The general average is one of the most significant rules of ancient maritime law; We believe that this 2,500-year-old principle can be one of the most impactful answers for today’s environmental problems.
General average
The law of the general average is a legal principle where all parties in the sea proportionally share losses and risks that result from voluntarily sacrificing a part of the ship or cargo to save the whole in an emergency. The mandate of the general average is that if a party has chosen to suffer consequential losses to avoid further damage to others’ property, these parties contribute to help compensate and therefore mutualize the risks involved.
An application to environmental preservation problem
What if we applied the general average principle to incentivize the preservation of natural capital?
With this principle, we can involve all relevant parties in the protection of our environment. Meaning, these parties can set up a risk mutualization for the area in which they operate, similar to the general average principle. When a party has to stop or eliminate certain ‘profit-making activities for the benefit of the environment, the losses concurred then compensated by the other parties. This process is managed with a standard valuation and risk management approach, in line with the Sustainable development goals as established by the UN.
Incentives for preservation
Implementing the general average for preservation encourages collective awareness by following up on shared risks and shared benefits. Moving forward with a transparent process where all stakeholders follow up the common goals of conservation by providing insurance for the losses made for the common good can change the way we trust and operate together in business.
“ Doing good becomes good business for everybody.”
The SmartB network enables this common good approach by transparently collecting evidence of behavior and increasing encouragement and accountability for good behavior. We do this through our principle of one proof = one funding.
SmartB is a crucial enabler in the implementation of the general average process for environmental preservation. We can manage evidence (data), connect value-chains, and are compliant with the general data protection regulation (GDPR).
Furthermore, we can increase the rigor associated with funding the risks, avoiding issues related to fraud or double-spending, and create consistency in project follow-up through traceability.
So what do you say to SmartB against environmental piracy?
Source: Le Monde Wikipedia
