Nearly nine out of ten business executives plan to increase investments in technology to advance their companies’ sustainability efforts over the next year, as most view sustainability-related IT investments as a growth opportunity, and a significant majority believe that AI will have a positive impact on their progress towards their sustainability goals, yet only half currently express confidence in their current data capabilities to track sustainability progress, according to a new survey released by IBM.

For the study, IBM’s State of Sustainability Readiness Report 2024, IBM commissioned a survey by Morning Consult of nearly 2,800 business leaders, including Vice Presidents, Directors, and C-suite executives, across 15 industries and 9 countries.

Overall, the survey found that 88% of executives report that they plan to increase investment in IT for sustainability over the next 12 months. Notably, the key reasons cited by respondents for increasing IT sustainability focused primarily on operational and organizational objectives, with brand reputation as the top driver at 57%, followed by energy cost (54%) and business resilience (52%), with regulatory pressure trailing at only 42%.

The report examined the most challenging sustainability issues facing companies, with respondents citing climate risk to operations and assets (31%), energy use (31%) and availability of skilled staff (30%) as within their top 3 sustainability challenges, followed by measurement and analytics at 26%.

Only around half of executives said that they feel fully prepared to deal with these challenges, according to the survey. Data was found to be among the key issues impacting companies’ ability to address sustainability challenges, with 50% of executives reporting that their data to measure sustainability KPIs is not yet mature.

Kendra DeKeyrel, VP, ESG & Asset Management Products Leader at IBM, said:

“Whether organizations are looking to begin their sustainability journey or already have experience in the matter, collecting and accurately classifying their data is critical to develop more sustainable practices. This research shows that business leaders understand the importance of a data-driven approach to sustainability – and are willing to invest in technology to accelerate this process.”

As companies look to increase their investments in sustainability-related technology, the survey found that the vast majority executives are confident in the potential for AI to support their sustainability efforts. According to the report, 90% of executives said that AI will have a positive, or very positive, impact on achieving sustainability goals.

While the executives are overwhelmingly positive on the impact of AI, the report found that less than half (44%) are currently actively using AI for sustainability, although this proportion is likely to increase, with another 32% planning to implement AI solutions for sustainability soon.

The report found that top executives were more confident in their outlook for the impact of AI, with 51% of C-suite respondents reporting anticipating that AI will “very positively” impact the achievement of sustainability goals, compared to only 39% of Vice Presidents and Directors. Similarly, while 47% of C-suite respondents claimed that AI is actively used for sustainability efforts, only 37% of VPs and Directors agreed.

The perception gap between executives extended to other sustainability aspects as well, with 55% of C-suite executives confident in their organizations’ preparation to handle climate-related financial risk, compared with 42% of other executives, and 51% of C-suite confident on sustainability related supply chain risks, compared with 42% of other executives. Similarly, 67% of C-suite respondents described their organizations’ climate resilience efforts as proactive, compared with only 56% of VPs and Directors.

Christina Shim, Chief Sustainability Officer at IBM, said:

“Businesses see huge potential for AI to boost both their sustainability efforts and their bottom line, and it is exciting to see those incentives aligned. Leaders should stay thoughtful about minimizing environmental impacts while adopting AI, but the data shows a lot of opportunity for progress on both sustainability and costs.”

Click here to access the survey.