ESG delivery: a punch of power with digital twins and blockchain

Have you noticed an uptick in company commitments to net-zero and carbon offsetting goals lately? That’s the effect of mandatory disclosure regulations that are being put in place globally to urge the widespread adoption of greener energy sources.

  • Text:Haavard Oestensen and Brian Carey

Along with this, Kongsberg Digital foresees a parallel uptick in digital transformation across existing ESG practices. After all, it’s hard to prove progress and deliver disclosure reports without the necessary data and processes in place to back up claims. With the right technology, though, it doesn’t have to be so difficult. Digital twins integrated with smart contracts and blockchain technology deliver the perfect punch of digital transformation to power ESG acceleration.

Driving a digital approach

More than just information disclosure, Kognitwin enables a digital approach towards ESG protocols that gives you a competitive edge when it comes to complying with the latest regulations. As soon as a dynamic virtual replica of your facility asset is up and running on Kognitwin’s single interface, a baseline footprint for carbon emissions can be calculated across existing operations.

Data extracted from the digital twin can then be contextualized on a continuous basis, tracking in near real-time how operations trend from the baseline. This data is available for analysis that helps you track decarbonization activities across any phase of your operations. Accurate data from the digital twin side is available at any time, ready to be delivered into smart contract networks with blockchain technology for auditable results across your value chain as and when it is needed.

A need to expand your digital ESG footprint

ESG disclosures for the purpose of meeting sustainability goals is an increasing challenge for organizations, especially since existing ESG processes usually rely on manually processed data that is prone to inaccuracies and errors. This results in data discrepancies that could lower trust in both data and any outcomes driven by said data.

Disconnected data sources that operate in silos within ESG today make it difficult to both scale initiatives and analyze transactional data for disclosure purposes. Auditing is another difficulty to tackle (especially since ESG lacks referenced standards) and automation simply hasn’t been leveraged enough to activate faster transactions across the value chain.

Digital transformation across these processes will enable companies to comply with greenhouse gas (GHG) protocols and their corresponding ESG disclosure requirements. With a digital twin, you can expand your digital footprint to:

  • accurately determine emissions sources
  • extract reliable information for analysis
  • create auditable, immutable disclosure processes for enhanced emissions reporting

Understanding the importance of ESG and GHG reporting

When it comes to carbon emissions, ESG reporting is moving towards standards that demand the same quality of data present in financial accounting. As your portfolio grows, you need to get the reporting right and scale it in the cloud to ensure that information delivery is streamlined. And not just within your own organization, but across the full value chain that is covered within the three scopes of emissions that comprise the Greenhouse Gas protocols (GHG).


Simply put, Scope 1 includes emissions produced as a direct result of your production such as flaring, methane emissions, and anything resulting from assets that you control and maintain. Scope 2 refers to emissions associated with electricity and steam that is consumed as part of production processes. Scope 3 is where the trouble really starts - it includes all indirect emissions, both upstream and downstream. In a nutshell, everything from the supply chain to emissions from employee business travel should be reported, as well as embedded emissions associated with the use of your product.


Cutting edge and competitive edge

Kognitwin’s cutting-edge digital twin technology is perfectly aligned to take on the challenge of emissions data analysis. Digital models of assets can be scaled at speed in the cloud, with data making it easy to model and predict numerous parameters across operations. An additional aspect Kognitwin delivers through our partnership with Data Gumbo is providing scope 3 emissions data sources through smart contracts, which can then be stored securely in the blockchain for further alignment with GHG protocols and ESG disclosure procedures.


Stay connected

Incorporating smart contracts through Kognitwin also allows vendors to connect in a distributed ledger, increasing transparency for a faster flow of information across the value chain. This in turn enables accurate commercial and emissions calculations that are verified in the blockchain for accuracy and adherence, ensuring that reports are up to date with the latest records.


Carbon offsets and credits

When decarbonization isn’t possible, carbon offsets and credits can be used to reach net-zero goals through carbon capture, sequestration, or other methods. Reductions and credits are then exchanged to bring companies closer to their net-zero ambitions, and this is another area where the digital twin can improve approaches towards decarbonization. Whatever your sustainability goals, Kognitwin and smart contracts built on blockchain technology offer exactly what ESG in practice needs: a progressive approach towards greener operations.