Blockchain-based approach to improve environmental, social, and governance (ESG) reporting in construction organizations

Abstract

Existing ESG reporting tools in construction organizations often lack transparency and accountability, presenting significant challenges in effectively managing and reporting ESG data. This research addresses the gap in current reporting practices by proposing and validating a hybrid blockchain solution aimed at enhancing ESG reporting in the Architecture, Engineering, and Construction (AEC) industry. The primary objective is to develop a blockchain-based solution that automates ESG reporting, addressing issues such as data fragmentation, lack of verification, and inefficiencies. Adopting a design science approach, the study develops a conceptual framework that combines Ethereum and Hyperledger Fabric to create a hybrid blockchain model for the prototype. The comprehensive literature review highlights key challenges in ESG practices and emphasizes the potential of blockchain technology to overcome these barriers. The findings show that the hybrid blockchain model successfully automates the ESG reporting process, ensuring transparency, immutability, and accountability. The prototype, validated through a case study involving two construction organizations, demonstrates the feasibility of combining Ethereum and Hyperledger Fabric to manage ESG data, reducing errors, preventing manipulation, and enabling real-time reporting. This research enriches the theoretical understanding of blockchain applications in ESG practices. It provides practical implications by offering a tangible, blockchain-based solution that ensures transparent, reliable, and accountable ESG reporting in the construction industry, ultimately contributing to more sustainable practices.