Seal x Proof: Why Web3 Companies Need Dedicated Web3-enabled ESG + Impact Measurement Solutions

Read the original article from Proof here.

About Seal

Seal is a revolutionary data platform, making Web3 accessible for all. Seal connects clients to decentralized cloud
storage, to make Web3 an accessible reality for enterprises, research institutes, NFT and Web3 firms alike. Seal
stores data to verify scientific research, preserve NFTs, and combat misinformation.

Impact Measurement + Web3

From the start, Seal knew that sustainability would be an important facet of the business. As a Web3 company, Seal
wanted to ensure that its leading-edge technology solutions do not come at the expense of the environment and
society. With projects focused on combatting misinformation and preserving immutable historical records regarding
human rights violations, war crimes, and genocide testimonials, as well as important scientific research data, Seal’s
technology has inherent societal impact.

Beyond quantifying the social impact that is inherent in the data solutions it provides, Seal seeks to understand and
improve its operational impacts, including its environmental footprint, employee engagement and satisfaction, and
its ethical governance practices.

For Seal - as with any company beginning its ESG+Impact measurement journey - the biggest immediate challenge
was choosing the right guidelines and standards that Seal could reasonably set and maintain over time. Seal knew
that its data centers would consume a lot of energy, so it chose to prioritize a commitment to renewable energy from
the start. The next challenge was maintaining transparency with the public and Seal’s clients.
Beginning in November 2021, Seal partnered with Proof to define a scalable strategy for ESG + Impact
measurement, determine a low-maintenance approach to data collection and reporting, and transparently showcase
third-party validated ESG + Impact data via a public-facing performance dashboard.

1. Defining an ESG + Impact Strategy

First, Seal completed the Proof Digital Impact Assessment to identify the most critical ESG+Impact measurement
and management focus areas for a Web3 company. The Seal team aligned on 3 prioritized outcomes:

1. Data Reliability and Security: Increased access to reliable data
2. Transparency: Enhanced trust in information quality
3. Sustainability: Accelerated adoption of clean storage technology

Materiality Assessment:

With the high level ESG+Impact focus areas defined, Seal further narrowed its focus through an internal
materiality assessment. Seal’s materiality assessment took the form of an internal leadership team discussion
to identify the team’s most critical focus areas. Seal focused on double materiality, in order to select
ESG+Impact indicators that both contribute to Seal’s financial viability and that impact Seal’s external
stakeholders including people and the planet.

Focus is the name of the game when it comes to developing an ESG+Impact measurement strategy. Seal’s
leadership team recognized the importance of many potential ESG+Impact categories - ranging from water
consumption and waste management, to customer privacy and employee engagement. Following best practice
guidance, Seal narrowed its focus to 4 impact categories with the highest anticipated business and stakeholder
impact: Energy Management, GHG Emissions, Community Engagement, and Ethical Behavior.

Metric Selection:

Next, Seal defined performance metrics to collect and transparently report to its stakeholders. With the most
important categories defined, Proof recommended metrics from the IRIS+ and SASB metric sets where Seal could
direct its immediate focus on measurement and improvement. From a list of 40+ recommended metrics, the Seal
team aligned on the seven immediate metrics that are most important for both Seal’s internal team and external
stakeholders (i.e. investors, customers, and community members) with known data availability.

2. Data Collection + Integration

With the list of metrics defined, Seal worked with Proof to define a scalable data collection approach. It was essential
for Seal to minimize time spent on reporting while ensuring data accuracy and reliability. As a result, Proof
established data integrations with Seal’s existing data sources in order to automatically stream updated data into the
Proof dashboard on an ongoing basis. This way, the Seal team can reduce time spent on manual data reporting and
instead dedicate its time to acting on data insights in service of Seal’s mission.

Energy Consumption:

Seal’s greatest known ESG+Impact risk and opportunity was its energy consumption. Seal’s operations rely on two data
centers with unique energy profiles: Switch (a data center located in Las Vegas, Nevada and running on 100% renewable
energy) and Cologix (a data center located in Montreal, Canada and running on 97% renewable energy). Proof sourced
Seal’s energy consumption data from each data center and established a data pipeline that would allow new data to
stream into the Proof platform. Since the data was integrated with the source, the data has an added layer of reliability.

Greenhouse Gas Emissions:

Beyond understanding the energy consumption from Seal’s data centers, Seal needed to quantify its GHG
emissions. Given the renewable energy profiles and geographic coordinates of Seal’s data centers, Proof applied
location-based and market-based emissions factors to estimate Seal’s greenhouse gas emissions.

3. Insights + Action

Seal used the insights gained from the Proof platform to define a scalable data collection approach to inform its
decision-making and action plan. With a clear focus on the prioritized outcomes of Data Reliability & Security,
Transparency, and Sustainability, the Seal team can now use the data collected and integrated by Proof to monitor
progress, identify areas for improvement, and take action to achieve their mission of accelerating the adoption of
clean storage technology in the Web3 industry. By dedicating less time to manual data reporting and more time to
analyzing insights and taking action, Seal is better equipped to achieve its ESG+Impact goals.

Transparency:

As a Web3 company, transparency is Seal’s highest priority for ESG+Impact measurement.

“Transparency is important to Seal as it is a major benefit of blockchain technology. The transparency created by Proof is a valuable tool to prevent greenwashing.” - Kelly Clark, Director of Communications, Seal

Greenwashing is when organizations falsely report their sustainability initiatives or manipulate emissions data to
appear more sustainable than they are. The immutability of blockchain can prove that organizations are not
greenwashing and sets a standard of transparency.

"Web3 allows us to pull data from the source and make it publicly available so that we can prove that the data has not
been edited or tampered with, says Seal’s Director of Communications Kelly Clark. “The Proof dashboard is the
perfect tool to align with Seal and blockchain’s promise of transparency and immutability."

Action+Improvement:

Many organizations pursue ESG+Impact measurement as a check-the-box exercise. Now that we have measured our
impact, we can check the box and move on - right? some might say. An equally - if not more important - part of the
process is active performance management.

This is where the real work starts for Seal.

Seal’s market-based emissions - factoring in the renewable energy sources procured by the company’s data centers
- are minimal due to the reliance on renewable energy. On the other hand, Seal’s location-based emissions are
significantly higher and capture the total estimated carbon emissions based on average grid emission factors (not
taking into account the renewable energy profile of Seal’s data centers).

Seal’s commitment to procuring renewable energy contributes to overall market demand for renewable energy and
means that there are limited emissions associated with Seal’s data center solutions. As Seal grows, it is essential for
the company to minimize its overall energy consumption and resultant greenhouse gas emissions. Moving forward,
Seal will focus on increasing the energy efficiency of storage and the energy efficiency of filecoin rewards, in order to
reduce total energy consumption per unit. For the greenhouse gas emissions that cannot be reduced, Seal plans to
purchase RECs to offset its emissions.

“As we take on more customers, we will inevitably store more data in our data centers. This increased storage will naturally increase our electricity consumption; however; we hope to use the Proof dashboard to track increases and explore areas where we can reduce our emissions and consumption. The Proof dashboard is a valuable tool to make sure that as we grow as a company and take on more important data, we are doing so sustainably and responsibly. - Alex Altman, Chief Operating Officer, Seal

The Path Forward

Seal is motivated to stay on the cutting-edge of both Web3 technology and ESG+Impact measurement.

Opportunities for Seal to expand its impact measurement capabilities in the future include:

→New Metric Identification: Through an external materiality assessment, Seal can work with stakeholders to
identify the most important impact areas to track, to ensure that it is reporting on the issues that matter most to its
core stakeholder groups (investors, clients, and others)

→Active Performance Management: Seal will put in place the governance structures and incentive structures to
actively manage its performance on key metrics, including identifying opportunities to further reduce energy
consumption and carbon emissions

→Thought Leadership: Seal will use its innovative platform to share best practices for ESG + Impact
measurement with other Web3 companies
Thinking to the future, Kelly Clark says, “Seal’s hope is to set and maintain standards for ourselves as well as set an example for other data storage providers and the larger Web3 industry.”