top of page
  • Writer's pictureAdmin

Digital Twin-led ESG: Compliance vs Innovation Catalyst?

Updated: Oct 12, 2022

By: Gavin Cotterill, Co-Host | Digital Built Australia Podcast

As the world increasingly turns its attention to environmental, social and governance (ESG) issues, organisations are under pressure to do more to address these concerns. But what is the best way for businesses to approach ESG? In this blog post we will look at two main approaches to consider: compliance and innovation.

Compliance vs Innovation programs

Typically, compliance-focused programs are designed to meet minimum standards and avoid negative publicity. These programs can be helpful in managing risk, but they do not necessarily lead to lasting change or improvements.

Innovation-focused programs, on the other hand, are designed to create new opportunities and drive positive change. These programs can help companies can deliver more effective services, attract investors, and build long-term value.

So, which approach is right for your organisation? The answer may depend on your goals and priorities. But one thing is clear the future belongs to those organisations that can innovate and create value from ESG issues and challenges.

Managing compliance and Innovation through adopting a Digital Twin

Managing environmental, social and governance related risks is a key challenge for companies today. From a compliance perspective, organisations need to ensure they have systems and controls in place to manage these risks to meet their regulatory obligations.

One way in which companies can do this is by using digital twins. A digital twin is a digital representation of a physical asset, process, or system. It can be used to bring together disparate data sets so that organisations can analyse these data sets to understand how well (or not) its assets are performing.

Digital Twin can also simulate and test different ESG strategies and scenarios, helping organisations to help identify any unintended consequences, understand risks and mitigate them before they arise. Digital twins can be used across a range of industries to manage ESG risks. Some initial examples are:

  1. In the built environment, digital twins can connect, integrate and visualise data to monitor and manage environmental impacts such as greenhouse gas emissions

  2. Supporting ESG investing by providing data-driven insights into the environmental and social impacts of physical objects and systems. For example, a digital twin of a factory could be used to assess the impacts of the factory's operations on air pollution and energy consumption. This information could then be used to inform investment decisions about the factory.

  3. Digital twins can also be used to support ESG goals more directly. For example, if an organisations strategy wants to reduce its carbon footprint, it could use digital twins to analyse data to identify opportunities for energy efficiency improvements. Additionally, digital twins could be used to monitor the implementation of these improvements to ensure that they are effective.


Compliance and innovation are not mutually exclusive. In fact, they can be managed hand-in-hand through the adoption of a digital twin. By understanding how your organisation and assets work and what is important to you from an ESG perspective, there are opportunities for you to innovate in a way that benefits both the environment and your shareholders.

64 views0 comments

Recent Posts

See All


bottom of page