Exploring the Potential Contribution of Blockchain Technology to Sustainability Reporting

This chapter aims to create a space where contemporary arguments on sustainability, corporations’ social responsibility, and blockchain technology can be all discussed together. It offers a new corporate communication tool with a blockchain solution. Corporations are under social pressure for the environmental and social damages they cause. However, their sustainability initiatives and reports are criticized due to the vagueness of their content. This criticism led organizations to practice under the name “Corporate Social Responsibility” (CSR) and standardize performance transparency. But CSR reports may not also provide accurate results because traditional reporting techniques do not allow clear communication for various reasons: lack of standardization, neutrality, and trustworthiness. Considering executives can distort corporate information to include merely positive ones and CSR reporting is only voluntary, it is natural to raise doubts about the reports. After all, CSR activities attempt to achieve more ethically sound practices. Within this framework, taking advantage of developing technology is vital. Blockchain technology promises to meet sustainability requirements and ensure report reliability. The outcomes of pilots show using blockchain technology in the sustainability area offers potential. Its key features—decentralized trust, traceability, and immutability—make blockchain a feasible option for CSR reporting too. In this chapter, we identify the problems of CSR reports and show the suitability of using blockchain in the reporting area. We followed the article called “A Ten-Step Decision Path to Determine When to Use Blockchain Technologies” and answered their questions about using blockchain technology for sustainability reporting. This question set helps to identify needs, participants’ interactions, behaviors, and community rules. Our analysis shows that using blockchain for CSR reporting is a viable option. Blockchain-based sustainability reporting mechanisms may force companies to be more transparent in their initiatives. Such a corporate communication tool prevents distortion of public information and increases company visibility.