Assessing the Effectiveness of Blockchain-Based ESG Reporting on Corporate Transparency

Abstract

Environmental, Social, and Governance (ESG) reporting has become a critical tool for enhancing corporate accountability, investor confidence, and sustainable business practices. Traditional ESG reporting suffers from limitations such as lack of verifiability, selective disclosure, and low trust among stakeholders. Blockchain technology offers the potential to address these challenges by providing a secure, immutable, and transparent system for recording ESG-related data. This research investigates the effectiveness of blockchain-based ESG reporting in improving corporate transparency. A quantitative survey design collected data from 360 corporate managers, sustainability officers, and investors across multiple industries actively implementing or evaluating blockchain-enabled ESG reporting systems. Structural Equation Modeling using SmartPLS was applied to examine relationships among blockchain adoption, data reliability, stakeholder trust, reporting accuracy, and perceived transparency. Results indicate that blockchain adoption significantly enhances data reliability, which in turn positively influences stakeholder trust and perception of corporate transparency. Reporting accuracy mediates the relationship between blockchain adoption and transparency, suggesting that the technological infrastructure improves not only accessibility but also the quality of disclosed ESG data. The study contributes to ESG literature by providing empirical evidence on the value of blockchain in addressing reporting inefficiencies and enhancing accountability. Findings highlight that firms integrating blockchain into ESG processes are perceived as more transparent, trustworthy, and accountable by investors and other stakeholders. Practically, the research informs managers, regulators, and policymakers on the benefits and limitations of blockchain-based reporting frameworks, while identifying critical success factors such as standardization, interoperability, and governance protocols. Limitations include reliance on self-reported measures and cross-sectional data. Future studies should incorporate longitudinal analysis and behavioral data from actual blockchain transactions