AI tools leading the charge on net zero goals

With the climate crisis escalating, the pressure on businesses to reduce emissions across their supply chains and ecosystems is more urgent than ever before. The regulatory and environmental landscape is rapidly changing, as seen with the recent introduction of mandatory climate-related financial disclosures.

This shift is pushing companies to act swiftly and implement bold strategies to reduce their carbon footprint, or risk falling behind. However, with this increased urgency to act comes the challenge of knowing where to begin.

Artificial intelligence (AI) has integrated into many aspects of our lives and is a tool that can most certainly be used to help businesses on their decarbonisation journey. However, while it can have a positive impact, companies are urged to proceed with caution. One of the most pressing concerns around AI is its energy consumption. Recent research from the University of California, Riverside, revealed that ChatGPT, a widely used AI model, consumes 500 millilitres of water every time it processes between five and 50 prompts. This statistic, while eye-opening, has sparked debate over the environmental costs associated with such technology.

Despite apprehension surrounding the energy consumption and safety of AI tools, there is a great opportunity to harness their potential to help drive progress in the race toward net zero.

Maintaining compliance

It has become increasingly clear that there are still many organisations not acting to decarbonise. Schneider Electric’s Sustainability Index, 2024 found that less than one fifth of decision makers in Australian businesses had implemented an overarching decarbonising road map. But it is no longer a benefit to have a net-zero strategy in place, but a requirement.

As of January 2025, Australian organisations will be legally required to disclose climate-related risks and opportunities based on standards set by the International Sustainability Standards Board (ISSB). Businesses must include information relating to governance, strategy, risk management and metrics — including scope 1 and 2 emissions. These new standards will place increasing pressure on leaders to ensure companies meet the legal requirements for annual reporting.

This is where AI can be a most useful tool in a business’s arsenal. AI has the ability to swiftly detect inefficiencies and areas for improvement. By providing real-time insights, AI allows businesses to make data-driven decisions that can reduce emissions and optimise resource use. These capabilities range from adjusting logistics to minimising transportation emissions and fine-tuning manufacturing processes to reduce waste. AI can help businesses forecast future emissions across their entire ecosystem, enabling them to plan more effectively for long-term emission reduction.

Additionally, AI tools provide businesses with a powerful means to accurately and efficiently analyse, record, and report on emission production. Accurate reporting is more important than ever for organisations to demonstrate their commitment to sustainability. Manual processes can be streamlined and automated, and data can be analysed across the organisation, ensuring that reports are both accurate and up-to-date. This not only helps shoulder some of the weight of compliance regulations but also provides them with a clearer understanding of their environmental impact.

Responsible implementation

It is tough to ignore the burgeoning ethical concerns for companies looking to implement AI. A responsible rollout and effective education and training programs provide businesses with a strong foundation for employees to use AI to their advantage. This includes a comprehensive understanding of the environmental impact of generative AI.

The energy expenditure and resources associated with training and running these AI models must remain a consideration for any business adopting AI and there must be measures in place to minimise energy consumption. Parallel processing, quantisation, and knowledge distillation can help to maintain performance proficiency and speed while reducing the overall energy consumption of generative AI.

While the environmental footprint of AI tools cannot be ignored, they present businesses with a remarkable opportunity to utilise AI as a force for good. Responsible implementation and sufficient education can provide businesses with the means to meet the growing demands of regulatory compliance, but also enhance their operational efficiency, reduce waste, and optimise resource usage.

By understanding both the benefits and challenges of AI and how to minimise its energy consumption, businesses can leverage these tools to drive sustainability efforts. The path to net zero is not an easy one, but each change is a step in the right direction toward a greener future. *Farokh Ghadially is Vice President of Secure Power at Schneider Electric.

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