New analysis from the Consumer Goods Forum (CGF) reveals both the potential challenges of AI on Scope 3 emissions across consumer goods value chains and the emerging innovations that can support companies to mitigate AI’s environmental impact.
The findings show that right now, AI and cloud computing make up a very small share (less than 1%) of a consumer company’s indirect emissions. However, with the sector projected to grow 25-fold by 2033, AI’s demand for environmental resources like energy and water may become a more widespread challenge over the next decade.
“AI is rapidly reshaping the consumer goods and retail landscape, helping to strengthen supply chains and enhancing operational efficiency, as well as boosting forecasting accuracy and increasing consumer engagement. As companies continue to adopt AI at pace, it will be increasingly important to ensure that environmental considerations are central to how these technologies are scaled,” says Grant Sprick, VP for climate and environment, Ahold Delhaize and co-chair of the CGF’s Climate Transition Coalition.
“While AI is expected to grow dramatically, so too are the emerging innovations that can support companies in mitigating the environmental impact. Within the Climate Transition Coalition at CGF, we’re continuing to strengthen our work on how to realize the substantial benefits of AI while being mindful of the footprint,” adds Archana Jagannathan, chief sustainability officer, PepsiCo Europe, and co-chair of the CGF’s Climate Transition Coalition.
Key takeaways:
· While AI's emissions footprint remains small compared to major Scope 3 categories such as raw materials, logistics and product use, its rapid growth is creating new and increasingly significant emission hotspots across the consumer goods value chain.
● Areas likely to see more tension as AI adoption accelerates include energy demand associated with data centers; rising amounts of water use for cooling systems; increasing usage of carbon-intensive materials in AI infrastructure and hardware; continued reliance on diesel-powered generators; and higher levels of electronic waste from hardware replacement cycles.
● A growing pipeline of innovations and opportunities helping to reduce AI’s environmental footprint include next-generation chips, which deliver improvements in energy efficiency; geothermal and other carbon-free baseload energy solutions supporting data center operations; zero-water immersion cooling systems that reduce both energy and water usage; and hydrogen fuel-cell backup systems that could replace diesel generators.
"AI is moving fast, and we know a lot of our members are trying to get their heads around what it means in practice, particularly for climate goals and Scope 3 emissions. This report is here to help answer some of those questions and give you a clear starting point. It’s meant to support both our members and the wider consumer goods sector in understanding and starting to manage the environmental impacts of AI. While those impacts are relatively small right now, they’re only going to grow in importance. Our hope is that this gives businesses a practical place to begin as they explore how AI fits into their operations,” says Sharon Bligh, sustainability director at the Consumer Goods Forum.
