Can Green AI shape the future of sustainability?
AI's environmental cost is well documented, but a new movement called Green AI is emerging to change that, cutting energy use while tackling biodiversity loss and climate resilience. The piece looks at what this shift means for companies and investors.
It is a well-known fact that large artificial intelligence (AI) models are presenting challenges for the environment, with the massive computational power they require leading to high electricity and water usage and negative environmental impacts. To put this into perspective, OpenAI’s ChatGPT query demands 10 times more energy to process compared to a Google search and, given the surge in the use of AI, Goldman Sachs predicts data centre energy consumption will soar by 165% by 2030 1.
Yet in recent times there has been an emergence of a new type of AI provider, with a focus on the deployment of systems that minimise their environmental and ethical footprint – a concept known as ‘Green AI’.
What is Green AI?
Where traditional AI (known as Red AI) prioritises performance, Green AI focuses on achieving the same performance with less energy and waste, as well as solving environmental problems, such as managing smart power grids, tracking pollution and predicting potential disasters.
This year Google launched a project known as Google For Startups Accelerator, backing 16 Asia-Pacific organisations applying AI to biodiversity, agriculture, carbon markets and climate resilience. Participants will receive three months of technical support, access to specialist AI models and mentorship.
They include New Zealand’s, 800 Trust and Listening Lab, which is using bioacoustics to monitor biodiversity through sound, while in South Korea TelePIX is converting satellite observations into intelligence for global mangrove monitoring.
There are also a number of projects focused on enabling farmers to become more efficient. Australia’s X-Centric has created portable hardware that is designed to provide immediate geochemical analysis of soil. Indonesia’s Edufarmers is providing smallholder farmers with timely guidance on pests, diseases and weather through commonly used messaging applications.
Other participants in the Accelerator program are focused on the reduction of carbon emissions, including India’s Farmers for Forests, which is using AI-powered drones to measure carbon and biodiversity outcomes from smallholder agroforestry in India.
What this means for companies and investors
Companies are under growing pressure to cut emissions and demonstrate environmental responsibility. Integrating Green AI may provide companies with the opportunity to improve their environmental, social and governance (ESG) outcomes, which in turn could help them to build trust with increasingly environmentally conscious consumers.
Investors are also highly focused on the implications of AI use for ESG. At Uniting Financial Services, our range of ethical managed funds invest according to our Ethical and ESG Policy, which seeks to avoid companies that promote unsustainable use of ecosystems, resulting in land degradation and biodiversity loss. We also direct our investment managers to invest in companies that score well on the management of climate change, environment and waste management, and ethical conduct.
Our managers frequently engage with companies on their operations. Schroders, for example, requires large and medium companies to commit to decarbonise business models towards net zero by around mid-century, as well as conducting and publishing regular climate-scenario analysis and setting carbon emissions targets.
Another of our managers, Janus Henderson, recently engaged with data centre specialist, Airtrunk, to discuss its plans to enable new renewable energy capacity, including a solar farm in Malaysia and a new solar project in New South Wales, to manage its carbon footprint.
What is clear is that AI is entering a new phase, which offers the potential to manage ethical and environmental risks and, with the right oversight, could lead to new and improved investment opportunities. UFS and its managers will continue to watch this space with interest.
For more information on the UFS funds, visit here. The UFS funds are available to wholesale investors only.
- Goldman Sachs: AI to drive 165% increase in data centre power demand by 2030, 2026
Michael Chou - Investment Manager, Uniting Financial Services