Aussie AI sustainability lags well below global averages: Report

Further alignment needed between enterprise AI and sustainability teams.

A recent study has found only 20 percent of Australian businesses currently consider the environmental impact of AI.

This is down from 35 percent the previous year and well down on the global average of 43 percent, according to the third annual Global Sustainability Barometer Study, conducted by Kyndryl, in conjunction with Microsoft.

Erandhi Mendis, social impact, government affairs and policy leader at Kyndryl ANZ, said the way to lift this figure for Australian organisations is to treat AI workloads like any other energy-intensive workload by tracking energy use and emissions, and then reporting performance transparently.

AI’s footprint must become visible and measurable, Mendis said, and Australian organisations must use AI where it drives a clear net environmental benefit.

“Predictive AI can forecast emissions and resource use, and agentic AI can increasingly plan and execute multi-step actions such as improving energy efficiency and streamlining supply chains. The key is to set guardrails and define clear success metrics,” she noted.

A further step is for businesses to embed sustainability into technology decisions and modernisation by ensuring all technology upgrades, including AI, consider environmental sustainability alongside cost, performance and efficiency.

AI’s environmental footprint can also be improved by optimising models and workloads. Doing this means right-sizing models to the task, avoiding unnecessary training and inference, and using AI for intelligent workload optimisation, where it reduces total compute and waste, Mendis added.

Alignment between sustainability and AI teams can be improved

The study found alignment between sustainability and AI teams sits at 62 percent, with just under half of Australian organisations saying technology teams drive environmental outcomes across the organisation.

Sixty-two percent of Australian organisations also now report on environmental sustainability performance, with 58 percent doing so either voluntarily or without public disclosure.

Mendis said the fact 62 percent of AI and sustainability teams are aligned is encouraging, but also noted beyond alignment, organisations should also consider shared accountability or decision rights.

“In Australia, only 22 percent of sustainability leaders hold a formal role in IT governance that influences strategy and investment decisions, which means many organisations still lack the structures that turn alignment into execution,” Mendis said.

Just as importantly, organisations must move from “tracking” to “decision-grade” data.

While 65 percent track environmental metrics centrally, only 33 per cent use that data to guide decisions and optimise performance.

“Alignment improves when teams work from one dataset tied to clear actions,” Mendis ended.