types of banks, big and small, ensuring that everyone had a voice.
A Call for Open Collaboration
For PACT, this means fostering an open environment where all players — from multinational corporations to local startups — can participate and contribute. By creating an inclusive framework, we need to make sure that a wider variety of data can be shared. This leads to richer insights and more comprehensive solutions for reducing carbon footprints.
Imagine if every company, regardless of size, could share its carbon data easily. The result? A wealth of information that can inform better practices, inspire collaboration, and ultimately drive down emissions.
The Road Ahead
Looking to the future, collaboration should be a priority. Just like the founding members of SWIFT brought together banks from around the world, engaging businesses, governments, and NGOs to create a robust framework for PCF data exchange is crucial. It’s all about working together toward a common goal: a more sustainable planet.
The challenges however remain particular to PCF data availability. Unlike the financial environment during SWIFT network evolution when good-quality data of ‘money’ was available, PCF data today is scarce. But with collaboration, new opportunities can be unlocked to achieve a truly sustainable world.
There is a huge variance between SWIFT and PACT as well, the basic concept of PCF is not as ubiqutous and harmonised as ‘money’ is. But SWIFT comes closest to a success case study for PACT to compare with in my opinion. In the end, both SWIFT and PACT share a vision of connecting organizations in a meaningful way. SWIFT transformed the world of finance, and PACT is on the path to do the same. So, as we move forward, let’s take a page from SWIFT’s playbook. With standardization, trust, and efficiency, we can pave the way for a brighter, greener future. Let’s make PCF data exchange as seamless as sending money across the globe!
Author
I’m Purvish — Co-Founder of Carboledger, US-based software technology company helping businesses grow sustainable solutions portfolio. I love to deep-dive into history, write about technology and ocassionally participate in long-distance running events. Connect with me on LinkedIn to chat more : https://www.linkedin.com/in/decarbwithpurvish/
Explore more
- Learn more about WBCSD PACT : https://www.carbon-transparency.org/about-us
- How Carboledger utilises PACT technology for PCF Data Exchange and business growt: https://www.carboledger.com/
- History of SWIFT : https://www.swift.com/about-us/history
