Over half of companies globally report that the use of AI has a major impact on key areas of their decarbonization efforts, such as emissions measurement and reporting, according to a new survey released by Boston Consulting Group (BCG), and AI usage was also found to be a significant driver of companies’ ability to derive substantial sustainability-related financial benefits, the report found.

Despite the availability of new tools and the apparent financial benefits, however, the survey also found little progress by companies over the past year in their decarbonization initiatives.

For the report, the fourth annual CO2 AI + BCG Carbon Emissions Survey, BCG and enterprise sustainability management platform CO2 AI surveyed 1,864 executives with responsibility for emissions measurement, reporting and reduction initiatives at companies with at least 1,000 employees and annual revenues ranging from $100 million to over $20 billion, across 16 industries and 26 countries.

Relative to prior surveys, the report found that corporate progress on advancing decarbonization initiatives has largely stalled over the past year, with only 9% of respondents reporting that their companies comprehensively report emissions across Scopes 1, 2 and 3, down from 10% in 2023, only 16% have set emissions reduction targets across all scopes (vs 19% last year), and only 11% achieving emissions reductions in line with their ambitions (compared with 14% last year).

The slow progress, however, comes despite the survey’s findings that companies are experiencing substantial financial benefits from their decarbonization efforts. According to the study, more than two thirds of companies reported annual net decarbonization benefits worth at least 3% of sales – including 25% that reported benefits worth at least 7% of sales, or an average of approximately $200 million. Cost savings were among the most significant drivers of benefits reported, deriving from factors including efficiency, waste reduction, rationalization of materials or footprint, and renewable energy use, according to BCG.

Hubertus Meinecke, Global Leader of Climate and Sustainability at BCG, and a coauthor of the study, said:

“This year’s survey highlights the substantial rewards some companies are reaping from decarbonization, including significant financial gains, enhanced reputations, and operational efficiencies.”

The report also assessed the ties between actions companies are taking and the realization of financial benefits from decarbonization, with the strongest link revealed to be the use of artificial intelligence, with companies utilizing AI in their emissions reduction efforts found to be 4.5 times more likely to be included amongst those seeing net benefits equal to at least 7% of annual revenues.

Other strong benefit drivers included the calculation of product-level emissions, with companies reporting doing so 4x more likely to be in the top benefits group, followed by the development of a climate transition plan (2.9x more likely), validated emissions reduction target setting (1.9x), reporting all materials GHG emissions scopes (1.5x) and measurement of all emissions scopes (1.6x).

Diana Dimitrova, BCG Managing Partner and Director, and study coauthor, said:

“Too few companies are seizing the financial gains offered from decarbonization. By mastering essential foundational actions like measurement, reporting, target setting, and taking advanced steps toward sustainability, these companies can become more efficient, more profitable, and demonstrate a stronger commitment to a greener future.”

Key drivers of benefit from the use of AI for sustainability initiatives included increased efficiency through automation of tasks, allowing companies to focus on activities such as emissions reduction and value capture, according to the report.

Companies appear to recognize the value of AI to their decarbonization efforts, with more than half of respondents reporting that AI has a “major” or “extremely significant” impact in areas including emissions measurement (55%), emissions reporting (53%), planning for abatement opportunities (51%), and business, process and product design sustainability (51%). Looking forward, respondents also reported expectations that AI will help in areas including identifying opportunities to bolster energy efficiency and in collecting and analyzing emissions data.

While acknowledging the benefits, respondents also highlighted several key barriers preventing the use of AI to support their decarbonization efforts, with the high cost of AI-driven solutions as the most cited issue, reported by 34%, followed by difficulty in training and upskilling at 30%.

Charlotte Degot, CEO and founder of CO2 AI and a coauthor of the report, said:

“The window for companies to increase ambition and take decisive action to limit global warming to 1.5°C is rapidly narrowing, but AI has the potential to be a game changer, empowering businesses to reduce emissions and make meaningful strides toward mitigating climate change. Our research shows the need for companies to double down on using AI responsibly to make sure they can deliver their climate goals and bottom-line business targets.”

Click here to access the report.