SMART CONTRACTS IN COMPANIES’ SUSTAINABILITY JOURNEY: FINANCIAL OPPORTUNITIES AND RISKS TO BE MANAGED

This chapter offers a comprehensive analysis of how blockchain-based smart contracts can reshape corporate sustainability. It first shows that automation and tamper-evident audit trails reduce costs while enabling nearreal-time verification of ESG metrics—especially supply-chain provenance 
and emissions—thus mitigating greenwashing and strengthening stakeholder trust. Next, it examines sustainable-finance use cases where smart contracts channel capital toward verifiable environmental outcomes: streamlining the issuance and lifecycle monitoring of green bonds, tokenizing carbon credits to prevent double counting, and automating delivery-versus-payment and MRV processes. On the energy side, guarantees of origin, peer-to-peer trading, and demand-response programs illustrate contributions to SDG 7 and SDG 13. The chapter also maps key vulnerabilities: technical/security flaws 
and scalability limits; frictions between immutability and legal/regulatory requirements; and assurance/privacy concerns stemming from oracle-fed data. Recommended safeguards include formal verification and multi-party audits, HSM-based key management and multisig controls, killswitch/upgrade governance, selecting PoS or permissioned networks, and multi-oracle designs with end-to-end auditability. With such a governance and-risk framework in place, smart contracts can convert sustainability commitments into enforceable, transparent business rules and provide a 
reliable backbone for corporate ESG execution.