Environmental, Social, and Governance (ESG) investing is accelerating. The importance of ESG metrics and the demand for reliable data for measuring them has also increased concomitantly. With no industry-wide set of standards, verified and standardized ESG data is challenging to come by. Distributed ledger technology, in general, and blockchain technology, in particular, has the potential to provide a safe and transparent tool to overcome this obstacle.
Access to accurate, standardized information is crucial to corporate and sustainability reporting. Blockchain-enabled reporting tools allow companies to collect verifiable data and generate trustworthy reports. It also provides the platform to support data transparency and enable data standardization.
Furthermore, the blockchain platform provides a digital system and database to record the transactions along the ESG supply chain. This decentralized transactions database brings transparency, reliability, traceability, and efficiency to supply chain management.
Therefore, two key areas where blockchain can help comply with ESG standards are reporting of data and supply chain transparency. The technology offers an opportunity to allow ESG reporting and ESG supply chain tracking to become more transparent, standardized, and trustworthy.
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