The financial industry has long been at the forefront of using data and technology to make better decisions, reduce risk and improve return on investment and drive better outcomes. Tackling the big challenges of our time – like climate change, energy and healthcare – depends on having the right technology and data to take the right actions.
One of the most significant technology developments of the last decade, digital twins – a digital replica of a physical asset or world – is key to building an infrastructure that supports future generations.
The Center for Digital Built Britain (CDBB), set up in collaboration between the University of Cambridge and the Department for Business, Energy and Industry Strategy, has seen firsthand how digital twins are transforming decision-making in planning, design, construction and development can improve operation of assets and the advantages of connecting the technology across organizations and industries.
Based on the Gemini principles, CDBB led the development of the UK’s national digital twin project, building an ecosystem of connected digital twins that can securely share infrastructure information in real-time for better outcomes.
If that goal seems a step too far towards science fiction, then we can take inspiration from Singapore, which recently became the first country to create a nationwide digital twin. Technology will help create more sustainable, resilient and intelligent development; Help with the expansion of renewable energies; and protect against climate change and rising sea levels.
Cross River Rail in Brisbane, Australia is another example of a publicly funded mega-project that can provide the catalyst for a city-scale digital twin. With digital twins for multiple environments constantly communicating with each other, the A$5.4 billion (£3 billion) project aims to introduce the benefits of a federated model approach to digital development.
The problems in Singapore and Brisbane that are being solved by digital twins are similar to those affecting or about to affect the UK. However, there are other use cases for the technology. The Grenfell Tower tragedy, for example, has led governments and regulators to refocus on the security of higher-risk buildings, while national and international banks are required to demonstrate the economic, social and environmental (ESG) impact of their investments. Goals.
As key investors, the financial community has an opportunity to reap the benefits of digital twins, using them to create value, pursue sustainability goals, attract new investments, and better manage risk.
The need for digital twins
Interest in the potential role of digital twins has exploded in recent years, particularly in how the technology is helping to transform the way infrastructure is planned, designed, built and operated.
It is true that modern digital approaches such as digital twins are now at the center of an emerging program of change between government and industry. They have even been mentioned in important documents such as the Construction Playbook, the Transforming Infrastructure Performance Road Map to 2030 and the Gemini Papers.
Since the introduction of the CDBB program in 2017, the quality of the discussion between industry, science and the public sector has changed significantly. The discussions have resulted in a better understanding of the use cases and benefits of digital infrastructure twins and have unlocked increased investment in the technology.
But does that also apply to the discussions between the infrastructure industry and the investors, insurers, banks and other institutions that provide much of its funding and financing?
After discussions with a wide range of investors, the conclusion is that there is huge untapped potential for investors to influence how data is used to improve infrastructure decision-making. By taking on a larger role in the digital transformation of infrastructure, investors can also help deliver better outcomes for business, people and nature.
Cooperation is the key to success
There is also a significant opportunity to leverage digital twins to support the key challenges facing the investment community: where to put capital? screening and risk management; Increase asset value by improving performance and reliability; and compliance with environmental, social and governance (ESG) requirements.
ESG lending has become more common since Great Portland Estates (GPE) signed a £450m ESG-linked revolving credit facility with a group of five banks in February 2020. Also, new roles are being created in the financial industry to focus on ESG-related investing.
The key to unlocking this potential lies in applying the fundamentals of the information value chain.
By collaborating with the broader industry to develop practical use cases, the financial community can help harness the insights gained from data to solve their most pressing problems.
The infrastructure sector must play its part and approach this dialogue with openness and flexibility. Infrastructure professionals need to understand that investors achieve their return on investment (ROI) in a variety of ways, across different types of assets and at different stages of the infrastructure lifecycle. Some of their use cases will overlap with those already being developed for supply chain companies or operators, while others will not.
We must first improve the quality of the dialogue between investors and other parts of the infrastructure sector, rethink the information value chain from an investor’s perspective, examine how investors can increase their leadership role, and share some use cases that investors are currently pursuing.
From the perspective of the infrastructure industry, there are three important steps to achieve this goal:
- Understand the diversity of infrastructure investors and what that means for the different ways they can capitalize on digital twins
- Understand how investors categorize infrastructure
- Link digital twin use cases to different investor strategies
Invest in a sustainable future
Collaboration between the infrastructure industry and investors is key to building smarter, more sustainable infrastructure. When we work together across borders and borders, we can do amazing things. We can make better business decisions that lead to better economic, social and environmental outcomes.
Progress is already being made, with spending on digital twins projected to reach $27.6 billion by 2040, according to an article published by Twinview. It will be exciting to see how the financial community joins forces with the broader infrastructure community and solution providers to leverage higher quality data and digital twins to improve investment returns, achieve ESG goals and create the sustainable future we want we all wish.
*Alexandra Bolton is Managing Director at Center for Digital Built Britain. Mark Coates, International Director of Public Policy and Advocacy, Bentley systems Peter El Hajj, Head of the National Digital Twin Program, Center for Digital Built Britain
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