Canalys: AI threatening green progress
Analysts share why it’s not been a good year on the ESG front, and some of the routes to improvement the industry could make
A clear paradox is emerging in the industry, with artificial intelligence (AI) generating a significant carbon footprint at a time when improving sustainability and meeting net-zero targets are key ambitions for many businesses.
Over several sessions at the Canalys Channel Forum, the extent of the problem became clear, with AI tools and their energy demands driving up emissions.
Elsa Nightingale, principal ESG analyst at Canalys, said AI was creating the “biggest existential crisis” threatening to counter sustainability efforts made by the industry.
She said corporate sustainability had taken a beating over the past year, and there was no clearly positive way out of the current situation.
Using ChatGPT as an example, a query using the AI tool uses 866% more electricity than a simple Google search.
“There are about nine billion searches on ChatGPT every single day,” she added. “Datacentre emissions are likely 662% higher than we are currently estimating.”
Nightingale said emissions accounting has caused some problems, but that Google and Microsoft have seen them increase significantly, even though efforts have been made to cut them. “We know that emissions have blown through the roof in the last couple of years,” she said.
Training resources
Nightingale said it was the resources needed to train AI models, even more than the operation of those tools, that were creating significant problems, with the computational power needed for AI deep learning doubling every 3.4 months since 2012.
On top of that, some of the sustainability commitments from vendors are being cut, with some problems emerging with measuring the science-based targets, but there had also been some reassessment of the publicly stated commitments from some players in the industry.
Steve Brazier, co-founder of Canapii, advised the industry to stick to short-term, more realistic timeframes with their sustainability commitments.
“All the big companies now have to write their corporate sustainability reports, which is all about consultants telling them to make 20-year projections about how their business will develop,” he said.
“We don’t know if our business will exist in three years or five years, because we fail, because of M&A, because of all sorts of changes,” said Brazier, adding that no one would believe a pledge made by a politician about the state of the country two decades from now, and the same should apply to companies.
“As you think about your move into ESG and where you can make a difference, whatever the consultants tell you, what are you going to do this year that was different to last year? What are you going to do next year that’s different than last year? Forget all this nonsense that’s been published and causing a lot of damage to the credibility,” he said.
Transparency needed
Nightingale said the failure to hit long-term goals would undermine trust, and there was a need to be transparent about ESG commitments.
Despite that, she stressed that many channel partners were looking towards AI as an increasing source of revenue and that the technology did deliver benefits. “The negative environmental impact that AI is having does not outweigh the positive contributions that AI is making,” she said.
Nightingale added that it was not just sustainability that had suffered – diversity teams had also been slashed, as well as the number of women working across the channel. “We are seeing some retrenchment and walk-back on commitments related to diversity, equity, inclusion and otherwise,” she said.
“We have seen lots of the vendors slash their DEI teams entirely or cut them,” she said. “If you are not targeted on something, why would you spend time doing it?”
Just under a third of partners had cut DEI teams, and a third did not have any due to a lack of internal resources. “The partner community has made some progress on diversity, equity and inclusion, but it is slow,” added Nightingale.
If Brazier’s advice was to keep commitments more realistic and short-term, the positive note from Nightingale was around the opportunity that was still out there for channel players that invested in ESG.
“We have got room to innovate,” she said. “There is room to commercialise ethical, sustainable and responsible AI. What does that look like? Even I don’t have the answer, but there is room to commercialise that. Partners are gearing up to that and vendors are gearing up to do that, and we have to get better.”
