Corporate Sustainability Reporting and Blockchain

Abstract

The recently enacted Corporate Sustainability Reporting Directive is a cornerstone of the European Union’s policy to achieve a sustainable economy, environment, and society. Under this Directive, companies are required to disclose a substantial amount of information on the impact of climate change and global warming, including sustainability matters relating to the company’s activity and information on the impact of the company activity on the environment and people. Nevertheless, the practical implementation of these sustainability-related disclosure obligations will encounter significant obstacles, most notably the wide scope of reporting. In particular, the reporting company bears the burden of disclosing material information on impacts, risks and opportunities connected to not only its own operations but also the operations of its direct and indirect business relationships in the upstream and downstream value chain. Such disclosure is expected to involve information produced by different, often distant sources, making information gathering efforts very difficult and endangering the quality of the information disclosed. In this reporting process, the company is even expected to engage with its stakeholders across its value chain. This article offers insights into these challenges and sheds light on the role that Blockchain technology may play in improving data quality and management in businesses that operate global, multilayer supply chains.

Keywords: corporate sustainability reporting; materiality; information disclosure; supply chain management; Blockchain