AI’s energy appetite and what UK businesses should be doing about it
Artificial intelligence is hungry for energy. Behind every chatbot, Copilot, or agent are servers burning a lot of power.
As more UK companies adopt AI tools, it’s worth paying attention to how much energy those tools use and what that means for your sustainability targets and reporting requirements.
AI’s environmental footprint is growing
In 2022, Microsoft used 6.4 million cubic metres of water to cool its data centres, a 34 percent increase on the year before. Data for 2024 hasn’t been released in full, but you can predict the number is likely higher with the overall demand for cooling still rising.
A recent report from MIT Technology Review highlighted the scale of AI’s environmental impact. Training a single large model can emit as much carbon as five petrol cars over their lifetimes. Most of the ongoing energy use comes not from training, but from everyday use. If your business is regularly using generative AI, you’re contributing to that footprint.
Meta recently signed a long-term nuclear energy deal to meet the rising power demands of its AI infrastructure. UK businesses won’t be building their own data centres, but they do need to know how their chosen tools are powered.
What UK companies are expected to report
Larger companies in the UK are already required to report their energy use under the Streamlined Energy and Carbon Reporting (SECR) framework. This includes electricity used by cloud services and data platforms.
There are also mandatory climate-related disclosures under the Companies Act, aligned with the Task Force on Climate-related Financial Disclosures (TCFD). These cover governance, strategy and risk related to climate change.
New rules are on the way. The UK is planning to adopt the UK Sustainability Reporting Standards from 2026, based on international frameworks from the ISSB. These rules are expected to apply to a broader set of businesses over time, not just listed companies.
What you should be doing now
If you’re adopting AI tools in your business, now is the time to bring those decisions into your sustainability thinking. Start with these actions:
- Ask your technology suppliers how their services are powered
- Choose AI tools that run on low-carbon or energy-efficient infrastructure
- Build AI-related emissions into your ESG and SECR reporting if applicable
- Keep an eye on evolving UK sustainability standards
- Consider future procurement policies that factor in environmental impact
The British Standards Institution has published guidance to help companies measure the carbon footprint of AI systems. It’s an emerging area, but the direction of travel is clear.
Final thought
AI can improve productivity, creativity and insight. But it also comes with environmental cost. The businesses that understand that now, and plan accordingly, will be in a stronger position when stakeholders start demanding answers.
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