The artificial intelligence (AI) goldrush is fully upon us. Everywhere we turn, helpful little voices chirp up, unprompted, asking if we want help, if we want to ask a question, or summarising what we were just about to discover for ourselves.
It’s now impossible to search for something online without being told all about it – and then having to double check whether it’s true.
In the business world, the hype is only getting louder, and HR service providers have leapt on board. Of the 16 leading HR software platforms we reviewed, all had integrated AI products. But where does the other shoe drop on this new industrial revolution?
AI’s impact on the environment
Demand for AI is soaring. We may be familiar with just a few of the big names, like ChatGPT developer OpenAI, Meta, Microsoft and Google, but in 2024, hundreds of new large-scale models were trained and released. Much like existing ‘cloud’ systems, these models operate from data centres – factories of the next industrial revolution. Built of banks upon banks of advanced computer chips, these data centres are quickly becoming one of the planet’s biggest consumers of electricity.
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Before you ever use one, it takes vast quantities of power to train an AI model. The smarter you want it to be, the more complicated the computations will be – and the more data it needs to burn through. It cost OpenAI nearly $100 million to train its ChatGPT-4 model, with the firm estimated to have consumed as much as 62,000MWh of electricity over nearly 100 days of training – enough to supply around 20,000 UK homes’ electricity needs for a year, according to energy watchdog Ofgem figures.
Even once it’s trained, AI is a major power draw. One Google search takes enough electricity to power a 60W lightbulb for 17 seconds. A single query to ChatGPT4 could power it for four and a quarter minutes. Ask a generative AI to produce a picture, and it will power that same lightbulb for anything from 85 minutes to seven hours, according to estimates from the Allen Institute for AI, a US-based non-profit.
“There is going to be a significant increase in energy demand,” explains Noman Bashir, computing and climate impact fellow at the Massachusetts Institute of Technology (MIT), and a prominent author on the emerging science behind AI’s impact on the environment. “Data centres for AI are around six to 10 times more power-intensive than a traditional data centre, so these big data centres need more and more power,” Bashir says.
“In most locations, the grid may not be able to match that new power demand. In a lot of places, they’re bringing back fossil-fuel generators to bring data centres online – either delaying the decommissioning of fossil-fuel plants or bringing them back.”
By 2026, the International Energy Agency estimates that electricity usage by data centres will swell from around 460 terawatt hours in 2022 to between 650 and 1,050TWh in 2026 – equivalent, respectively, to the energy demands of Sweden or Germany. Add to the bargain the fact that data centres are wearing out local power grids, draining aquifers around the world to cool power-hungry chips, and the huge amounts of power, water and raw materials required to manufacture the chips themselves, and a familiar picture emerges. It seems the next great leap forward for humanity, once again, comes at the expense of the planet.
The unseen cost
Acknowledging the cost to innovation is the first step towards truly understanding how we can profit from it sustainably. But the issue with AI’s ecological impact is that most of us hear nothing about it: right now, we’re blinded by AI’s potential.
“Decision-makers have been in an initial phase where they want to capitalise on the market,” Bashir explains. “If I tell people that my products use AI, it seems more attractive: rather than actually quantifying the benefits, just use the name ‘AI’ to get more market share.”
For the big AI suppliers, it’s a race for domination over the market – whatever the cost. Even Google and Microsoft – which both hold strong public pledges towards decarbonisation – have both seen their emissions rocket as they scramble for data centres. In May 2024, Microsoft said its emissions had grown 29% since 2020, thanks to the construction of more AI data centres specifically “designed and optimised to support AI workloads”. Google’s emissions have likewise climbed 48% since 2019.
And while there has been plenty of chatter over the potential risks of AI, sustainability has been lost among other pressing concerns about over-hasty adoption. “There is such a focus on people understanding AI, or knowing about the governance, regulation and impact of AI on jobs, that it’s a stronger voice than anyone thinking about how AI will impact their digital carbon footprint,” says James Devine, director and UK head of healthcare workforce practice at KPMG.
“People aren’t talking about it at all. At the moment, the big push for AI is on whether it’s more productive: does it help the hospital see more patients, for example? If the answer’s yes, it’s a big tick, and we get on with implementation.”
So far, we’ve dealt a lot with AI’s damaging impact on the environment, but as Devine points out, AI can also be used to drive massive productivity gains. In certain circumstances, it can drive significant reductions in emissions too, which is a sentiment backed by Costi Perricos, partner and GenAI leader at Deloitte.
“Technology, when used wisely, can be a powerful force for sustainability,” says Perricos. “AI, data analytics and smart systems are already helping us optimise resource use, reduce waste and integrate renewables more effectively.
“Of course, efficiency doesn’t always equal sustainability; sometimes it just leads to greater consumption. But when deployed with environmental goals in mind, technology has the potential to reshape industries and ecosystems for the better.”
In many organisations, however – especially those with fewer direct emissions – leaders simply haven’t considered how AI adoption might affect their decarbonisation plans, for better or worse.
Matt Gitsham, professor of sustainable development and director of the Ashridge Centre for Business and Sustainability at Hult International Business School, has spent his career examining ethical business leadership. “There are lots of conversations going on around sustainability and net-zero, and conversations going on around AI, but they tend to be – as is nature of things – separate conversations,” he explains.
“The conversation around AI is mostly about opportunity. There’s quite a big conversation around the risks as well, but decarbonisation maybe just comes down a few pegs, and is left out altogether, because there’s so much else to talk about.”
Why is this a concern for HR leaders?
Any knowledge gap in an organisation should set HR’s alarm bells ringing. But one that suggests a lack of awareness of two of this decade’s most significant macro changes – and that these two challenges are being considered in silos – should concern any strategic HR lead.
The problem is not so much with leaders but with the changing landscape of both AI and sustainability work. Employers’ sustainability work used to be largely limited to in-house changes like efficient lighting, adding solar panels or reducing in-house printing, an approach reinforced by legislation that prioritised the reduction of Scope 1 and Scope 2 emissions.
The real meat of decarbonisation, however, is in an organisation’s value chain. The government’s estimates show that Scope 3 emissions typically account for around 80%-95% of UK organisations’ total carbon footprint. Though disclosure is currently almost entirely voluntary, increasing attention is being brought to bear on these emissions.
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AI – and any other cloud-based digital infrastructure – falls under Scope 3. IT currently accounts for around 2%-4% of global emissions, compared with aviation’s total 2% share.
Tackling Scope 3 emissions requires a complicated mix of engaging with suppliers – fundamentally a core leadership skill – and collective action across an organisation to use resources responsibly. Both are exactly the kind of requirements HR is suited to deliver.
“It’s a common starting point to think that decarbonisation is a technical issue that you can get your head around and then fix with a small group of people, whether an in-house team or external sustainability consultants,” says Gitsham. You think: ‘Figure out what to do, set a few goals, tell everyone, and then it happens.’
“Well, organisations get to that point, and it doesn’t happen. Round one doesn’t get you very far. It’s the second part that’s core: wider investment in helping everyone understand what it’s about, getting them on board, building the shared knowledge base and language, and investing in the skills to achieve it. That’s where HR’s core contribution is.”
A strategic mindset
If HR has proved anything over the past five to 10 years, it’s that it can handle change, and handle it well. Remote working, the Covid-19 pandemic, changing expectations over flexibility, wellbeing, and the cost of living crisis; work is changing rapidly: AI and decarbonisation are only going to change it further – and perhaps even faster.
“It doesn’t get said enough: climate change is a collective challenge, and we’re all in big trouble,” Gitsham adds.
Decarbonisation is a legal requirement – the UK is legally bound to meet net-zero by 2050 – and structural change through AI is coming whether organisations want it or not.
“We might assume it’s a job for governments to lead and organise, but they can’t do it on their own. You need every kind of institution to be involved, playing a leadership role, if we’re going to collectively tackle this collective problem,” he says.
“Stakeholder pressures may wax and wane depending on what’s going on in the world – you’ve seen it with the Trump administration – but they are not going away. That’s where HR comes in: organisations develop strategies to respond to that set of pressures, and integrate them into their own corporate strategies. If the organisation is going to meet these new goals, then that has an implication for people’s need to understand the issues, and their skills to execute on them.”
HR must build up its strategic capability, according to Abigail Wilmore, founder of HR consultancy People Flow. “Sometimes it’s HR’s role to see the ecosystem [of the organisation] as a whole, and see those silos,” she says. “The CEO of a company can do that, but they often have other pressures, especially from the commercial side.
“These strategic issues are so vast. HR now needs to upskill in areas that have been part of HR for three minutes, yet we hadn’t even heard of them three to five years ago,” she adds.
We’ve heard plenty enough about the need for HR to upskill itself. But it’s easy for AI and sustainability to get lost as just two of 48 core knowledge areas for the profession on the CIPD’s profession map. “Looking three years ahead into the future, it’s hard to know where AI will entirely or partially take over. HR 100% needs to be upskilled massively, but the sad fact right now is that a lot of businesses are scaling back, and HR gets pulled down into the operational side of things; what we’re talking about is strategic work, and it requires a birds-eye view over things.”
It’s an incredible challenge. But the stakes are too high not to meet it.
How HR can up its sustainability game
Armed with the knowledge that AI has unintended consequences, and our internet and emails are warming the planet, we pull the emergency brake, right? Stop the train; we’re all going off to live in the woods? Of course not.
Digital transformation – and its consequential effects on organisational and job design, and talent strategy, to name a few key areas – should now be a core capability for HR functions. Sustainability is just one new variable among many.
The first port of call: get your own house in order. “You have to be really, really credible,” Wilmore says. “Your operations need to be tip-top, otherwise, no matter how upskilled you are, you’re just not going to be in the conversation.”
Then, you need to familiarise yourself with the language of decarbonisation. Take a look at your own processes and digital tools, and ask your suppliers what they are doing to support your decarbonisation journey.
“I am a strong believer in the power of collaboration to achieve the best results,” says Lorena Dellagiovanna, chief sustainability officer, chief HR officer and chief diversity equity and inclusion officer for Japanese electronics firm Hitachi. “For organisations to bring about real change in their own businesses – and in turn have a positive, sustainable impact on society – open collaboration with others is imperative.”
Hitachi, she explains, works with more than 30,000 procurement partners form more than 60 countries, to collectively achieve its goal of reaching carbon neutrality across its value chain by 2050. “This work involves selective benchmarking and support for partners to improve or take corrective action where required,” she says, emphasising the importance of setting out clear sustainability KPIs."
For HR professionals, this might mean benchmarking different AI-enabled HR information systems (HRIS)’s sustainability strategies before adopting them as a partner, or working with a pension provider to better understand green pension options. Don’t worry about a lack of expertise in digital sustainability, either, that’s what the experts are for, Dellagiovanna adds.
“Seek advice. There are so many new technologies emerging at breakneck speed that it is almost impossible for organisations to make decisions without expert guidance. The sheer volume of choices, from AI-driven automation to sustainable cloud solutions, can be overwhelming. Without expert guidance, companies risk investing in technologies that may not align with their long-term goals,” she says.
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“When seeking advice, be challenging and critical. Make sure the digital tools you use follow your principles: are they transparent? Is there a methodology to measure its impact? Are they inclusive, ethical, safe, secure, trustworthy? We need technology that works for the people and the planet, not against it.”
Once you are confident in understanding your own patch, it’s time to learn to get involved in the wider organisation, says Gitsham. “Competency frameworks for leadership are important. Think about the mindsets, knowledge and skills that senior leaders need to work together effectively on these topics.”
Leaders must be able to lead change in a wider ecosystem around the organisation, and influence peers, Gitsham suggests. “You’re not just leading knowledge in your team, or in part of the organisation, you need to collaborate with your customers, suppliers, and maybe even competitors.”
Equally important as leaders’ capabilities are those embedded throughout the organisation. “If you invest with senior leaders and get them on board, that can unlock resources for investing in wider populations in the organisation,” Gitsham adds.
“To try and do one without the other is problematic. If you focus all your energy on engaging the wider population – and you need that behaviour shift to happen at a wide level – but you haven’t engaged with senior leaders, you risk people being met by a brick wall when they try to engage with leadership. By the same token, if you just engage with senior leadership and haven’t done much to shift opinion more broadly in the organisation, you risk the same thing.”
Action gets rewards
HR stands to gain much from finding itself as a strategic enabler of decarbonisation. If people in your organisation struggle to make the shift, they may be grateful for the help.
In her “fairly unique” position as chief of HR, sustainability, and DEI at Hitachi, Dellagiovanna has seen real success in giving others throughout the organisation the confidence to succeed through helping unify the business’ work with long-term goals like net zero. “Mindset is usually the biggest barrier when making any systemic change,” she says.
“When people realise that acting sustainably should not be viewed as a business cost or a duty to be complied with, but as a value creator for both business and for the environment, it is easier to overcome the initial barriers and start real transformation. By implementing the right carbon reduction strategies and long-term planning, organisations can achieve significant benefits, not only in terms of sustainability but also in operational efficiency, regulatory compliance, and long-term business resilience.”
Recruitment and retention have long been linked to environmental causes. According to 2024 figures from TotalJobs, 30% of UK workers would change jobs if they discovered their employer was acting unsustainably. By educating workers about their organisation’s sustainability progress without using jargon, companies are less likely to be seen as ‘greenwashers’, an impression that turns off 73% of potential applicants.
For Devine, HR’s key impact will be in its capability for organisational design. He proposes that HR functions introduce a sustainability impact assessment when introducing policies or making changes, like the Equality Act’s equality impact assessments.
“Particularly when it comes to AI, there’s going to be such a focus on new roles, new skills and new capabilities that will be required in the next five to 10 years. HR could have a role in assessing the sustainability impact of that change,” he muses. “At the moment, I can’t imagine anybody’s even begun to think about it.”
Targeted environmental learning and development (L&D) can also make a real impact on the bottom line. If your company provides an AI product – and your salespeople can confidently explain what you are doing to mitigate its climate impact – then that is an immediate differentiator in a market with little transparency over its environmental impact.
Likewise, says Gitsham, any product that can help customers meet decarbonisation goals will benefit from green-conscious sales teams. “They need sales teams who ‘get’ that, and know how to talk about it: we’re seeing a lot of organisations developing L&D for those teams,” he says.
“It’s really common to think that either you do the right thing, or you do good business. But often with this topic, doing the right thing is actually working out how to help the organisation make money out of [sustainability].”
Perhaps the most important long-term benefit for HR will be to its own stature within the organisation. “Any time an HR leader is helping colleagues think about how they could work together to address collective challenge, that is going to be something that increases the respect HR gets from its peers,” Gitsham continues. “Being knowledgeable, having a valuable contribution to make to these collective issues is something that reflects well – and only adds another string to the bow of the HR director.”
Devine agrees: in his view, the sooner HR takes hold of key strategic issues, the better. Especially if we are able to harness automation – AI, even – in service of greater goals.
“If we free HR up from all this transactional work, then that creates new purpose for HR,” says Devine. “Sometimes HR needs to push boundaries – and enter the brave new world.”
This article was published in the March/April 2025 edition of HR magazine.
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