Study: AI can be a major driver of sustainability progress

AI is expected to have a major impact on the realization of sustainability goals, according to a new study from IBM among nearly 3,000 business leaders from around the world. Despite the potential, more than half of companies still do not use the power of AI in sustainability domain.

According to the study, 9 out of 10 executives agree that AI will have a positive impact going forward. Yet only 56% of organizations are currently using AI for sustainability. That percentage could increase in the near-term future, however, with around 32% of respondents stating that their organization is planning to implement an AI solution for sustainability in the near future.

IBM’s report notes that investments into IT for sustainability is not just about doing the right thing, effective investments can also reduce risk, energy costs, please consumers, and satisfy other stakeholders such as employees and shareholders.

One central reason why so many companies are struggling to make progress with tech-driven sustainability initiatives has to do with financial constraints. A total of 48% of companies do not derive sustainability funding from their operating budget nor a dedicated sustainability budget, but rather from their lower-priority exceptional budget.

As a result, funding IT geared at improving the carbon footprint or other sustainability objectives is regarded as a challenge by the majority of CIOs and IT leaders.

Measuring sustainability

When it comes to the KPIs that business leaders are using to measure their sustainability outcomes, the top metrics are total energy consumption, renewable energy consumption, and recycling. Other metrics that they focus on less, like plastic and water use, are important nonetheless.

One metric that has emerged as a sort of blind spot for major organizations is Scope 3 greenhouse gas emissions, or in other words, all the emissions not directly linked to an organization, but rather further down the supply chain. These are notoriously hard to monitor (and abate) because they are externals.

Another dilemma facing organizations in their journeys to sustainability is that there is a notable perception gap between C-suite executives on the one hand, and vice presidents and directors on the other.

The report found that C-suite executives are more confident than vice presidents and directors that their organization was prepared to handle different aspects of climate risks. For example, the subcategory of financial risks represented the largest gap between the groups at 13 percentage points.

Enter AI

No surprising, artificial intelligence and its little brother generative AI are touted as a gamechanger by the leaders surveyed. “AI can streamline data collection, assist sustainability leaders in understanding environmental risks, and support informed decision-making through clearer regulatory navigation,” said Ravi Kumar Mandalika from IBM.

“With advanced AI tools, we now have not only the analytical power but the unique ability to run ‘what-if’ scenarios and simulations. This capability enables organizations to make data-driven choices, ensuring that every action taken yields the optimal benefits for both business and the environment.”

Whatever the current state of AI and sustainability in an organization, the IBM study stresses the importance of investing in upskilling and in IT for intelligent asset management that can extend asset lifecycles and reduce costs.