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Keeping you in-the-know on environmental, social and governance developments

One thing is for sure – AI permeates every business conversation, article and advertisement at the moment. AI had a huge presence at GreenBiz24 – in terms of vendors, panel topics and reception discussions. It is touted as an unstoppable force with inconceivable benefits for data management, reporting efficiency, supplier visibility and information/trend tracking. But there are also questions about its downsides which include “hallucinations,” replacing jobs and energy consumption which can conflict with corporate ESG goals and commitments.

Forbes reports that

“By some accounts, the environmental footprint needed to train OpenAI’s GPT-3 was the equivalent of ‘driving a car to the moon and back‘ – 480,000 miles – and evaporating 700,000 liters of freshwater. Amplify that by the number of queries that are being pumped through LLMs like ChatGPT and the necessary computation power needed and the ecological toll becomes clear. However, there’s a fine line that companies can walk to leverage AI and still uphold their ESG commitments.”

The article offers the following considerations in the ESG context when looking at implementing AI:

  • Avoid the temptation to blindly rush into all things AI. “… companies should [not] indeterminately chase every alluring and ambitious AI concept. It’s essential to weigh the value of AI within specific scenarios. Consider the environmental footprint AI might have in much the same way you would assess the caloric content and nutritional value of the foods in your diet. Being thoughtful about when to deploy AI means embracing the discipline of rigorously analyzing each potential application and balancing the effort and resources required for AI against the expected benefits. Does the computation power needed justify the ecological impact?”
  • Determine environmental aspects most relevant to your business. “Building on this, forward-thinking companies must include AI usage when thinking of the ‘E’ in ESG. Determine how influential that aspect is to your ESG strategy and weigh the impact of increased AI usage.”
  • Communicate how you balance ESG and AI. “It’s vital to communicate clearly how you’re approaching ESG and AI and that key stakeholders grasp the importance of adhering to those standards. Look to leading companies like Schneider Electric, FedEx, Columbia Sportswear and Coca-Cola. These companies exemplify how to lead from the front and work with their network partners to enhance ESG compliance, including AI considerations.”
  • Be smart and thoughtful about how and when to use AI. “Companies must be savvier and more conscious when it comes to how, where and to what extent their AI initiatives will shape their future. It’s essential to remember that although AI is an incredibly potent tool, it carries inherent environmental implications. Balancing AI’s capabilities with responsible, sustainable practices isn’t just beneficial but necessary for true progress.”

Of course, the article focuses on the environmental impact of AI, but it is becoming more evident there is a human/social cost as well in terms of job loss. It is easy to be caught up in the hype and focus only on claims of benefits. But nothing is free – benefits come at a cost. Just keep that in mind – and in perspective with regard to your company’s ESG goals and commitments.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile