IBM’s State of Sustainability Readiness Report 2024 shows that 88% of business executives plan to increase IT spending for sustainability, with over half viewing it as expansion rather than cost reduction. However, AI technology remains underutilized.
The untapped potential of AI:
A survey shows that 90% of executives believe AI can help them achieve sustainability goals. However, 56% of organizations are not actively using AI, possibly due to financial constraints.
Survey participants identified financial planning as the biggest obstacle to sustainability investments, with 48% of IT investments being one-off, potentially due to financial limitations, as per the survey.
Companies are striving to reduce the energy consumption required for effective AI usage. The trend of AI adoption is promoting sustainable practices in organizations, such as open-source partnerships, energy-efficient processor investments, and optimizing data processing locations. These strategies can enhance cost-effectiveness and operational efficiency while reducing AI’s environmental impact. However, finding suitable talent and addressing skills shortages pose challenges.
Difficulty Measuring Sustainability: The integration of sustainable practices and technology into businesses raises the question of how sustainability can be measured. The survey revealed that leaders prioritize resource efficiency, with recycling, total energy consumption, and renewable energy consumption as their top three sustainability KPIs.
According to the report, one of the top three challenges respondents are currently facing is measuring sustainability KPIs. Their data to measure sustainability KPIs isn’t mature, according to 50% of business leaders, which can make reporting even more difficult.
29% of respondents value increasing reporting accuracy as the top benefit from new technology implementation, despite over half stating that compliance and reporting are challenging for their companies. For example, Ikano Group has significantly reduced manhours by automating ESG data collection and analysis, capturing and tracking over 15,000 data types for CSRD reporting.
Perception Gap Between the C-Suite, Staff:
Regarding sustainability expectations and perceptions, the report also found a notable gap between top executives and their employees. When it comes to enhancing climate resilience, C-suite executives are more upbeat than their directors and vice presidents. Only 56% of lower-level decision-makers thought their climate resiliency initiatives were proactive, while 67% of top executives thought so. This discrepancy covers subjects like supply chain risks, financial risks, and risks to the physical infrastructure.
Actionable strategies:
Invest in AI tools like generative AI to reduce carbon emissions, develop eco-friendly business scenarios, and solve climate crises, ensuring sustainability goals are achieved. To understand C-suite and lower-level decision-makers perceptions of sustainability challenges, organizations should gather data from all business areas. Utilizing data analysis and reporting tools can identify potential blind spots, thereby enhancing organizational visibility and alignment.
The goal is to bridge the perception gap between senior executives and lower-level decision-makers by focusing on data.
Thought leadership:
“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 Christina Shim, Chief Sustainability Officer at IBM. “Leaders should stay thoughtful about minimizing environmental impacts while adopting AI, but the data shows a lot of opportunity for progress on both sustainability and costs.”
“Whether organizations are looking to begin their sustainability journey or already have experience in the matter, collecting and accurately classifying their data is critical to developing more sustainable practices,” said Kendra DeKeyrel, VP, ESG & Asset Management Products Leader at IBM. “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”
The survey analyzed by Morning Consult, includes interviews with 2,790 business executives from 15 industries and 9 countries.
