MAKASSAR, Indonesia — Blockchain technology is gaining attention as a tool to improve transparency in Environmental, Social, and Governance (ESG) reporting, but the literature still gives uneven attention to the three ESG dimensions. Itsna Muflikhah of State University of Makassar examined recent academic literature on blockchain-based ESG reporting and found that environmental and governance issues dominate the discussion, while the social dimension remains comparatively underrepresented. The article was published in 2026 in the International Journal of Finance and Business Management (IJFBM) and highlights how blockchain adoption could be developed more effectively in developing countries.
The findings are relevant as companies face growing expectations to provide reliable information about sustainability, corporate governance, environmental impacts, and social responsibilities. ESG reporting is increasingly connected with investment decisions, corporate accountability, and regulatory requirements. At the same time, companies and stakeholders continue to face challenges in verifying whether reported sustainability information is complete, consistent, and supported by reliable data.
Why Blockchain Is Being Considered for ESG Reporting
Blockchain is a digital record-keeping technology that stores information in connected blocks. Its design makes previously recorded information difficult to alter without leaving evidence of the change.
For ESG reporting, this characteristic could provide a stronger record of where information comes from, when it was entered, and how it moves through a reporting system. Blockchain can also support audit trails and automated processes through smart contracts.
However, blockchain does not automatically guarantee that the information entered into the system is accurate. The technology can protect the integrity of recorded information, but the original data still needs to be reliable.
This issue is particularly important when ESG information comes from the real world. The process of connecting real-world information to blockchain is commonly associated with the “oracle problem.” If the information entering the blockchain is inaccurate, the technology cannot independently correct it.
From 74 Articles to 11 Key Studies
Itsna Muflikhah used a Systematic Literature Review (SLR) based on the PRISMA 2020 framework to examine research on blockchain and ESG reporting.
The literature was collected from the Scopus database. The initial search produced 74 articles. Researchers then screened the publications based on factors such as publication type, language, relevance to blockchain and ESG reporting, transparency, accountability, verification, and access to the full article.
After the screening process, 11 articles remained for detailed analysis. The selected articles were published between 2024 and 2026, indicating that blockchain-based ESG reporting remains a relatively new and rapidly developing research area.
The analysis also used a structured coding process to identify which ESG dimensions were addressed, what types of blockchain were proposed, which transparency mechanisms were discussed, and how relevant the proposed solutions were for developing countries. A reliability test between two independent coders produced a Cohen’s Kappa value of 0.82, indicating strong agreement in the coding process.
Environmental Issues Dominate Blockchain ESG Research
One of the clearest findings is the unequal distribution of research attention across the ESG framework.
Among the 11 articles analyzed:
- Environmental (E) appeared in 10 articles, or 90.9%.
- Governance (G) appeared in 9 articles, or 81.8%.
- Social (S) appeared in only 5 articles, or 45.5%.
- No article focused exclusively on the Social dimension.
The article's visual analysis on page 10 reinforces this pattern. Environmental issues reached 90.9% coverage, Governance 81.8%, and Social 45.5%. The largest individual research combination was Environmental plus Governance, representing 45.5% of the reviewed articles.
Itsna Muflikhah explains that environmental information is often easier to quantify. Carbon emissions, energy consumption, water use, and waste volumes can be represented numerically and, in some cases, collected automatically through digital sensors.
Social issues are more complex. Working conditions, labor rights, human rights, and community impacts can involve qualitative information and require human judgment. This makes them more difficult to measure and automate using current blockchain mechanisms.
Permissioned Blockchain and Smart Contracts Lead the Discussion
The review also identified the blockchain configurations most frequently proposed for ESG reporting.
Permissioned blockchain, particularly Hyperledger Fabric, appeared in 5 of the 11 articles, or 45.5%. Public Ethereum-based blockchain appeared in three articles, while consortium and hybrid blockchain approaches appeared less frequently.
Among transparency mechanisms, smart contracts were the most frequently discussed, appearing in 7 articles, or 63.6%. Blockchain combined with Internet of Things (IoT) technology appeared in three articles, particularly for collecting environmental information in real time.
The prominence of permissioned blockchain reflects the importance of access control and data privacy in corporate environments.
Developing Countries Need Context-Specific Solutions
Another important part of the review concerns the applicability of blockchain solutions in developing countries.
Four of the 11 reviewed articles, or 36.4%, explicitly focused on developing countries, including Indonesia, Malaysia, and ASEAN contexts. However, only 3 articles, or 27.3%, considered at least three of four important factors: digital infrastructure, ESG regulatory readiness, human resource capacity, and implementation costs.
This suggests that technological solutions cannot be separated from the conditions in which they will operate.
Itsna Muflikhah recommends a gradual approach for developing countries. Companies can begin by strengthening basic ESG data digitization before moving toward more complex blockchain-based verification systems. Permissioned blockchain may also provide a practical option where organizations require greater control over access and data. Cooperation among regulators, industry groups, and technology providers could help distribute infrastructure and implementation costs.
Implications for Companies, Auditors, and Regulators
For companies, the findings point to the importance of building reliable ESG data systems before investing heavily in blockchain infrastructure.
For auditors, the emergence of blockchain-based reporting creates demand for new capabilities, including understanding blockchain architecture, smart contracts, oracle systems, and the difference between data immutability and data accuracy.
For regulators, the article recommends a phased policy approach. Digitalizing ESG information and establishing common data formats can come before broader blockchain verification requirements. Industry-based blockchain partnerships could then be developed as the ecosystem becomes more prepared.
The broader message from Itsna Muflikhah of State University of Makassar is that blockchain should not be treated as a stand-alone solution for ESG transparency. Its effectiveness depends on reliable information, appropriate regulation, digital infrastructure, skilled personnel, manageable costs, and balanced attention to Environmental, Social, and Governance issues.
The review also points to future opportunities for research, particularly blockchain applications for Social and Governance reporting, case studies in Southeast Asia including Indonesia, and the development of better mechanisms for connecting qualitative ESG information to blockchain systems.
Author Profile
Itsna Muflikhah is affiliated with the Accounting Study Program, Faculty of Economics and Business, State University of Makassar. Her article focuses on blockchain technology, ESG reporting, transparency, accounting, sustainability, and the relevance of emerging technologies in developing-country contexts.
Research Source
Article Title: Blockchain Implementation in Enhancing ESG Reporting Transparency: A Systematic Literature Review Focusing on E-S-G Dimensional Imbalance and Developing Country Contexts
Author: Itsna Muflikhah
Journal: International Journal of Finance and Business Management (IJFBM)
Publication: 2026, Vol. 3, No. 3, pp. 289–304
DOI: 10.59890/ijfbm.v4i3.5
Official Journal: International Journal of Finance and Business Management
0 Komentar