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Research on Blockchain Technology to Solve the Problem of Green Finance 'Greenwashing': Focusing on the Transparency of ESG Financial Supervision

Author(s)

Zitao Wei

Affiliation(s)

School of Finance, Inner Mongolia University of Finance and Economics, Hohhot, China

Abstract

This paper focuses on the transparency of ESG financial regulation and explores the application path of blockchain technology in solving the "greenwashing" problem of green finance. Blockchain tackles the challenge of greenwashing in green finance through several approaches. First, it enables real-time recording of a project's environmental data on the blockchain, which is then verified by multiple nodes to prevent unilateral alterations. Second, by setting predefined ESG performance thresholds, fund disbursements are automated only when these criteria are met, effectively discouraging misleading pledges. Third, the blockchain ensures full traceability of data throughout the project lifecycle, from initiation to operation, with the added support of IoT devices to guarantee data integrity. Lastly, the involvement of entities such as regulators and independent auditors in maintaining the distributed ledger helps bridge information gaps, making any attempt at greenwashing easily detectable and unfeasible. By integrating domestic and foreign academic literature and policy reports, this paper analyzes the causes of the "greenwashing" phenomenon and the limitations of traditional governance, the characteristics and advantages of blockchain technology, reveals the core advantages of blockchain technology applied to green finance and its important role in realizing data trust sharing, capital flow monitoring and dynamic supervision, and explores and puts forward countermeasures and suggestions for the challenges faced by technology application. In order to improve the efficiency of green finance regulation and promote the sustainable development of the industry, this paper provides theoretical and practical reference. This study seeks to offer robust theoretical foundations and practical guidance to improve the efficiency of green finance regulation and support the sustainable growth of the sector.

Keywords

Green Finance; Greenwashing; ESG; Financial Regulation; Transparency

References

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