By Ira Srivastava
1. The realities of AI resource consumption. Washington Post reporters and University of California researchers collaborated to determine the impact of a single 100-word email written using ChatGPT-4. A 100-word email uses about 500 ml or 1 bottle of water. If 10% of working Americans sent a ChatGPT generated email once a week for a year, it would use over 435 million litres of water. In one town near Portland, Oregon, Google revealed that its data centres were using almost 25% of the town’s water. Additionally, the electricity used to generate one email could power 14 light bulbs for an hour. These figures also fail to take into account how much electricity and water is used when these AI models are being trained. For example, “Microsoft’s data centre used 700,000 litres of water while training GPT-3”.
2. The State of 2024 U.S. Sustainability Reports. The Harvard Law School Forum on Corporate Governance conducts an annual review of sustainability reports from S&P 500 companies. Here are some takeaways from the 2024 report.
- ‘Sustainability’ was included in the titles of 39% of the 250 reports analysed. ESG only appeared in 24% of report titles, but was still referenced within the reports.
- Reports are increasing in length and becoming more in depth, with 27% of companies conducting dual materiality assessments.
- Despite backlash, 94% of reports contained the term ‘DEI’. 21% of reports mentioned sustainable and responsible AI usage.
- 32% of reports named CEOs as “ultimately responsible for company ESG strategies”.
3. Can DEI strategies withstand the backlash? Diversity, equity, and inclusion has become the most recent ESG topic to come under fire. With the United States Supreme Court ending affirmative action, companies changing their DEI practices, and increased vocal opposition to DEI from consumers, organisations may be unsure how to respond. However, a survey published at the end of 2023 found that 63% of surveyed chief HR officers were “actively seeking to further diversify their workforce”. Similar to the trend of using the term ‘sustainability’ instead of ‘ESG’, many companies are choosing to simply rename these programs, believing diversity of thought and experience is invaluable.
4. Learning from early adopters of the TNFD. The Taskforce on Nature-related Financial Disclosures released its inaugural framework in 2023, with 320 organisations signing up as early adopters. Almost a third of those organisations are in the financial sector. Senior executives in the finance sector feel that adopting the TNFD early rather than waiting for it to become mandated means that companies can begin “developing… nature reporting… while you still can’t go wrong”. Being an early mover with the TNFD means companies can take their time to become more familiar with biodiversity and nature topics rather than rushing the process if and when it becomes mandatory. The TNFD website has a number of resources that organisations can use as jumping off points in their nature disclosure journey.
5. Microsoft is leaning into nuclear energy. Microsoft is just one of many tech companies facing soaring emissions due to AI training and development. To address this, Microsoft will recommission Three Mile Island, a nuclear power plant in Pennsylvania that was shut down in 2019. Microsoft will fund Constellation Energy’s restoration of the reactor so that it can use this clean energy to power energy-guzzling data centres. Nuclear power remains one of the safest and least environmentally damaging sources of energy. Hundreds of workers die in coal mines every year compared to nuclear energy production where one person dies on average every 25 years.
Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.