nD Blockchain for ESG Reporting

Principal Investigator: Professor George G.Q. HUANG (Chair Professor from Department of Industrial and Manufacturing Systems Engineering)

This project is showcased in the second exhibition – Digitization in Innovation Wing Two

About the scholar

Professor George G.Q. HUANG

Research interests:  Physical Internet (Internet of Things) for Manufacturing and Logistics
Email: gqhuang@hku.hk
Website: https://www.imse.hku.hk/people/huang-g-q

Project information
The introduction of the Environmental, Social and Governance (ESG) Reporting Guide (Guide) by HKEX in 2013, and the subsequent upgrade of the Guide’s reporting obligation to “comply or explain” in 2016, have significantly moved the dial for Hong Kong issuers’ ESG reporting. However, ESG reporting faces many bottlenecks, including data authenticity, consistency, and transparency. Professor Huang’s team developed an IoT- and blockchain-based platform to upgrade the ESG reporting industry.

There are five project deliverables and three of them are the key innovations:

  1. Fact-telling Blockchain Gateway (well-developed and encapsulated software and hardware hub): upload ESG data into the blockchain and enable the authenticity evaluation of the data.
  2. Versioning Smart Contract : make ESG report generation smart and highly efficient through flexible parameter set-up, multi-party negotiation and agreement, and other services linked to the consortium.
  3. Blockchain-based Incentive Mechanism : motivate listed companies to provide high-quality ESG data by rewarding tokens, thereby offering a transparent ecosystem to stakeholders.
 

nD Blockchain-enabled ESG Platform (BESG) is used to store, compute, and share the ESG data, ESG report, and ESG index. Service explorers developed for multiple ESG stakeholders:

  • Listed Companies collect and provide ESG data, and publish ESG reports.
  • ESG Consultants provide professional ESG compilation services.
  • Regulators (e.g., HKEX) issue the ESG guides and supervise the whole ESG performance.
  • Rating Agencies assess the ESG performances of listed companies.
  • Investors conduct ESG review, communication, and investing.

The environmental data is automatically collected by IoT devices, while social and governance data are imported from the Listed Companies’ Enterprise Information Systems (EIS). The ESG data is then stored immutably on the nD Blockchain. Besides the management, monitoring, and data transmission submodules,
nD Blockchain also implies versioning mechanisms to achieve flexible control of the smart contract. On the top of the platform are the smart services provided to assist ESG activities, such as ESG project management service, ESG compilation service, ESG evaluation service, and ESG communication service.

Project videos
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