Australian firms to boost IT investment in sustainability efforts

IBM has released its first State of Sustainability Readiness Report 2024, indicating that a significant portion of Australian business leaders intends to increase investments in IT for sustainability initiatives in the coming year.

The recently published report has highlighted that 93% of surveyed leaders in Australia are planning to boost their sustainability-focused IT investments. This interest appears to be driven by the pressing local challenges related to waste, pollution, and climate risk, which are identified as the most challenging sustainability issues to address.

IBM's report points to brand reputation as the primary motivator for businesses investing in sustainable IT practices, as cited by 57% of respondents. Following closely is the need for access to capital and markets, which was noted by 52% of the business leaders.

Ravi Kumar Mandalika, IBM Consulting Australia's Energy & Utilities Industry Leader, commented on the report's findings: "AI can streamline data collection, assist sustainability leaders in understanding environmental risks, and support informed decision-making through clearer regulatory navigation." He emphasised the role of AI, stating, "The task ahead is for business leaders to maximise AI's value—delivering results that clients need, all while minimising costs and environmental impacts."

The report also shows that while there is optimism about AI's role in achieving sustainability goals, with 94% of Australian executives believing in its positive impact, there is still scant usage of AI in practice. Half of the Australian organisations have yet to deploy AI for sustainability, and only 36% plan to incorporate it into their efforts soon.

To responsibly harness AI, companies are urged to consider its energy demands and invest in energy-efficient practices. Such efforts include optimising data processing locations and utilising open-source collaborations to mitigate AI's environmental footprint while enhancing efficiency and cost-effectiveness.

There is a growing interest in integrating AI into sustainable operations. However, organizations are confronted with the challenge of finding skilled AI talent, which remains a global issue amidst current labour shortages.

On the global stage, measuring sustainability remains a challenge. Leaders have highlighted resource efficiency, renewable energy consumption, and recycling as core KPIs for sustainability outcomes. Yet 50% of business leaders admit their data for measuring these indicators lacks maturity, complicating the reporting process.

IBM's report makes several recommendations to address these challenges. Organisations are encouraged to invest in suitable AI tools tailored to their needs, such as generative AI for reducing carbon emissions. Moreover, businesses are advised to deepen data analysis across tiers to bridge any perception gaps between executives and lower-level decision-makers, ensuring alignment and unobstructed visibility.

The State of Sustainability Readiness 2024 report was conducted by Morning Consult and involved 2,790 executives and decision-makers across 15 industries and nine countries, including Australia. The findings also feature case studies from notable organisations like Water Corporation and Downer Group in Australia and New Zealand.