AI, Energy and Climate at a Crossroads

3 Ways Companies Should Adjust their Sustainability Strategies, Goals and Communications

As we approach Climate Week, accelerating global AI usage and its ramifications for energy demand and the associated rise in Greenhouse Gas (GHG) emissions will be front and center. Increased demand for energy is putting unprecedented strains on national and regional electrical grids and adding emissions at a time when the planet is already feeling the climate impacts of global warming resulting from emissions released decades ago.  

According to a recent International Energy Agency (IEA) report, global data center electricity demand is projected to more than double by 2030, reaching approximately 945 terawatt-hours (TWh), with AI usage as the most important driver of this growth.

While AI applications are expected to drive some energy efficiencies, depending on the energy mix used to supply that increased demand, growing AI usage could result in global GHG emissions increasing by an additional 1.7 gigatons between 2025 and 2030 under current energy policies. Alternatively, AI has the potential to drive efficiencies across multiple industries in addition to the energy sector, and could potentially reduce global GHG emissions by 3.2 to 5.4 GtCO₂e annually by 2035 according to a recent study.

Due to the uncertainty around AI’s future climate impacts, tech companies in particular are facing growing scrutiny for backtracking, or in some cases, abandoning climate goals as their GHG emissions have grown in recent years through data center expansions. For companies that established GHG emissions baselines and set climate goals before their AI usage accelerated, sustainability strategies, goals and communications all need to be realigned with new, more accurate projections for future energy demand.

With 2030 quickly approaching, here are three ways that companies should reassess their climate goals and adjust their communications to account for a new AI-driven world:  

1. Be transparent and evolve corporate sustainability reporting

Companies need to first acknowledge that growing energy demand resulting from increased AI usage may make it difficult or impossible to meet their climate goals. Calculations of progress toward established goals should be reassessed to account for growing AI usage so companies understand how far off they may be from their initial plans.

Once this analysis is completed, rather than abandoning climate goals, or holding out hope that ambitious goals set in a pre-GenAI world are still achievable, businesses should create new stretch goals that are feasible based on current technologies and energy sources. By setting new public-facing climate goals and communicating their continued commitment to lowering GHG emissions, companies can keep sustainability a core part of their business strategies, while avoiding adding to growing public (and employee) skepticism and resistance to AI adoption.

Businesses should also consider starting to track and disclose the environmental impacts of their AI usage to enhance their existing sustainability reporting. Not only will this help with transparency, but with organizations such as the United Nations Environment Programme (UNEP) now advocating for governments to require companies to disclose the environmental impacts of AI-based products and services and for tech companies to improve their AI algorithm efficiency to reduce environmental impacts, this will likely become an expectation for future corporate sustainability reporting. Legislation has also been introduced in the EU and in the U.S. to start to track and mitigate the environmental impacts of AI, which could create new requirements for corporations to measure and disclose this information.

2. Share the upside of AI usage and help scale sustainable innovations

In addition to recalibrating climate goals and managing and disclosing AI’s environmental impacts, companies should explore and communicate how AI provides innovative ways that can help reduce their GHG emissions.

Using the energy sector as an example, data centers themselves can become more efficient and the energy grids that supply them with electricity can be optimized through AI. As electricity generation from renewable energy sources continue to grow across the globe, AI also has the potential to more efficiently integrate renewable energy into grids through better prediction and matching of supply with demand. Particularly for intermittent renewable energy sources, such as wind energy, AI can help companies align forecast energy output levels with the timing of peak consumption to support load shifting and avoid consumption during peak hours. This is good news for data centers, which are projected to transition away from coal to renewable energy as their primary electricity source in the next few years.

Joining organizations and initiatives that are exploring ways to accommodate growing AI usage while reducing environmental impacts, such as the MIT Climate Project, can help companies to accelerate the rapid adoption of innovative solutions.

3. Continue to communicate progress on sustainability goals

As companies adjust their sustainability strategies and goals to account for GenAI, it’s important to continue to share progress with key stakeholders. In addition to the importance of transparency, businesses may find new partners that can support them in achieving their climate goals and reducing the impacts of greater AI usage.

For example, our parent company, AVENIR GLOBAL partners with a third-party organization to assess progress towards its sustainability goals. AVENIR recently earned the “Committed” badge from Ecovadis, a global leader in sustainability ratings, in recognition of its commitment to sustainable and ethical business practices across the network. As we continue to roll out AI tools across our agency, we will work to assess the impacts that greater energy demand will have on our sustainability impacts and support practices that can make our AI usage more efficient.

As business leaders’ AI usage accelerates, it’s essential for communicators to proactively address the issues and opportunities this creates. By sharing GenAI’s impacts and companies’ evolving climate goals and sustainability reporting, communicators can help their organizations to adapt and not lose sight of the critical role of sustainability strategies in achieving long-term business growth.