An overwhelming majority of business leaders plan to increase their investments in IT for sustainability over the next 12 months, with 88% committing to increased spending, as per a survey by IBM. Over half of the respondents see investment in sustainability-related technology as a growth driver rather than just a cost factor.
The IBM-sponsored ‘State of Sustainability Readiness 2024’ report is based on a survey conducted by Morning Consult on 2,790 business leaders and decision-makers. The survey took place between April and May 2024, involving participants across 15 industries and nine countries.
Despite the intent to invest, challenges remain in terms of action, especially around sustainability measurement. The report highlights renewable energy consumption, total energy use, and recycling rates as key performance indicators (KPIs) for sustainability. However, 50% of those surveyed indicated that their data for measuring these KPIs is not yet mature, complicating the reporting process. Over half of the respondents also face compliance and sustainability reporting issues, while only 29% consider improving reporting accuracy as a key benefit of implementing new technologies.
“Whether organisations are looking to begin their sustainability journey or already have experience in the matter, collecting and accurately classifying their data is critical to develop more sustainable practices,” said IBM’s VP, ESG and asset management products leader Kendra DeKeyrel. “This research shows that business leaders understand the importance of a data-driven approach to sustainability – and are willing to invest in technology to accelerate this process”
AI’s potential for sustainability remains untapped
AI technology is seen as having significant potential for sustainability, with nine out of ten executives surveyed agreeing that AI will contribute to achieving sustainability goals. However, 56% of organisations are not yet actively using AI for sustainability purposes.
The primary challenge as per the findings of the study appears to be budgetary constraints. The study notes that 48% of sustainability investments are currently “one-off” expenditures rather than part of a consistent operational budget, making it difficult to fully realise AI’s potential for mitigating environmental impact.
Organisations are adopting sustainable practices to mitigate the environmental impact of AI, such as optimising data processing locations and investing in energy-efficient processors.
“Businesses see huge potential for AI to boost both their sustainability efforts and their bottom line, and it is exciting to see those incentives aligned,” said IBM’s chief sustainability officer Christina Shim. “Leaders should stay thoughtful about minimising environmental impacts while adopting AI, but the data shows a lot of opportunity for progress on both sustainability and costs.”
A significant perception gap also exists between senior executives and other decision-makers regarding sustainability. Sixty-seven percent of C-suite executives believe their climate resiliency measures are proactive, compared to only 56% of directors and vice presidents. The disparity covers financial, physical infrastructure, and supply chain risks.
The State of Sustainability Readiness Report offers several recommendations for organisations aiming to improve sustainability practices. It advises businesses to adopt AI tools suitable for their operations, including generative AI for identifying carbon reduction opportunities, to transform sustainability ambitions into actions.
The report also recommends that companies use data analysis to close the perception gap between executives and lower-level decision-makers. By gathering comprehensive data from across the organisation, companies can identify differences in sustainability perceptions and align internal goals more effectively, the report suggests.
Recently, Accenture published a report urging global companies to adopt AI in order to meet net zero targets. The study revealed that only 16% of the world’s largest companies are on track to achieve net zero emissions by 2050, while nearly half (45%) are still increasing their carbon footprint, emphasising the critical need for AI-powered monitoring solutions to curb emissions growth.
Read more: Global companies urged to embrace AI to reach net zero targets
