AI isn't green but it can still help sustainability challenges
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AI is not inherently good or bad. Like any tool, its impact depends on how it’s deployed, regulated and improved over time. Used well, it has the potential to help us do more with less.
This year, there is going to be a sharp focus on how artificial intelligence (AI) and sustainability can work efficiently together. With the rapid development of AI reshaping industries and economies, concerns regarding water and power usage tied to data centres have taken centre stage, particularly as Sustainability Week approaches in London from 2 to 4 March.
David Harrison, fund manager, Rathbone Greenbank Global Sustainability Fund, said: “AI is often hailed as a revolutionary force, compelling stakeholders across the board to re-evaluate operational dynamics. While AI promises enhanced efficiency and cost-effectiveness, it simultaneously escalates demand for data centres, which are known for their significant energy consumption and water requirements. There have already been countless reports of water stress, rising power prices and housing projects delayed because infrastructure capacity has been gobbled up by data centres.
“However, this narrative is not entirely bleak. AI has also driven advancements in energy efficiency, reducing power consumption per unit of computation by as much as 30% to 50%. Notably, major tech companies are increasingly entering long-term agreements for clean energy, with the big four AI hyperscalers: Microsoft (which we own in our fund), Alphabet, Meta, and Apple (which we do not own), signing around half of the 56GW of the corporate renewable energy contracts in 2025. These multi-decade agreements are crucial for backing new power projects, as they lock in sales that can be leveraged to gain financing to install new plants. Last year, the US built more power generators and storage than in any other of the past 20 years. Renewables accounted for about 60% of that, mostly solar.
“Data centre sustainability is one of our priorities for company engagement. The Rathbone Greenbank Global Sustainability Fund is increasingly focusing on companies that provide essential infrastructure for data centres, such as UK engineering conglomerate, Halma, Belimo in Switzerland which installs HVAC systems in data centres to keep the temperature right, and cabling and connectors supplier, Amphenol. These firms are not only enhancing energy efficiency but are also instrumental in innovating sustainable practices within the industry. Halma, for instance, combines expertise in water treatment and advanced sensor technologies to address leakage and improve water management systems.”
As the political landscape surrounding AI and data centres continues to evolve, it is crucial for companies to proactively engage in sustainability dialogues. Addressing the environmental impacts of data centre expansion is not just a regulatory necessity but also a strategic opportunity to showcase commitment to sustainable practices.
Harrison added: “In 2026, we must confront the balance between expanding AI capabilities and managing our finite resources of water and power. Investors and companies alike need to engage in transparent discussions about sustainability, demonstrating how they are contributing to new clean energy projects that benefit both businesses and the planet."
