A blockchain-based token economic model for incentivizing ESG in the construction industry

Abstract: The existing Environmental, Social, and Governance (ESG) frameworks lack transparency and consistency in reporting and can introduce extra costs to the industry. This study proposes a blockchain-based token economic model to incentive construction companies for their ESG performance and addresses the issues of transparency. The model is expected to: (i) offer a novel transparent way for regulators to recognize the industry’s ESG performance, (ii) incentivize companies with authentic and attractive rewards to improve their ESG performance, and (iii) collectively promote sustainable construction practices for ESG goals. A thought experiment is presented for the case of Hong Kong’s construction industry.