The Role of Digital Twins in Environmental, Social, and Governance: A Sustainability Perspective for Companies

Environmental, Social, and Governance (ESG) is a priority for companies that are required to adopt innovative strategies for sustainability, compliance, and corporate responsibility. Investors use ESG criteria to evaluate the future financial performance of companies by assessing their level of responsibility and sustainability. National regulations also require companies to transparently report their ESG performance in their financial statements. Digital Twin technology is an emerging innovation that enables companies to create virtual counterparts of real-world entities, including physical assets, processes, and even entire organizations. By integrating real-time data, Digital Twins provide advanced functionalities such as monitoring, simulation, prediction, and optimization, enhancing operational efficiency and decision-making. In this paper, we examine the role of Digital Twins in supporting the implementation of ESG principles within organizations. Our findings are based on experiences with various Italian companies across different sectors undergoing digital transformation processes. We also discuss key issues that companies must address when integrating ESG principles with Digital Twin technology.