AI’s Role in Sustainable Business Development
Ever since the formal conception of artificial intelligence (AI) at a 1956 conference in Dartmouth, New Hampshire, humanity’s imaginings of AI technologies have spun visions of hopeful futures and potentially nightmarish scenarios. The 2014 science fiction film Ex Machina paints a concept of a future AI that has become both far too intelligent and far too dangerous. The film’s namesake derives from the Ancient Greek phrase “Deus Ex Machina,” meaning “god from the machine.” In Ancient Greek theatre, actors playing gods would be unexpectedly carried onto stage by a machine to save a seemingly hopeless situation at the final possible moment. Ex Machina’s exclusion of the word “Deus” indicates a machine without a god.
AI is increasingly being considered a deus ex machina that will, as our time to address the climate crisis wanes, single handedly save businesses and humanity from the perils of rampant sustainability issues.
In the Anthropocene, the rapid rise of ChatGPT and other AI technologies are fundamentally transforming the business playing field. Yet potential risks associated with AI need to be incorporated into emerging business strategies, enabling companies to catalyse AI’s power to effectively lead to sustainability, efficiency, and profitability while preserving the human element of decision-making.
Titles of popular media articles exploring the intersection of AI and sustainable development — such as “Artificial Intelligence — A Game Changer for Climate Change and the Environment,” “How AI Is Helping Solve Climate Change,” and “How Artificial Intelligence Can Power Climate Change Strategy” — indicate a burgeoning conception of AI as a form of deus ex machina for sustainability. While decidedly of a pollyanna persuasion, these articles point to the possibilities for sustainable business development now emerging through this technology. Albeit serious risks still run rampant, it is nonetheless important to acknowledge AI’s immense potential to facilitate sustainable business transformation.
It has been estimated that applying AI to environmental causes could contribute up to $5.2 trillion USD to the global economy by 2030, and catalysing the power of AI for sustainable purposes has already resulted in several sustainable developments in energy, design and production, agriculture, transportation, and a variety of other sectors. Such developments don’t just have the capacity to achieve ecological sustainability; they also help businesses increase profits and avoid costs. The Capgemini Research Institute has estimated, for example, that AI will improve power efficiency by 15% in the next three to five years and help companies in a plethora of industries fulfil up to 45% of Paris Agreement targets by 2030.
AI’s ability to rapidly and holistically analyse and provide potential solutions to problems also makes it invaluable to the design of circular systems. Whether working with biological or technical materials, AI’s ability to accurately determine supply and demand, design new, sustainable materials, improve the longevity of products, and structurally improve waste management systems can help induce circularity across industries. According to McKinsey, using AI to design out waste in a circular economy for food could potentially unlock $127 billion USD in value per year by 2030. The equivalent value for AI-driven circularity in the consumer electronics industry is estimated up to $90 billion USD per year by 2030.
Elin Enfors-Kautsky, PhD and founder of Prosperous Planet, offers the following regarding the use of AI to address the complexity of reducing carbon emissions:
Reducing carbon emissions throughout the value chain is a highly complex process. Whose responsibility starts and ends where, and how does that overlap or not with other companies’ responsibilities? The current way this issue is approached leaves a lot of emissions in between, emissions that are no one’s area of responsibility, and that happens because the global system of emitting actors is so complex. There is no way for us as individuals to grasp this complexity, and I think in such cases we can use AI to help us come up with better systems for attributing emissions to specific entities.
With the multitude of tantalising benefits presented by the use of AI, it’s no surprise that half of respondents in McKinsey’s The state of AI in 2022 report indicate that their organisations have already begun utilising AI in at least one business function. However, considering this rapid development and adoption, how can organisations avoid the characterization of AI as a deus ex machina?
Moreover, what principles and ethics shall serve as the “god” to one of the most powerful technologies of the 21st century?
This is especially important for business leaders to consider as discourses and frameworks being created to ensure AI is used for ethical purposes often do not include environmental considerations, as is evidenced by the following (otherwise useful) models created by the Berkman Klein Center and Deloitte.
Robert Kautsky, owner and founding partner of environmental science and sustainability communications agency Azote, is currently experiencing an increased interest in AI in several different client projects. Kautsky offers, “When you’re trying to optimise things through data, you often lose a lot of the human aspects or the holistic side to business, and that can lead to bad outcomes for people even if you increase your profitability.” Such optimisation can lead to negative environmental impacts, too; “If a store is selling products that are bad for the environment, selling 2% more of them is, of course, even worse, although reducing losses by 20% is probably a gain. So, it’s a lot about the underlying values that go into using the technology.”
AI itself is not an inherently sustainable invention and requires ethical, holistic direction to be utilised for genuinely sustainable aims. Even AI’s need for servers and energy to enable its data processing can be highly carbon- and resource-intensive. What’s more, AI can also be harnessed to optimise extractive business models, accelerating ecological degradation.
So, how do companies manage these risks and catalyse the power of AI for purposes that not only increase profits but also contribute effective solutions to social-ecological challenges? Kautsky stresses the significance of adopting a systemic approach to AI to ensure both of these goals are attained:
If we only feed an AI system business data, supply chain data, and maybe climate data but not global inequality data, perceived lifestyle quality data, and so on, it will not provide you insights that are holistic. You should look at what the different AI engines are good at and what they’re bad at, and then you should look at the data bias. People must understand both the limitations of AI and the limitations of current business models. Many companies only look to the next quarter or year, but we now have types of transformations that will typically take multiple years to achieve or even longer, and the sustainability transition itself is a matter of generations. AI is basically a more advanced version of Excel, but we would never talk about how Excel will solve our world problems or how Excel can be valuable for sustainability. It just depends on how you use the columns.
Enfors-Kautsky’s analysis points to an incorporation of AI in business that both preserves the human element of decision-making and underscores the importance of ethical guidelines. She argues,
Artificial intelligence does not replace human intelligence. Once we have established an ethical purpose for AI, we can use it to help us perform highly complex computations. It can help us optimise systems and make us more efficient in reducing climate emissions, but it still doesn’t replace our thinking. New technological innovations don’t exist in a vacuum — we need a society that establishes a positive purpose for them. I don’t see that as anything radically different than ethical considerations that we have around medical technology and other innovations. We have to embed AI in a society that is capable of making wise decisions, that uses technology to advance society — not undermine our own development.
As organisations in the Anthropocene begin to adopt AI strategies and anticipate future developments of AI technologies, leaders must remember that the business world is not an Ancient Greek play. The emergence of AI can, in many ways, seem like the deus ex machina for sustainability that we’ve been waiting for, but without the guidance of this technology by human intelligence, systems thinking, and ethical considerations, we will only be driving a machine without a god.
By first establishing ambitious purposes, ethics, and sustainability within the decisions of management teams, we can wisely look to AI as a tool rather than a prophet.
Through this approach, both profitability and sustainability can be achieved.
Keep a look out for the next article in our series on AI where we will dive into the biggest business risks associated with AI’s use for sustainable development. In the meantime, follow us on LinkedIn and visit our website to learn more about the Prosperous Planet approach to business development in the Anthropocene.
