Strong Support for Corporate Investment in AI for Sustainability

IBM released its first State of Sustainability Readiness Report 2024, revealing that 88% of business leaders surveyed are planning to increase investment in IT for sustainability over the next 12 months. The research showcases that over half of respondents across a range of industries see investing in technology for sustainability as an opportunity for growth, not just cost mitigation.

Despite business leaders' views on sustainability-related IT, however, the report reveals that action is not matching ambition — especially when it comes to AI technology. Almost universally, respondents had a positive take on AI's potential for sustainability: 9 out of 10 surveyed executives agree that AI will positively influence achieving their sustainability goals. However, the report found that 56% of organizations are not yet actively using AI for sustainability. This discrepancy may come from budgetary constraints, as survey respondents identified financial planning as the top challenge to investing in sustainability.

According to the report, 48% of IT for sustainability investments are "one-off" rather than funded from a regular operational budget. To responsibly tap into the potential of AI, organizations also need to account for the energy use it demands—something leaders are trying hard to mitigate. This new trend of AI adoption is galvanizing organizations to employ more sustainable practices, such as optimizing data processing locations, investing in energy-efficient processors, and leveraging open-source collaborations. These strategies can not only reduce the environmental footprint of AI but also enhance operational efficiency and cost-effectiveness. Finding the right AI talent is also an issue: staying staffed with experienced workers amid current skills shortages is one of the top three sustainability business challenges leaders are facing, according to the report.

As organizations continue to embed sustainable practices and technology into their operations, one key question remains unanswered: How do you measure sustainability? Surveyed leaders mostly looked to resource efficiency, citing renewable energy consumption, total energy consumption, and recycling as their top 3 KPIs for sustainability outcomes. The report also revealed that measuring sustainability KPIs is a top-three current challenge faced by respondents. 50% of business leaders noted that their data to measure sustainability KPIs isn't mature, which can make the reporting process even more challenging.

Over half of respondents agree that reporting and compliance are challenging for their organization, yet only some (29%) of respondents identified improving the accuracy of reporting as one of the top 3 benefits they would most appreciate from implementing new technology. The report also revealed a significant disconnect between top executives and their staff when it comes to sustainability perceptions and expectations. C-suite executives are more optimistic than their vice presidents and directors when it comes to bolstering climate resiliency. Indeed, 67% of top executives surveyed viewed their climate resiliency efforts as proactive, compared to just 56% of lower-level decision-makers. This disparity spans topics including financial risks, physical infrastructure risks, and supply chain risks.