Why AI's Resource Footprint Needs to be Addressed

Across economies and industries, AI can contribute enormously to achieving net zero targets.

For businesses and public services, generative AI provides the means to transform their operations, making them more efficient and effective. Yet its high resource consumption means developers and users must find ways of deploying it sustainably – otherwise, they may not only struggle to achieve their ESG goals but also hamper global efforts to decarbonise.?

“Striking a balance between AI’s operational benefits and its ecological impact is now a crucial decision for senior executives," writes Megha Kumar, Lead in Oxford Analytica’s Global Technology, Media and Telecommunications (TMT).?

Megha Kumar explores the often-overlooked and the pressing need for businesses to address its resource consumption. While AI offers the potential to revolutionize industries and contribute to sustainability goals, its high energy and water requirements pose challenges to decarbonization efforts. Kumar emphasizes that balancing the benefits of AI with environmental responsibility is crucial for meeting ESG targets and ensuring a sustainable future.

Here are a few takeaways:

• AI's Resource-Intensive Nature AI development and deployment consume large amounts of electricity and freshwater, creating a significant carbon and environmental footprint. If left unchecked, this footprint could undermine the global decarbonization efforts.
• AI's Dual Role in Sustainability While AI can drive sustainability by optimizing resource use in industries like utilities, transportation, and agriculture, it paradoxically contributes to resource depletion, particularly in terms of energy and water usage.
• The Urgent Need for Sustainable AI Practices As AI usage increases, it will face heightened scrutiny from regulators, environmental groups, and investors. Organizations must proactively explore greener alternatives, such as more efficient data centers, renewable energy sources, and water-efficient technologies.

Megha Kumar leads Oxford Analytica’s work on the Global Technology, Media and Telecommunications (TMT) sector.?

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