Bridging the ESG Governance Maturity Gap in Western Balkan Banking: EU Regulatory Pressure, Assurance Gaps and a Blockchain-Enabled Transition Framework

This study examines how environmental, social and governance (ESG) pressures are translated into verifiable governance practices in European banking and asks why this translation remains uneven in the Western Balkans. Drawing on institutional theory, Europeanisation and the evolving architecture of the Corporate Sustainability Reporting Directive (CSRD), European Sustainability Reporting Standards (ESRS), prudential ESG risk governance and sustainability assurance, the article distinguishes between ESG pressure and ESG measure. The empirical analysis uses an original, manually coded dataset of 55 banks across eleven European countries. A governance-oriented maturity framework captures the progression from CSR-dominant disclosure to formal reporting standards, board-level integration and external assurance. Descriptive statistics and group comparison tests reveal a pronounced institutional divide: EU-core and Croatian banks occupy the highest maturity category, while banks in selected Western Balkan systems remain concentrated around partial integration and lack local assurance. A robustness comparison using ESG_core, which excludes reporting standards and assurance, confirms that the regional divide persists beyond those mechanically related components. A double-coded subsample of 17 banks further demonstrates substantial-to-perfect inter-coder reliability across the principal coded dimensions. The article then develops a complementary policy architecture for a permissioned, blockchain-enabled ESG data platform based on standardized application programming interfaces, off-chain data storage, on-chain hashes and shared attestations. The proposed design links triple-entry accounting principles with regulatory supervision and independent assurance while explicitly addressing data protection, interoperability and the oracle problem. The article contributes by integrating comparative evidence on ESG governance maturity with a technologically realistic pathway for reducing data and assurance gaps in transition economies.