Sustainability in Global Supply Chains: A Study on the Impact of Distributed Ledger Technology on Ethical Sourcing and Consumer Trust

Aims and Objective: The study examined how Distributed Ledger Technology (DLT) can play a role in business ethics and how the ethical conduct of business can help consumers have more confidence in the global supply chain. It further explored how the adoption of Ethical Sourcing Practices (ESP) mediates the relationship between DLT adoption and consumer confidence in the Saudi Arabian context.

Methods: A purposive sampling approach was followed in accordance with a positivist approach. In order to gather the information among 355 respondents, an online survey was distributed, and the data have been analysed with the help of partial least squares structural equation modelling (PLS-SEM) in SmartPLS 4.0.

Findings: The findings of the PLS-SEM established that DLT significantly predicted Ethical Sourcing Practices (0.641, p < 0.001) whereas ethical sourcing practices also had significant and positive impact on perceived consumer trust (0.518, p < 0.001). The direct effect of DLT on perceived consumer trust was significantly positive (β = 0.325, p < 0.001). The model explains 41% of ESP and 59% of trust. Additionally, a significant indirect effect of DLT on perceived consumer trust via ethical sourcing practices was confirmed, indicating partial mediation (β = 0.331, p < 0.001).

Results: This research combined model that correlates DLT adoption, ethical sourcing practices, and perceived consumer trust using the TOE and signalling theories. It uses data on multi-industry supply chains from multi-industry surveys (Saudi Vision 2030) to illustrate the capacity of blockchain-enabled sourcing capabilities and turn it into a trust gain.

Limitation: The research involves the cross-sectional survey data, which would allow finding statistical correlations but would not allow to establish the causality. Additionally, the results may not apply to all individuals in the industry.

Keywords: Distributed ledger technology, ethical sourcing practices, perceived consumer trust, supply chain management, TOE framework, PLS-SEM.

1. INTRODUCTION

Global supply chains that have supported world trade for over 30 years have generated social and environmental harms, including high carbon emissions, labour mistreatment, and weak regulation (Kshetri, 2021; McGrath et al., 2021). These harms become a governance problem in Saudi Arabia, which strives to establish itself as a logistics and manufacturing hub under Vision 2030: how companies can prove their sourcing practices are in line with the ethical requirements of regulators, investors, and consumers. Sustainability is not merely a reporting desire but an issue of presence and responsibility because enterprises have to demonstrate the dynamic impact of the remote production process on the population and the environment (Asante et al., 2021). The essential issue is whether companies have enough reasons to act in an ethical way because audits and corporate reporting do not necessarily provide the opportunity to see what happens when the organization has a complex network of suppliers in foreign countries. (Mohammed et al., 2024). This task is magnified in the Gulf economies, where fast trade development, multi-tier supply chain design and foreign investment are in collision with less empirical examination against sourcing information.

The visibility and trust problems are addressed directly in debates over Distributed Ledger Technology (DLT). (Wei, 2023) described that Coded as blockchain, most commonly, DLT stores the chronological records of transactions, which are impossible to modify and distributed among the members of a network. (Vinayavekhin et al., 2024) demonstrated that they are able to track a product throughout supply chain transitions so that brands can document how a raw material was transformed into a finished product. (Bernards et al., 2024) opined that ethical performance indicators are perhaps more legitimate when the certifications and environmental assertions are registered in a registry that cannot be tampered with. The theoretical debate is whether or not this infrastructural faith in code and distributed consensus substitutes, augments or does not alter long-standing suspicions regarding corporate self-reporting. Arguably, the case of DLT simply moving the paper trails online without altering the authorities over information and the management of exceptions. In that case, it may reproduce old assurance problems in a new technical form rather than solving them.

The Saudi setting sharpens this tension because ambitious sustainability objectives coexist with rapid investment in digital infrastructure. (Al-Kubaisy & Al-Somali, 2023) found technology, organisational, and environmental antecedents of adoption of blockchain in Saudi logistics. However, the impact of ledgers in monitoring and reporting of ethical performance was not clear. Vision 2030 and programmes associated with it require responsible development and enhanced environmental, social, and governance disclosure. However, they fail to describe how companies can abandon the paper-based and opaque controls with verifiable digital records of sourcing (Government of Saudi Arabia, 2025). In the absence of data that DLT adoption alters the informational basis of trust by decreasing dependence on untestable supplier claims and semi-regular audits; sustainability pledges will stay unlinked to daily procurement choices. The research fulfils a gap in the literature by outlining how Saudi companies can convert these intentions into tangible digital trust systems in the supply chains that would be observable among the external stakeholders.

Loyalty to consumers goes beyond legal conformity and brand loyalty. (Nurgazina et al., 2021) opined that trust will be enhanced as the stakeholders have the ability to match sustainability assertion with credible information about product origin and behaviour. (Joo & Han, 2021) demonstrated that the consumers will be ready to pay higher prices to goods which seem to be produced in a responsible fashion, although this intention will not be strong when they suspect green washing or verifiability of advertisements. According to (Varma et al., 2024), more meaningful evidence could be delivered by the DLT as it allows conducting a closer examination of the sourcing activities. However, (Mohamed et al., 2023) observed that research offers limited insight into whether blockchain-based transparency alters how trust is formed or whether stakeholders continue to rely on signals such as price, brand image, and certification logos. Against this background, the study examines how DLT use in Saudi supply chains influences ethical sourcing and perceived consumer trust, clarifies how digital and conventional trust signals interact, and informs debates on implementing Vision 2030 sustainability goals at the firm level.

As (Toukabri & Chaouachi, 2025) established, within the broader concept of technological transparency, local consumers are positively affected by blockchain-provenance. Simultaneously, the studies on the DLTs adoption are inclined to pay attention to the technical affordances, including traceability, security, and data integrity, instead of the way in which the mentioned features may modify ethical visibility and the formation of trust along the chain (McGrath et al., 2021; Nurgazina et al., 2021). Thus, this article presents not just a tool in logistics but also a possible means of introducing a new approach to building trust within the chain, and it posits whether, in Saudi supply chains, ledger-enabled ethical sourcing can provide a measurably more substantial boost to consumer confidence.

The research holds useful implications to practice and policy by identifying the opportunity of Distributed Ledger Technology (DLT) to support ethical sourcing and consumer confidence in global supply chains. Through highlighting the positive role of the introduction of DLT in shaping perceived consumer trust, in particular mediated by the adoption of ethical sourcing practices, the research can be used as an actionable resource to help companies enhance their transparency and sustainability efforts. The results highlighted the necessity of harmonization of technological innovations and ethical governance and, specifically, the Saudi Vision 2030 that places sustainable development and openness in the spotlight. The research provided a clear avenue towards using the DLT in the supply chain strategy to enhance consumer confidence. Moreover, it gives policy-makers an empirical basis to implement DLT-based structures of more responsible and ethically transparent supply chains in line with other sustainability agendas.

2. Literature Review

2.1. Sustainability in Global Supply Chains

Conventional discussions on supply chains have moved past cost and delivery reliability to include how companies are revamping far off manufacturing into transparent and responsible operations. (Heldt & Pikuleva, 2025) suggest that accountability is required of the stakeholders, such as customers and NGOs, by measuring the social and environmental performance. Although they bring up the point about verification, they fail to address the level to which the third-party verification is being adopted, which very crucial considering the increased relevance of credibility in responsible is sourcing. This argument is stronger as (Almabrok, 2023) asserts than how credible responsible products can be offered to appeal to more consumers who are willing to pay a higher price, but does not explain how these products could be delivered according to verifiable standards. (Park & Li, 2021) describe regulatory frameworks like the European due diligence regimes as significant but without exploring the local issue of the non-European markets like the Gulf. According to (Mohammed et al., 2024), the disadvantages of the paper-based audits are to detect the misconducts but the findings are specific to the African context and do not represent the regulation landscape of the Gulf economies. This under scrutiny demonstrates a lack of knowledge of how Gulf purchasers can successfully convert ethical sourcing pledges into daily supervision, a key concern to resource-endowed, import-sensitive economies such as Saudi Arabia.

2.2. Distributed Ledger Technology (DLT) Overview

Distributed Ledger Technology is often suggested as a way of restructuring the supply chain information capture and control. (Wei, 2023) explains that Distributed Ledger Technology (DLT) in its usual form, that is, blockchain, is the process of structuring transactions in time-stamped blocks, thereby eliminating manipulations of data unilaterally. Although this offers a high level of security, the literature does not critically examine the limitations of the practicality of the DLT adoption. The study by (Antal et al., 2025) concluded that blockchain brought about visibility in textile production in Vietnam, but the study bases its findings on cross-sectional surveys and self-reported data, which does not allow concluding about causal links. In the same fashion, (Vazquez et al., 2024) relate the implementation of blockchains to increased consumer confidence in Europe, but also their research has a limitation of self-reported data, which is susceptible to bias. (McGrath et al., 2021) emphasise the fact that good governance is the only way to ensure transparency, and possible risks include organisational resistance and lack of interoperability, but does not answer the question of how these issues are reflected in various regulatory settings. (Mubarik et al., 2021) pay attention to smart contracts but ignore the possibility of conflict or inaccuracy of the information, which may erode the validity of the system. Moreover, the articles do not address the socio-political intricacies of introducing DLT in areas such as Saudi Arabia that state regulation and digital change have to be synchronized.

2.3. Ethical Sourcing in Global Supply Chains

Ethical sourcing is a terminology used to refer to procurement processes aimed at observing labour rights, minimising the environmental impact and benefiting the local communities, yet how to operationalise this concept is still difficult. There are several strengths and weaknesses of the literature on responsible sourcing and DLT in terms of the study of ethical practices and transparency. According to (Mancini et al., 2021), the responsible sourcing standards, e.g., the requirement of fair wages and safety, are applied inconsistently across jurisdictions. These demands increased homogenous practices. Nevertheless, this specific research does not consider the fact that such standards can be extremely challenging to enforce in low-regulation settings where audits can be few and far between and records can be easily doctored as highlighted by (Kannan, 2021). According to (Zu Ermgassen et al., 2022), even the commitments of companies, such as zero-deforestation, may be undermined by intermediaries, and the suggestion is that a contract and codes fail to help uphold one such commitment. These studies identify the need for long-term and systematic monitoring as an imperative requirement. Yet, they fail critically to assess the practical obstacles to their implementation, particularly in highly diverse regulatory contexts. DLT is promoted as a traceability tool, which provides certification that is not tampered and record-keeping (Mubarik et al., 2021), but has its limitations. Small vendors can be omitted due to the absence of digital capabilities, and conflicts in the interpretation of data cannot be resolved (Zu Ermgassen et al., 2022). In terms of the signalling theory, although the transparency is enhanced through DLT-based traceability, institutional trust is required to designate it, which is not always present (Wei, 2023). Moreover, the research has also ignored socio-political and infrastructural challenges in implementing DLT in places like Saudi Arabia, where governance structures have been changing (Al-Kubaisy & Al-Somali, 2023; Asante et al., 2021). These gaps suggest that while DLT has potential, its impact upon perceived consumer trust is still uncertain and dependent on broader systemic reform.

2.4. Consumer Trust and Transparency

Consumer trust is the belief that a firm’s statements about a product’s origin and behaviour are reliable enough to inform decision-making and justify continued involvement in the relationship. According to (Singh & Sharma, 2023) facilitating sustainability by using empty slogans loses credibility by emphasising the role of facts in supporting sustainability arguments. Nevertheless, this emphasis on slogans overlooks the challenges of ensuring the sustainability claims, in particular, in areas where regulation is weak. (Veltri et al., 2023) show that with clear and accessible information on digital platforms, transparency and trust may improve, which is also not the case in their study in regard to the possible barriers to accessibility or digital divide, especially in small businesses. DLT can help resolve it by offering verifiable, time-stamped records, which allow the stakeholders to trace sourcing practices, as it was demonstrated in the study by (Da Silva & Moro, 2021), through QR codes. Although the prospect of DLT in increasing transparency can be identified, it is constrained by its use of digital infrastructure that might lock out small suppliers who might be unable to use the technology (Mubarik et al., 2021). (Kraft et al., 2022) also emphasise that greater disclosures lead to a higher level of perceived consumer trust, but do not consider how inconsistency or lack of full data may undermine trust, especially when DLT is not universally used and trusted. This disconnect suggests that in as much as DLT can create a sense of transparency, its usefulness in the development of perceived consumer trust relies on detailed, trusted, and universally available information.

2.5. DLT and Ethical Sourcing

Some of the studies have already indicated that the use of DLT can facilitate the process of responsible sourcing. The conclusion made by (Özkan et al., 2024) was that blockchain helps in controlling ethical chain operations throughout the supply chain. Another quote presented by (Zhou et al., 2022) is that smart contracts are only released to make a payment and verify compliance when operations of a company can be considered ethical, which eliminates the risk. (Nguyen et al., 2022) also conducted research to identify the barriers to the DLT adoption. They involve setting up expensive systems, experiencing difficulties exchanging information through the supply chain, and challenges with how and when the data should be protected. There are often not enough technical experts in low- and middle-income countries to help with the setup and use of DLT (Gorbunova et al., 2022). Even then, most people believe that DLT is a reliable way to maintain honest and fair input records. It helps ensure data security and ensures that information is shared with everyone held responsible.

2.6. Empirical Insights and Theoretical Relationship

The recent research is united in considering that the Distributed Ledger Technology (DLT) can contribute to the global supply chain substantially in terms of sustainability performance when analysed within the frames of the Technology-Organisation-Environment (TOE) theory, the Diffusion of Innovation (DOI) model, and the signalling theory. Several empirical studies have examined blockchain adoption using diverse methods and national contexts. Drawing on a TAM-TOE framework, (Liu et al., 2024) interviewed Malaysian agribusiness companies and used PLS-SEM to establish security-privacy capabilities, policy support, and top-management support as the main facilitators of DLT adoption. Their single-respondent, cross-sectional design, although effective in showcasing the main organisational and environmental drivers, lacks causal depth and might not be applicable to other sectors other than the agribusiness. (N’Dri & Su, 2024) undertook a fuzzy-set analysis of data collected on 243 exporting SMEs where technological readiness and external pressures were found to have a particular set of configurations that produces high transparency results. Their configurational approach emphasises the effects of contingencies but fails to examine how firms change these configurations over time. There are also additional evidences on the issue by the commodity-specific and strategic analyses. (Mohammed et al., 2024) examined the relationship between blockchain application and ethical sourcing, testing, and transparency by conducting a multi-respondent survey in the cocoa sector in Ghana, adjusting the impact of the firm and CSR orientation. There is also a risk that the cross-industry dynamics is tainted by their obsession with one commodity. The game-theoretic model created by (Biswas et al., 2023) demonstrates that manufacturers invest in DLT when reputational benefits of traceability outweigh the incremental cost of sustainability of traceability, but its abstract nature does not take into account the difficulty of the implementation in the real world. A PLS-SEM survey of Italian consumers by (Sepe, 2024) demonstrated that provenance labels created with blockchain enhance the purchase intentions of consumers by enhancing transparency and trust. Nevertheless, the intention measure is incomplete in representing real behaviour.

2.7. Research Gap

The study is progressively scrutinizing the capacity of distributed ledger technology to enhance the traceability, transparency, and perceived consumer trust in supply chains; these are some of the gaps. First, recent researches, including (Mohammed et al., 2024; N’Dri & Su, 2024; and Sepe, 2024) are largely based on cross-sectional surveys in commodity chains in Southeast Asia, Europe, and Africa and do not provide much evidence on the Middle Eastern markets where rapid sustainability reforms are underway as part of Saudi Vision 2030. Second, the majority of the contributions dwell upon perceived transparency, traceability, and purchase intent, but it does not provide a deep understanding of the perception of professionals in Saudi Arabia regarding the application of DLT to generate ethical sourcing and the chance of such a perception to increase perceived consumer trust. Third, the prevailing configurationally and theoretical approaches (TOE, DOI, signalling theory) are rarely disaggregated as to the manner in which the DLT-based smart contracts and real-time data exchange are incorporated in organisational routines and power relations. The current research, thus, takes a quantitative survey of supply chain professionals in Saudi Arabia as a method of filling contextual and perceptual gaps, and recognising that objective ESG indicators, behavioural outcome, and qualitative tracing of processes remain essential research priorities in the future. It analyses the evaluation of the respondents on the contribution of DLT to ethical sourcing practices, transparency, and perceived consumer trust in Saudi-based supply chains through structured scales which reflect attitudes and intentions.

2.8. Theoretical Framework

The case is based on the Technology-Organisation-Environment paradigm of Technology-Organisation-Environment (TOE). TOE is also chosen instead of individual-level models like TAM or UTAUT since the Distributed ledger technology (DLT) adoption to supply chains in Saudi is a firm-level, strategic decision that depends on technological attributes, organisational capabilities and regulatory and market pressures (Al Hadwer et al., 2021). In that paradigm, DLT is a type of infrastructural capability, the perceived relative advantage of which, in creating tamper-resistant and shareable records, should dominate the cost and complexity of integration (Chittipaka et al., 2023). In transparency theory views such infrastructures as devices that reconfigure information flows, monitoring, and sanctions. At the same time, capability perspectives emphasise how digital assets are mobilised through routines to support ethical sourcing and compliance. The proposed mediation, in which ethical sourcing practices transmit the effect of DLT to perceived consumer trust, recognises that ledgers do not create trust directly; instead, they enable more consistent enforcement of labour, environmental, and provenance standards that can be credibly disclosed to external audiences. Signalling theory explains how these verifiable disclosures and traceability certifications operate as market signals under conditions of information asymmetry, while also allowing for scepticism where institutional guarantees are weak. The resulting, still simplified, causal path is that DLT adoption (TOE and capability) enhances transparency, supports more reliable ethical sourcing behaviour, and thereby strengthens perceived consumer trust in Saudi-based supply chains. Trust remains multidimensional, but this model isolates a pathway.

H1: In the Saudi Arabian context, firm-level of Distributed Ledger Technology (DLT) adoption is positively associated with perceived Consumer Trust (CT).

The signalling theory claims that the available verifiable provenance information would reduce the information asymmetry and increase the trust of the stakeholders. To define how permissioned-ledger QR codes of product packaging influence perceived transparency and trust, (Laraichi, 2020) carried out PLS-SEM survey to establish how such a decision affects product packaging. Despite the fact that the research confirms the use of blockchain-based cues enhances the perceptions, the self-reported purchase intentions and use of a single European shopping scenario limit the generalisation of the study to actual buying behaviour and non-Western contexts. (Rapezzi et al., 2024) performed three experiments online across the EU countries and controlled the retailer transparency by showing the information through blockchain. Their results show that transparency increases the perceived quality and the level of trust in the retailer, which, subsequently, results in the intention to repurchase it; though, the hypothetical character of the situations does not necessarily mirror the real-life decision-making processes. On the other hand, the paper discusses the reaction of consumers to ethical sourcing disclosures through surveys about the use of DLT in Saudi Arabia combined with historical ESG indicators to comment on the influences of transparency on trust-based behaviours within the constantly evolving sustainability context.

H2: Within Saudi supply chains, Distributed Ledger Technology (DLT) is positively associated with Ethical Sourcing Practices (ESP).

The results of the survey by (Liu et al., 2024) of agricultural supply organisations in Henan Province of China indicated that the level of blockchain adoption had an influence on traceability and monitoring of suppliers using the PLS-SEM. In their opinion, those companies that have applied the ledger more actively declare a greater level of end-to-end product visibility and tighter control of the upstream partners. However, the limited and regionally specific sample of the study and the respondent design adopted in the study undermine the statistical strength of the study and the common-method bias, and are insufficient to ascribe such functional advantages to sustainability or a large-scale ethical sourcing impact of the study.

H3: In Saudi Arabia, perceived ethical sourcing practices signal and mediate the effect of DLT adoption on perceived consumer trust.

(Al Hadwer et al., 2021) conducted an online between-subjects study with Jordanian consumers to investigate the impact of disclosures about living wage and carbon certifications with smart contract verification on trust. They have enrolled that sourcing information determined by blockchain grew the faith and intentions of loyalty. However, external validity is restricted due to the utilization of self-reported intentions and one country, one product design. This data is the indication that the provenance indicators by blockchain may enhance the confidence in buyers, yet the existing research is focused on experimentation algorithms in certain spheres and does not imply real buying behaviour. The research gaps are filled through the survey of Saudi consumers and the correlation of revealed ethical sourcing facilitated by DLT and perceived trust or the actual sales performance in the context of the Saudi Arabia Vision 2030 on sustainability.

2.9. Conceptual Framework

The hypotheses are that adopting the DLT through the conceptual model not only drives change in ethical sourcing but also increases perceived consumer trust. (Fig. 1) shows that the concept of DLT would directly and indirectly build perceived consumer trust through ethical ingredient sourcing.