Zaid Mohammad AL Hawatmah

Type of the article: Research Article

Abstract
Creating credibility and transparency in green finance is a persistent challenge, particularly in Islamic capital markets, where green sukuk must satisfy Shariah-compliant structuring and credible verification of environmental use of proceeds. This study examines whether blockchain adoption strengthens disclosure verifiability, improves financial reporting quality, and reduces the cost of capital in green sukuk markets. Using annual issuer-level panel data (2016–2025) from Malaysia, Indonesia, Saudi Arabia, and the UAE, we apply a staggered Difference-in-Differences design and validate the estimates using Double Machine Learning under high-dimensional controls. Blockchain adoption is associated with faster and more credible reporting, reducing audit-report lag by 12.4 days (p < 0.01), discretionary accruals by 1.8 percentage points (p < 0.05), and the probability of restatement by 8.1 percentage points (p < 0.05). Financing conditions also improve issue spreads fall by 21.7 bps (p < 0.01), secondary z-spreads by 18.3 bps (p < 0.05), and bid-ask spreads by 5.6 bps (p < 0.05). Mechanism tests show that adoption increases the Text-to-Ledger Alignment Index (δ = 0.142, p < 0.01), indicating that verifiable alignment between narratives and traceable records is a key channel. Cross-country results are strongest in Malaysia and the UAE, consistent with higher regulatory readiness. Overall, blockchain appears to function as both an integrity-enhancing reporting infrastructure and a credibility signal; scaling these benefits requires policy and standards harmonization.