Discover an effective way to combine AI and sustainability in your digital transformation efforts, with support from SaaSCom.
The link between AI and sustainability is greater than you’d think. In every industry, the rise of advanced artificial intelligence technologies has been met with both excitement and concern, particularly from those prioritizing sustainability efforts.
On one hand, the most advanced AI technologies rely on huge data centers and large amounts of energy to operate, meaning the carbon footprint of artificial intelligence is constantly growing. On the other hand, implementing AI into business transformation strategies can also assist organizations in achieving their ESG goals, as evidenced by leaders like Amazon and Microsoft.
Ultimately, realizing AI’s full potential, both as a solution for extensive digital transformation, and a resource for enhancing sustainability, requires a cautious approach. Here’s your guide to the growing link between AI and sustainability in the modern world.
AI and Sustainability: AI’s Carbon Footprint
As you’ll see later in this guide, AI can be a powerful resource in our global quest to create more sustainable businesses and ecosystems. However, like any technology it’s not without its challenges. The success of innovative new solutions, like OpenAI’s ChatGPT language model, has prompted a growing demand for more powerful intelligent systems.
However, as AI pervades more digital transformation trends, its carbon footprint is constantly growing. Concerns around AI and sustainability have been mounting for the last decade, as each new ecosystem uses more computing power over time.
It’s easy to overlook the environmental impact of software in the IT landscape, despite the fact that data centers account for around 1.5% of all global electricity use. They also account for a significant portion of the world’s carbon emissions, which need to be cut in half if we hope to achieve the net-zero emissions goals set for 2050 by the IEA.
Simply using powerful AI solutions can cause more damage to the environment than good. According to the MIT Technology review, generating about 1,000 images with a powerful gen AI model, will create as much carbon dioxide as driving for 4.1 miles in a gas-powered vehicle.
So does this mean that we need to eliminate AI to achieve true sustainability? Not necessarily. The reality is that AI’s carbon footprint is bigger than most people think. However, a commitment to using and developing AI correctly, can potentially mitigate this risk, and drive additional benefits for businesses undergoing transformation.
The Positive Link Between AI and Sustainability
Many of the conversations about AI and sustainability in the world today revolve around the excessive computing power and energy needed to run AI systems. However, there is another side to the story. According to a Sustainability study conducted by IBM in 2023, 37% of business leaders are already using AI to achieve sustainability goals.
Even world leaders like Microsoft have launched initiatives like the “Planetary Computer” program, which focus on using artificial intelligence to identify ways of tackling some of the world’s most pressing environmental problems, from climate change to biodiversity loss.
In many ways, the connection between AI and sustainability is similar to the link between sustainability and the cloud. Running cloud-based communication systems requires large data centers, just like AI, which consume a lot of energy.
However, these cloud technologies can also reduce paper waste and travel, enable hybrid work, and empower companies to operate smaller office buildings.
Similarly, using AI tools has an environmental impact, but AI can also be harnessed in a range of scenarios to contribute to sustainability goals. In fact, a report by PWC found that the application of AI could reduce worldwide greenhouse gas emissions by 4% in 2030. That’s equivalent to the annual emissions of Japan, Canada, and Australia combined.
How AI and Sustainability Work Together
Artificial intelligence is a broad, versatile resource, with a wide range of use cases. AI can help companies tackle a range of sustainability issues, from carbon reduction, to managing supply chains. Let’s explore just some of the key ways AI and sustainability work together in business transformation initiatives.
AI Empowers Data-Driven Sustainability Decisions
According to an IBM survey, lack of insight from data was the biggest sustainability challenge for 44% of modern CEOs. If there’s one thing that AI does well, it’s process and democratize data. Specialist solutions are already emerging to help companies leverage the data they need to make sustainability-driven decisions about business growth.
For instance, Microsoft’s Sustainability Manager can help companies quantify how facilities, physical assets, cloud resources, and frameworks impact their water use, energy consumption and carbon emissions. Advanced data insights also give companies clues on how to combine, and integrate different technologies to reduce energy usage.
AI can also unlock hidden value on a company’s journey towards sustainable digital transformation models. An AI simulation model, for instance, can analyze and map the ideal flow for a supply chain, and help businesses to reduce emissions on multiple levels. AI can also be combined with IoT devices and sensors that empower teams to make sustainable decisions in real-time.
AI Improves Transparency and Tracking
Another way AI and sustainability work together, is by giving companies real-time insights into their environmental footprint, and ensuring they can accurately report on their ESG initiatives. Companies can use AI systems to analyze emissions data from their operations and supply chains, ensuring they can adhere to evolving environmental reporting guidelines.
This not only helps companies meet with regulatory requirements, but helps to build trust among stakeholders, and give businesses more of the right data to make intelligent decisions. With more accurate tracking tools, companies can benchmark their performance in a range of sustainability areas, and gradually make changes to transform daily operations.
Business leaders can pinpoint the biggest issues in their operational strategy from a sustainability perspective, and then use AI-driven models to experiment with different potential fixes. Some AI tools can even help companies mitigate issues before they occur. For instance, an AI algorithm can predict waste generation patterns, to help companies optimize waste management strategies. They can also monitor water usage and identify areas where water can be saved and reused.
AI and Sustainability in Resource Optimization
Intelligent solutions can play an important role in resource management, particularly when it comes to the management of energy. In the industrial sector, for instance, AI algorithms are frequently deployed to manage and optimize energy usage automatically across operations. These systems can monitor equipment performance, schedule maintenance, and even identify off-peak hours to use additional energy, to reduce costs and consumption.
In the data center landscape, AI systems can predict energy needs and adjust usage in real-time. The use of big data in AI also means companies can perform comprehensive analyses of their products and services, identifying where resource usage is high, and where more sustainable alternatives are available.
Intelligent tools also play a valuable role in the integration of renewable energy into business ecosystems. By predicting how much energy a company can produce and use from renewable resources like wind and solar, AI can help to balance the grid. It ensures businesses can access the energy it needs, while maximizing the use of renewable sources.
There’s even the potential to use AI in the wider energy sector, to create smart grids that adjust the flow of electricity based on real-time supply and demand conditions, minimizing waste.
Generative AI and Sustainability
The rise of generative AI has surfaced many concerns about how detrimental large algorithms and models can be to the environment. While it’s true that generative AI uses massive amounts of energy and resources, it can also help to revolutionize sustainability practices.
Innovative companies, like Amazon, are using generative AI to simulate, and analyze various design variations for products, to identify those that use fewer resources, or generate less waste. Amazon even uses generative AI assistants to help guide customers towards the right purchases, reducing the risk of returns, and minimizing the number of vans on roads.
Even the fashion industry is using generative AI to produce clothes that are more aligned with sustainable practices, reducing overproduction and waste.
In the field of architecture and building construction for businesses, generative AI helps companies create environments that are more energy efficient, and tuned to the needs of hybrid workers. The application of generative AI even extends to packaging design. Companies can use these tools to create packaging solutions that are functional, but also biodegradable or recyclable.
The Impact of AI on Sustainable Supply Chains
Many companies embracing AI for strategic growth and business transformation champion its ability to streamline countless processes and improve business efficiency. However, AI can do a lot more than simply boost team performance and reduce risks with automation.
In the supply chain, for instance, where many companies struggle to achieve their ESG goals, artificial intelligence can play a critical role. Intelligent algorithms can analyze supplier data on the behalf of companies, to ensure compliance with sustainability requirements. This helps businesses ensure they’re maintaining ethical supply chains and compliance with regulatory standards.
AI is also instrumental in optimizing transportation and logistics in the supply chain landscape. It can predict demand, help companies choose the most efficient transportation routes, and reduce greenhouse gas emissions. In certain industries, like agriculture, AI is already being used to track and optimize the complete supply chain, helping to optimize crop health, harvest schedules and distribution, reducing food insecurity.
The Complicated Link Between AI and Sustainability
Ultimately, there’s a clear synergy between AI and sustainability. AI can be harnessed in a range of environments to reduce the impact of climate change and carbon emissions. It can empower companies to reduce their carbon footprint more proactively, and make intelligent decisions about digital transformation initiatives, while prioritizing sustainability.
However, to realize AI’s full value as part of a sustainability strategy, companies need a comprehensive strategy. Too often, AI initiatives are overseen by technical teams whose main focus isn’t on reducing emissions and waste. Instead, businesses need to take a comprehensive approach to aligning AI and sustainability throughout their business transformation strategy.
Additionally, business leaders will need to ensure that there’s clear alignment between the technology, and the people in their teams responsible for driving their organizations forward.
No single AI solution or tool can address every sustainability challenge a company might face. It can’t eliminate the hard work of making difficult decisions about how to change sourcing, manufacturing, or production processes, it can only provide companies with the right directions.
If the right alignment isn’t in place, companies risk implementing AI tools that actually increase their carbon footprint, and drive them further away from their sustainability targets.
Take a Sustainable Approach to AI Implementation
The link between AI and sustainability is ever evolving. Clearly, AI adoption is a priority for businesses who want to streamline processes, innovate, and transform, but sustainability is quickly becoming an essential consideration too. In fact, according to IBM, 72% of executives now think sustainability is a “revenue enabler”, rather than a drain on resources.
As businesses look to implement AI technologies and unlock new innovation strategies, it will be important for them to consider their end-to-end sustainability goals and challenges. A comprehensive, cautious approach will ensure business leaders can not only choose the right AI tools to match their ESG strategies and transformation goals, but implement it correctly too.
At SaaSCom, we help companies from all industries to unlock the full potential of their digital transformation initiatives, with a focus on the power of sustainability. Not only do we help companies make the right decisions about which innovative vendors they should be working with, but we help them implement initiatives that offset their carbon footprints and improve their impact on the planet.
Our unique approach to funding, guiding, and supporting digital transformation initiatives helps business leaders achieve incredible results with new technologies, while ensuring they can do their part for the environment. Contact us today to learn more about how we can help you connect AI and sustainability in a way that benefits both your business, and the world.
