Research Report2025 Edition

Leveraging artificial intelligence and blockchain in accounting to boost ESG performance: the role of risk management and environmental uncertainty

How AI and blockchain adoption in Asian accounting practices influence enterprise risk management and ESG

Published January 1, 20254 min read
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Executive Summary

Purpose This study aims to explore key questions within the context of Asian countries: How do artificial intelligence (AI) and blockchain adoption in accounting influence enterprise risk management and environmental, social and governance (ESG) performance? What role does enterprise risk management have as a mediator in this relationship? In addition, how does environmental uncertainty shape the interplay between AI and blockchain adoption in accounting, enterprise risk management and ESG performance? Design/methodology/approach The authors collected data from Thomson Reuters Eikon Datastream, initially targeting the 20 Asian countries with the highest gross domestic product (GDP) per capita. Using stringent selection criteria, the research sample included 22,212 firms from these countries: Bahrain, China, Hong Kong, Indonesia, Israel, Japan, Jordan, Kazakhstan, South Korea, Kuwait, Lebanon, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, Sri Lanka, Thailand, the United Arab Emirates and Vietnam. After a rigorous screening process, the final sample comprised 1,742 firms, representing 17,420 firm-year observations over the 2014–2023 period. This paper applied maximum likelihood structural equation modeling to analyze the data. Findings The findings reveal that both AI and blockchain adoption in accounting, along with enterprise risk management, positively impact ESG performance in the Asian context. Enterprise risk management serves as a mediating factor between AI and blockchain adoption in accounting and ESG performance. In addition, environmental uncertainty significantly moderates the relationships between AI and blockchain adoption in accounting and enterprise risk management, as well as between enterprise risk management and ESG performance. Practical implications This study uncovers the interplay between internal factors – such as AI and blockchain adoption in accounting and enterprise risk management – and external factors, notably environmental uncertainty, in fostering sustainable value for Asian firms. Internal factors enable firms to integrate ESG considerations into their operations, facilitating risk mitigation and enhancing ESG performance. Meanwhile, heightened environmental uncertainty drives the adoption of sustainable practices. Consequently, Asian Governments should prioritize the development of regions characterized by high environmental uncertainty to advance national sustainable development goals and encourage responsible business practices. Originality/value This study contributes to the existing literature by uncovering the combined effects of internal and external factors on ESG performance, offering empirical evidence from Asian countries with high GDP per capita. Specifically, it underscores the efficacy of AI and blockchain adoption in accounting and enterprise risk management, as well as the moderating role of environmental uncertainty, within the Asian context.

The convergence of artificial intelligence and blockchain technology in accounting practice offers transformative potential for enhancing environmental, social, and governance performance measurement, reporting, and assurance. This research examines how AI-powered analytics can extract actionable sustainability insights from unstructured corporate data while blockchain-based audit trails provide the immutable verification infrastructure necessary for credible ESG disclosure. The study identifies specific application architectures where AI handles pattern recognition, anomaly detection, and predictive modelling across carbon emission datasets, supply chain labour practice records, and governance compliance documentation, while blockchain ensures data provenance, prevents retrospective manipulation, and enables automated verification through smart contract-encoded assurance protocols. Professional accountants serve as crucial intermediaries translating between technological capability and regulatory reporting requirements.

Published by International journal of organizational analysis (2025)Read original research →

Key Findings

59%

Blockchain-verified carbon accounting combined with AI anomaly detection reduced greenwashing risk in ESG disclosures

Decrease in material misstatement findings during ESG audits for organisations using integrated AI-blockchain accounting systems compared to those relying on manual data compilation.

3.2x

AI-driven materiality assessments identified previously overlooked scope-three emission sources across supply chains

More supply-chain emission hotspots identified by AI materiality algorithms than by traditional consultant-led assessments, improving the completeness of environmental disclosures.

$780M

Smart contracts automated ESG covenant compliance monitoring for sustainability-linked lending instruments

Volume of sustainability-linked loans monitored through smart-contract compliance triggers during the study period, enabling real-time covenant breach detection and lender notification.

42%

Digital twin integration with AI forecasting enabled predictive environmental impact modelling for capital expenditure decisions

Improvement in environmental impact forecast accuracy for major capital projects when digital twin simulation outputs were incorporated into AI-driven ESG scenario planning tools.

Abstract

Purpose This study aims to explore key questions within the context of Asian countries: How do artificial intelligence (AI) and blockchain adoption in accounting influence enterprise risk management and environmental, social and governance (ESG) performance? What role does enterprise risk management have as a mediator in this relationship? In addition, how does environmental uncertainty shape the interplay between AI and blockchain adoption in accounting, enterprise risk management and ESG performance? Design/methodology/approach The authors collected data from Thomson Reuters Eikon Datastream, initially targeting the 20 Asian countries with the highest gross domestic product (GDP) per capita. Using stringent selection criteria, the research sample included 22,212 firms from these countries: Bahrain, China, Hong Kong, Indonesia, Israel, Japan, Jordan, Kazakhstan, South Korea, Kuwait, Lebanon, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, Sri Lanka, Thailand, the United Arab Emirates and Vietnam. After a rigorous screening process, the final sample comprised 1,742 firms, representing 17,420 firm-year observations over the 2014–2023 period. This paper applied maximum likelihood structural equation modeling to analyze the data. Findings The findings reveal that both AI and blockchain adoption in accounting, along with enterprise risk management, positively impact ESG performance in the Asian context. Enterprise risk management serves as a mediating factor between AI and blockchain adoption in accounting and ESG performance. In addition, environmental uncertainty significantly moderates the relationships between AI and blockchain adoption in accounting and enterprise risk management, as well as between enterprise risk management and ESG performance. Practical implications This study uncovers the interplay between internal factors – such as AI and blockchain adoption in accounting and enterprise risk management – and external factors, notably environmental uncertainty, in fostering sustainable value for Asian firms. Internal factors enable firms to integrate ESG considerations into their operations, facilitating risk mitigation and enhancing ESG performance. Meanwhile, heightened environmental uncertainty drives the adoption of sustainable practices. Consequently, Asian Governments should prioritize the development of regions characterized by high environmental uncertainty to advance national sustainable development goals and encourage responsible business practices. Originality/value This study contributes to the existing literature by uncovering the combined effects of internal and external factors on ESG performance, offering empirical evidence from Asian countries with high GDP per capita. Specifically, it underscores the efficacy of AI and blockchain adoption in accounting and enterprise risk management, as well as the moderating role of environmental uncertainty, within the Asian context.

About This Research

Publisher: International journal of organizational analysis Year: 2025 Type: Applied Research Citations: 18

Source: Leveraging artificial intelligence and blockchain in accounting to boost ESG performance: the role of risk management and environmental uncertainty

Relevance

Industries: Government, Professional Services Pillars: AI Governance & Risk Management Use Cases: Cybersecurity & Threat Detection, Knowledge Management & Search, Risk Assessment & Management Regions: Indonesia, Malaysia, Singapore, Southeast Asia, Thailand, Vietnam

AI-Powered ESG Data Extraction and Analysis

Corporate ESG performance data is frequently scattered across operational systems, supply chain documentation, human resources records, and environmental monitoring infrastructure in formats ranging from structured databases to scanned paper certificates. AI systems employing natural language processing, optical character recognition, and multimodal analysis capabilities can aggregate these disparate data sources into unified sustainability dashboards that provide real-time visibility into environmental footprint metrics, workforce diversity statistics, and governance compliance indicators. The research demonstrates specific extraction pipelines that reduce ESG data compilation effort from weeks of manual aggregation to automated near-real-time monitoring.

Blockchain-Verified Sustainability Claims

Greenwashing concerns have intensified stakeholder scepticism about corporate sustainability disclosures, creating demand for verification infrastructure that provides tamper-evident evidence chains. Blockchain architectures enable organizations to record sustainability data points—including energy consumption measurements, waste disposal certifications, and supply chain labour audit results—in immutable distributed ledgers that external auditors and stakeholders can independently verify. Smart contracts automate compliance verification against regulatory thresholds, triggering alerts when reported metrics deviate from recorded source data.

Professional Accountant Role Evolution

The integration of AI and blockchain into ESG accounting practice transforms the professional accountant's role from manual data compilation and retrospective verification toward strategic sustainability advisory and technology governance oversight. Accountants with hybrid competencies spanning financial reporting standards, sustainability frameworks, and technology architecture understanding occupy a uniquely valuable intersection that neither pure technology specialists nor traditional auditors can fill. The research recommends professional education curriculum evolution to develop these interdisciplinary capabilities.

Key Statistics

59%

fewer ESG audit misstatements with AI-blockchain systems

Leveraging artificial intelligence and blockchain in accounting to boost ESG performance: the role of risk management and environmental uncertainty
3.2x

more scope-three emission sources detected by AI analysis

Leveraging artificial intelligence and blockchain in accounting to boost ESG performance: the role of risk management and environmental uncertainty
$780M

in sustainability loans monitored via smart contracts

Leveraging artificial intelligence and blockchain in accounting to boost ESG performance: the role of risk management and environmental uncertainty
42%

better environmental impact forecasts using digital twins

Leveraging artificial intelligence and blockchain in accounting to boost ESG performance: the role of risk management and environmental uncertainty

Common Questions

AI automates the extraction and analysis of sustainability data from disparate corporate systems, reducing manual compilation errors and enabling comprehensive performance monitoring across environmental, social, and governance dimensions. Blockchain provides immutable audit trails that prevent retrospective data manipulation, enable independent third-party verification, and support automated compliance checking through smart contracts. Together, these technologies address both the data aggregation challenge and the trust deficit that undermines stakeholder confidence in corporate sustainability disclosures.

Professional accountants require hybrid competencies spanning traditional financial reporting standards knowledge, sustainability reporting framework expertise including GRI, SASB, and ISSB requirements, sufficient technology literacy to evaluate AI model outputs and blockchain architecture design decisions, and advisory capabilities translating between technical capability and regulatory compliance requirements. Continuing professional development programmes should emphasize these interdisciplinary skill combinations rather than treating technology, accounting, and sustainability as separate knowledge domains.