2023 European Conference on Computing in Construction
40th International CIB W78 Conference
Heraklion, Crete, Greece
July 10-12, 2023

A BLOCKCHAIN-BASED TOKEN INCENTIVE MECHANISM FOR ESG IN THE
CONSTRUCTION INDUSTRY

Rui Zhao1, Jiajia Wang1, and Fan Xue1
1
Department of Real Estate and Construction, The University of Hong Kong, Pokfulam, Hong Kong, China
This is the post-print version of the conference paper:
Zhao, R., Wang, J. & Xue, F. (2023). A blockchain-based token economic model for incentivizing ESG in the
construction industry. Proceedings of the 2023 European Conference on Computing in Construction and the
40th
International
CIB
W78
Conference,
235,
Heraklion,
Crete,
Greece.
Doi:
http://doi.org/10.35490/EC3.2023.235
The use of this document must follow the CC-BY NC 4.0 license.

Abstract
This paper proposes a blockchain-based token incentive
mechanism that aims to reward stakeholders in
construction industries for their environmental, social,
and governance (ESG) performance. The mechanism
aims to address the transparency and consistency in
existing ESG frameworks , while encouraging the
adoption of sustainable practices. By providing an
objective and transparent method for recognizing and
rewarding stakeholders' ESG performance, this
mechanism incentivizes them to enhance their ESG
efforts through appealing rewards. Furthermore, it
promotes sustainable building practices by encouraging
the use of renewable energy sources, recycling of
construction waste, and the application of energy-efficient
building materials.
Keywords: Blockchain, ESG, Incentive mechanism,
Construction industry

Introduction
The third decade of the 21st century is crucial for our
planet, as we confront unprecedented challenges,
including climate change, natural resource depletion, and
significant social inequality (Gillan et al., 2021). In
response to these challenges, an increasing number of
companies,
regulatory
bodies,
investors,
and
environmental advocacy organizations are turning to a
new form of corporate disclosure known as
Environmental, Social, and Governance (ESG). ESG
analysis aims to evaluate and enhance companies' and
organizations' sustainability and societal impact,
including identifying and addressing environmental and
social risks, measuring performance and progress in these
areas, and promoting overall corporate responsibility
(Van Duuren et al., 2016).
ESG has become an increasingly mainstream
consideration for companies, investors, and other
stakeholders. Governments and regulatory bodies have
begun introducing regulations and guidelines requiring
companies to disclose their ESG performance and risks
(Li et al., 2021). Moreover, ESG can assist investors and
other stakeholders in assessing an organization's long-

term sustainability and its impact on society, enabling
them to make more informed investment decisions and
ultimately creating a more sustainable and responsible
economy (Giese et al., 2019).
However, current ESG frameworks suffer from a lack of
transparency and consistency in reporting (Singhania and
Saini, 2021). Companies may employ different metrics or
disclose information in varying ways, making it
challenging for investors and other stakeholders to
compare and evaluate performance (Giese and Lee,
2019). Moreover, the accuracy and reliability of the
provided information are often questioned. Blockchain
technology has the potential to address this issue of trust
by providing a secure and transparent means of recording
and tracking ESG data (Liu et al., 2021). The immutable
nature of blockchain technology ensures that ESG data
cannot be altered or tampered with, thus increasing
transparency and trust in the data.
Furthermore, blockchain-based platforms can be used to
develop standardized metrics and reporting guidelines,
which can help ensure consistency across stakeholders
(Sulkowski, 2021). Additionally, the application of smart
contracts on a blockchain platform can also be utilized to
automate the calculation of ESG metrics, further
increasing the accuracy and reliability of the data
(Rabbani et al., 2021).
Incentivizing
stakeholders
to
prioritize
ESG
considerations is a growing area of interest, and
blockchain-based token incentive models are increasingly
being explored to achieve this goal (Jiang et al., 2022).
Blockchain technology can be leveraged to create tokens
representing a company's ESG performance. By linking a
company's ESG performance to the value of its tokens,
stakeholders are motivated to prioritize ESG
considerations to increase the value of their tokens and
attract more investors (Park and Li, 2021). Additionally,
token holders can be incentivized to hold the tokens
through distributing rewards, such as dividends, providing
access to exclusive products and services, or even
granting voting rights on important company decisions.
This approach aligns the interests of stakeholders and
investors with those of society and the environment
(Mugurusi and Ahishakiye, 2022).

The construction industry has recently recognized the
significance of ESG factors in operations. Nevertheless,
the adoption of ESG token incentive mechanisms to
enhance performance and attract investors has been
limited (Hadro et al., 2021). The limitation can be
attributed to various factors including, but not limited to,
a lack of understanding of the concept and potential
benefits of ESG tokens, an absence of clear guidelines and
regulations for their implementation, and the cost and
effort required for integrating ESG tokens into existing
systems and processes, which may be perceived as too
high, particularly for small and medium-sized enterprises.
Furthermore, the competitive nature of the industry and
the lack of demand for ESG-compliant construction
projects from consumers and investors may not make it
economically viable for stakeholders to invest in
developing ESG tokens (Daszyńska-Żygadło et al., 2022).
In this study, we aim to design a blockchain-based token
incentive mechanism for ESG in the construction
industry. We will establish a set of performance indicators
for ESG and use them to design a smart contract system.
Through this system, the token issuance and incentive
mechanism will be developed. This approach is expected
to increase standardization, consistency, and transparency
in ESG reporting and metrics and to enhance the
understanding and awareness of the potential benefits of
ESG token incentive mechanisms in the construction
industry.

Related work
ESG
As global attention to sustainable development
intensifies, the ESG concept has gained increasing
prominence in business and investment. The development
and promotion of ESG have been supported by a
multitude of stakeholders, including investors, regulatory
bodies, and environmental organizations. ESG analysis
aims to consider economic, social, and environmental
objectives when assessing corporate performance, thereby
contributing to sustainable development. As depicted in
Figure 1, the ESG framework encompasses three key
areas: environmental factors, such as a company's impact
on climate change and natural resources; social factors,
including issues related to human rights, labor practices,
and community relations; and governance factors, which
pertain to a company's management structure,
transparency, and accountability (Friede et al., 2015).

Figure 1: Data structure of a blockchain

In recent years, the financial and investment sectors have
shown a growing interest in using ESG analysis to
evaluate stakeholders' and organizations' sustainability
and societal impact. This is due to the increasing
recognition that ESG analysis ensures that businesses and
organizations focus not only on short-term financial gains
but also consider the long-term impacts on the
environment, society, and governance (Giese et al., 2019).
Specifically, environmental aspects encompass carbon
emissions, ecosystem protection, and pollutant emissions;
social aspects involve fairness, diversity, and inclusivity
in employee treatment; and governance aspects include
the independence of corporate governance, shareholder
rights protection, and ethical conduct.
A study conducted by Morgan Stanley Capital
International, an investment research firm, found that
stakeholders with strong ESG practices had higher returns
on equity and lower volatility than those with weaker ESG
practices (Giese et al., 2019). Similarly, Hales (2021)
discovered that companies with robust ESG practices had
lower capital costs, indicating that investors perceive
these companies as less risky. Moreover, several studies
have explored the relationship between ESG performance
and financial performance in the construction industry.
Bauer et al. (2011) found that, in the construction and real
estate sectors, companies with strong ESG practices had
higher returns on assets and equity than those with weaker
ESG practices. The study by Mardini (2022) discovered a
positive relationship between ESG performance and
corporate financial performance, suggesting that
companies with strong ESG practices tend to have better
financial performance and are more valuable than those
with weaker ESG practices.
In the construction sector, ESG evaluation indicators can
reflect a building's environmental impact, social impact,
and governance structure. Specifically, environmental
aspects include energy efficiency, water efficiency, and
waste management in buildings; social aspects involve
personnel safety, health and welfare, and supply chain
management in buildings; and corporate governance
aspects encompass board structure, compensation
systems, and anti-corruption measures, among others. For
instance, some construction projects have significantly
reduced carbon emissions by adopting green building
technologies and low-carbon materials while improving
their social performance by optimizing supply chain
management and ensuring employee welfare.
ESG evaluation indicators can help the construction
industry measure sustainability goals and provide
investors with more information to make informed
investment decisions (Daszyńska-Żygadło et al., 2022).
However, challenges remain in implementing ESG
principles in the construction industry, such as developing
appropriate ESG standards, regulatory policies, and
technological innovations. Future research could explore
ways to overcome these challenges to advance further the
adoption of ESG concepts in the construction industry.

In conclusion, the concept of ESG holds significant
importance in the construction industry, contributing to
achieving sustainability goals. By incorporating ESG
principles into building projects' design, construction, and
operation stages, the construction industry can enhance its
ESG performance, ultimately leading to higher financial
returns and social impact.
Blockchain technology in construction
Blockchain technology has emerged as a significant
innovation in the construction industry, offering improved
transparency, enhanced security, and reduced potential for
fraud (Zhao et al., 2022). Since 2017, numerous
researchers and consulting firms have identified various
use case scenarios for implementing blockchain
technology in construction. Hewavitharana et al. (2019)
explored how blockchain could address project
management challenges in the construction industry, in
line with guidelines from the Project Management Body
of Knowledge. By utilizing smart construction objects
(SCOs) and creating a SCOs-enabled blockchain oracles
framework, Lu et al. (2021) provide a novel approach that
forms the architecture of a blockchain-enabled
construction supply chain management. Based on semistructured interviews and publicly available information
from blockchain and construction supply chain
management experts, Qian and Papadonikolaki (2021)
investigated the impact of blockchain technology on trust
in construction supply chain management using semistructured interviews and publicly available information
from industry experts.
Automation further enhances document processing
performance, and blockchain-based smart contracts can
effectively replace traditional paper-based contracts,
ensuring trust between parties. This technology also
provides a highly efficient framework for international
collaboration. Notably, blockchain's traceability and
immutability features ensure data privacy between parties
possessing the key (Ding and Hu, 2022). Given the
inherent complexity and distributed nature of construction
project management, Zhao et al. (2023) proposed
ChainPM as a Blockchain 3.0 paradigm. A pilot study of
a modular construction project demonstrated that
ChainPM reduced information synchronization delays by
99.2% to 99.8% and maintained effective query and
analysis functions even without a network connection.
Token Economics
The token economy is a concept that emerged alongside
the advent of blockchain technology, which facilitated the
creation and trading of digital tokens on decentralized
platforms. The origins of the token economy can be traced
back to the launch of Bitcoin in 2009, which was the first
decentralized digital currency to utilize blockchain
technology (Grinberg, 2012). Since then, numerous
digital tokens, including utility and security tokens, have
been developed. In recent years, the token economy has
been a subject of considerable discussion and research, as
experts predict that it will play a significant role in

shaping the future of finance and the economy (Wu et al.,
2022). Many believe that tokenization will give rise to
new financial instruments and markets, potentially having
a significant impact on traditional financial institutions
and intermediaries.
Token economics explores the creation, distribution, and
utilization of tokens in decentralized systems. It
emphasizes the importance of aligning incentives between
token holders and system users, fostering economic
growth and decentralization, generating new forms of
value, and synchronizing incentives between users and
platform operators (Barreiro-Gomez and Tembine, 2019).
The Hercules Supply Chain Blockchain Protocol
Whitepaper presents the Hercules Protocol and Platform,
explaining token economics, introducing the team, and
providing a case study involving AnthemGold (Team,
2018). Tan (2019) investigates the principles of token
economics within token ecosystems, with the aim of
designing robust incentives for participants, producing
stable outcomes, minimizing inefficient allocation, and
enhancing transaction efficiency within the ecosystem. To
boost profits and transparency for stakeholders,
ElMessiry et al. (2019) developed a dual token model that
accounts for both the financial aspects and the nonfungible characteristics of complex, real-world
businesses.
In the construction sector, companies can also leverage
token economics to incentivize and reward employees.
For instance, employee tokens can be issued based on
performance, safety records, and contributions, thereby
increasing motivation and productivity (Gutierrez et al.,
2020). Moreover, blockchain technology and token
economics can streamline cross-border payments and
collaborations within the construction industry.
Cryptocurrencies can lower the cost and duration of crossborder remittances, facilitating international cooperation
and communication (Liao and Shao, 2021). In summary,
token economics can be employed to develop
decentralized systems that are more efficient, resilient,
and reliable than traditional centralized systems by
aligning incentives and fostering collaboration among
users.

Methodology
First, this study systematically examines ESG criteria and
their potential integration within the construction industry,
as well as exploring the application of blockchain
technology in this sector. The objective is to identify
viable avenues for combining ESG principles with
blockchain technology to promote sustainable, efficient,
and ethical practices throughout the construction industry.
This foundational step paves the way for further research
into the synergies between ESG standards and blockchain
technology in the construction sector, providing the
conceptual basis for designing a blockchain-based
incentive mechanism.
The second step consists of two parts: literature review
and model conceptualization. The literature review aims

to identify key concepts, theories, and frameworks related
to ESG performance, stakeholder involvement, and
sustainable development in the construction industry.
This process involved a comprehensive search of major
academic databases, such as Web of Science, Scopus, and
Google Scholar, using relevant keywords like "ESG
performance," "incentive mechanism," "sustainable
construction," and "stakeholder involvement." A
snowball method was employed, in which references and
cited works from pertinent articles were examined to
discover additional sources not identified during the
initial database search. To ensure the relevance and
quality of the sources, specific inclusion and exclusion
criteria were applied, considering factors such as the
article's publication date, the journal's impact factor, and
the source's relevance to the research topic. Finally, an indepth analysis and synthesis of the findings from the
selected articles were conducted to identify common
themes, trends, and gaps in the existing literature.
The model's conceptualization is based on the literature
review and existing frameworks related to ESG
performance and stakeholder involvement. First, the key
components of ESG performance were be defined,
stakeholder involvement, and sustainable development
within the construction industry, drawing insights from
the literature review. Second, we examine the
relationships among these key components, using existing
theories and frameworks to establish causal links and
interactions. Finally, we integrate the key components and
their relationships to create a comprehensive model that
captures the complex interplay between ESG performance,
stakeholder involvement, and sustainable development in
the construction industry.
In the third step, we first define the context by examining
the Hong Kong case, where various stakeholders, such as
the Construction Industry Council (CIC), Architectural
Services Department (ArchSD), and the Housing
Department (HD), are embedded in the local appellation.
Next, the boundary conditions to ensure the thought
experiment's relevance and applicability was established.
These conditions encompass the regulatory framework,
market dynamics, technological advances, and different
levels of stakeholder engagement, all of which could
affect the model's outcomes. Furthermore, the strategies
and directions set by Hong Kong in ESG and Web 3.0 are
also taken into consideration. Finally, to focus on the
analysis and maintain the thought experiment's feasibility,
we explicitly state the evaluation metrics for ESG and the
assumptions of the token economy model. Based on these
assumptions, we design reward and incentive mechanisms
that align with the model's objectives. This
comprehensive thought experiment enables a deeper
understanding of the conceptual model's implications in
the Hong Kong construction industry.

Figure 2 Research methodology in this study

Model design
As shown in Figure 3, implementing an incentive
mechanism for ESG stakeholders involves a multi-step
process. Initially, stakeholders participate in the
mechanism and evaluate their ESG behavior using
established performance indicators. A federated chain of
stakeholders also ensures that smart contracts can be
deployed in a distributed manner. Based on the evaluation
results, stakeholders receive tokens as recognition for
their efforts in promoting ESG practices. Furthermore, to
encourage continued adherence to high ESG standards,
additional tokens are distributed to stakeholders
exhibiting exceptional performance.

Figure 3: Overall model architecture

ESG stakeholders
Construction companies can serve as the primary
participants, as they can be responsible for submitting
their sustainability data for verification and demonstrating
compliance with established criteria to earn ESG tokens.
Adopting the necessary blockchain platform, smart
contract, and user interface would also require companies
to participate in the mechanism.
Investors in the construction industry, such as venture
capitalists and private equity firms, also have a vested
interest in the mechanism, as it can allow them to invest
in companies that prioritize sustainability. By purchasing
ESG tokens from compliant companies, investors can
have a tangible metric for assessing a company's
sustainability efforts.
Government agencies, such as the HD and ArchSD, can
play a key role in the mechanism by verifying that
companies are meeting sustainability standards and
awarding ESG tokens. They monitor the implementation

and impact of the mechanism, too, to ensure it achieves its
goals.
Independent third-party verifiers can be responsible for
ensuring the accuracy of the construction companies'
sustainability data. Using industry-standard methods, they
can evaluate the data and certify that companies meet the
established criteria for ESG tokens.
Furthermore, industry associations such as the CIC can
promote the mechanism among their members, encourage
participation, and provide guidance on best practices and
standards for sustainability in the construction industry.
ESG performance indicators
Non-financial key performance indicators (KPIs) are
crucial for organizations to comprehensively assess their
progress towards sustainability goals. As investors
become increasingly cautious about supporting
stakeholders that disregard environmental and social
performance, they recognize such enterprises as higher
risk (Kocmanova et al., 2012). A thorough examination of
the selection and utilization of performance indicators is
essential to address the economic, environmental, social,
and corporate governance aspects of business
performance.
Various agencies are dedicated to systematically
developing indicators related to environmental, social,
and economic performance. The Global Reporting
Initiative (GRI) has established a reporting framework
and comprehensive indicators encompassing economic,
environmental, and social domains (GRI, 2022). The
United Nations Conference on Trade and Development
(UNCTAD) released guidance on incorporating corporate
responsibility indicators in annual reports, which includes
a review of measurement methodologies (UNCTAD,
2018). The CFA Institute crafted a handbook for investors
outlining ESG metrics to consider when investing in
companies (CFA Institute, 2015).
The European Federation of Financial Analyst Societies
(EFFAS), commissioned by the European Commission,
has integrated ESG factors into investment decisionmaking processes (EFFAS, 2021). Furthermore, the
International Federation of Accountants (IFAC)
developed an overview of performance characteristics and
key indicators for each of the three sustainability pillars
(IFAC, 2021). The creation of supplementary corporate
performance indicators is influenced by the efforts of
international organizations that have devised macro
indicators for environmental, social, and economic
aspects. These organizations include the United Nations,
the Organization for Economic Co-operation and
Development, the European Environment Agency, and
Eurostat.
To assess the ESG performance of stakeholders in the
construction industry, a range of ESG indicators have
been developed and validated through a combination of
empirical research and industry standards (Kocmanova et
al., 2012, Veenstra and Ellemers, 2020, Kocmanová et al.,

2012). These indicators can be divided into three aspects:
ESG:
● Green Building: Standards such as Leadership in
Energy and Environmental Design (LEED), Building
Research Establishment Environmental Assessment
Method (BREEAM), and Global Real Estate
Sustainability Benchmark (GRESB) ratings are used
to evaluate the environmental performance of
buildings.
● Carbon emissions: Metrics, such as the measurement
of CO2 emissions generated by the company's
operations and construction activities (including
energy consumption and transportation), can be used
to evaluate a company's carbon footprint.
● Energy efficiency: Indicators such as energy use
intensity and the Energy Star rating can be used to
evaluate the energy efficiency of buildings
constructed by a company.
● Water consumption: Measurement of the amount of
water consumed by the company's operations and
construction activities, including irrigation and
cooling systems.
● Material use: The quantity of materials used in
construction and the percentage of those recycled or
sourced from sustainable sources can be used to
evaluate a company's material usage.
Social Indicators:
● Employee safety: Analysis of workplace injuries and
accidents and the company's compliance with safety
regulations.
● Employee diversity: Evaluation of the company's
workforce diversity in gender, race, and ethnicity.
● Community engagement: Measure the company's
engagement with local communities through
community outreach programs and philanthropic
initiatives.
● Labor rights: Examining the company's compliance
with labor laws and regulations and adherence to fair
labor practices.
Governance Indicators:
● Transparency: Metrics, such as the company's level
of transparency in financial and operational reporting
and governance practices like board composition and
executive compensation, can be used to evaluate a
company's governance practices.
● Stakeholder engagement: Indicators, such as the
company's engagement with stakeholders, including
investors, customers, and employees, can be used to
evaluate a company's commitment to stakeholder
engagement.
● Compliance: Measurement of the company's
compliance with relevant laws and regulations, such
as environmental and labor laws.

Issue tokens
The construction industry plays a significant role in
shaping the built environment and has a substantial impact
on the environment. To mitigate these effects and
incentivize the adoption of sustainable building practices,
a blockchain-based ESG token, the "EcoBuild Token"
(EBT), could be implemented.
In our conceptual model, we envision an EcoBuild token
market that facilitates transactions and incentivizes
sustainable practices within the construction industry.
Establishing a decentralized exchange (DEX) or
collaborating with existing DEX platforms can enable
trading of EcoBuild tokens, creating a market for
stakeholders to buy, sell, or exchange them for other
cryptocurrencies or fiat currencies. Integration with DeFi
can provide additional financial services, such as staking,
lending, and liquidity farming, creating opportunities for
stakeholders to maximize the value of their token holdings
and further incentivize sustainable practices. By
constructing the EcoBuild token market at the smart
contract level, transparency, security, and automation can
be ensured throughout the process, fostering a resilient
ecosystem that rewards and promotes sustainable
development in the construction industry.
The EBT can be designed with the following properties:
● Token name: EcoBuild Token (EBT)
● Token standard: EBT tokens can be built on the
Ethereum blockchain using the ERC-20 standard.
● Token purpose: To incentivize and reward
stakeholders in the construction industry for
implementing sustainable building practices and
reducing their environmental impact.
● Token use: EBT tokens would serve as a reward for
construction stakeholders that meet certain
sustainability standards. Stakeholders that earn EBT
tokens could use them as recognition for their
sustainability efforts and potentially trade them with
investors interested in funding sustainable
construction projects. EBT tokens could also help
raise capital for sustainable construction projects and
provide access to sustainable construction supply
chains.
● Criteria for earning tokens: Stakeholders would need
to meet specific criteria in order to earn EBT tokens.
These criteria could include:
● Using renewable energy sources for at least 50%
of the building's energy needs
● Recycling at least 75% of construction waste
● Using energy-efficient building materials, such
as insulated walls and windows
● Implementing a green roof or green wall
● Obtaining a LEED or BREEAM certification
● Token issuance: EBT tokens would be issued through
smart contracts on the Ethereum blockchain,
transparently and automatically, ensuring that
qualifying stakeholders are rewarded accordingly.

The formulation of smart contracts will be jointly
participated by stakeholders participating in the token
economic model to ensure that consensus is reached.
● Token transfer: EBT tokens would be transferable on
the Ethereum blockchain, allowing for trading among
investors and construction stakeholders who own
them, enabling stakeholders to use the tokens as
collateral or to raise capital for sustainable
construction projects.
● Token tracking: A blockchain-based system would be
implemented to track the issuance, transfer, and
ownership of EBT tokens, ensuring transparency and
immutability of data. This would enable government
agencies and industry associations to monitor the
performance of the incentive mechanism.
The implementation of EBT would not only incentivize
the adoption of sustainable building practices in the
construction industry but also provide a transparent and
accountable mechanism for tracking and reporting on the
sustainable performance of stakeholders. This would help
promote sustainable practices in the construction industry
and ultimately lead to a more sustainable built
environment.
Rewards and incentives
The proposed incentive mechanism utilizes a points-based
system to evaluate stakeholders' ESG performance. These
points are then used to determine the rewards earned by
the companies, which may include financial incentives or
recognition of their overall ESG score. The formula for
calculating the rewards in the form of Environmental
Building Token (EBT) is as follows:
EBT Rewards = (ESG Points / Total Possible Points) *
Total EBT Available * Tier Factor
Where:
● ESG Points is the company's overall score based on
its ESG performance.
● Total Possible Points represents the maximum
number of points that can be earned based on the ESG
performance criteria.
● The total EBT Available is the total amount of EBT
that can be earned.
● The tier Factor is a multiplier that represents the
rewards available for a specific tier, and it's based on
the predefined ESG performance thresholds.
The Tier Factor incentive mechanism, which rewards
companies based on their ESG performance, can be
optimized through various strategies. One approach
involves regularly updating the Tier Factor thresholds to
align with current industry standards and best practices,
ensuring that the rewards accurately represent companies'
actual ESG performance. Moreover, enlisting a thirdparty auditor to conduct impartial and transparent
evaluations of companies' ESG performance is crucial for

maintaining fairness and equity within the system.
Additionally, taking into account a company's size and
resources can enhance the fairness and equity of the
rewards distributed.
Promoting collaboration and inclusivity is essential;
therefore, engaging stakeholders such as suppliers,
customers, and communities in the design and
implementation of the Tier Factor is critical. This
involvement ensures that the incentive mechanism
effectively encourages companies to improve their ESG
performance. Lastly, routinely reviewing and updating the
rewards in accordance with current industry standards
helps maintain the incentives' appeal and efficacy, thus
continuously motivating companies to enhance their ESG
performance over time.

Conclusions
In this paper, we introduced a blockchain-based token
incentive mechanism specifically designed for the
construction industry, aimed at rewarding stakeholders
who engage in ESG practices. The proposed token, EBT,
functions as a reputation token representing corporate
sustainability performance disclosure. This mechanism
offers several advantages to the construction sector, such
as: 1) providing a transparent and objective method for
companies to be acknowledged and rewarded for their
ESG performance, 2) encouraging companies to improve
their ESG performance through appealing rewards, and 3)
fostering sustainable building practices by incentivizing
the use of renewable energy sources, recycling
construction waste, and adopting energy-efficient
building materials. In future research, we intend to refine
the proposed incentive mechanism and develop userfriendly interfaces for conducting large-scale feasibility
testing.

Acknowledgments
The work presented in this paper was supported by Hong
Kong Research Grant Council (RGC) under General
Research Fund (GRF) No. 1720022

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