Data centre deployment to support Artificial Intelligence continues at significant pace. Between 2022 and 2024, AI-related companies accounted for $12 trillion out of the $16 trillion increase in S&P 500’s market capitalisation. The largest tech companies are planning up to $300 billion in AI-focused capital spending in 2025 – 20 per cent more than the total US power sector investment. These figures reflect the remarkable pace of AI’s technological and commercial expansion as well as its strategic potential to firms.

However, alongside the exciting possibilities AI offers, there are substantial concerns: as AI adoption increases, so does the energy required to power the data centres that support it. A single AI-dedicated data centre consumes as much power as 100,000 households, while larger centres draw 20 times that.

This creates a tension between the strain that technological innovation places on our natural environment and technology’s potential to offer support to the climate transition. AI can optimise energy sector operations, accelerate innovation and enhance the resilience and efficiency of energy systems and firms. However, ensuring that technological progress aligns with climate goals is essential for a sustainable digital future.

That’s exactly why UK Finance hosted a discussion on sustainability and digital innovation at the Digital Innovation Summit (DIS) on 24 June, during London Climate Action Week.

The panel consisted of three noteworthy speakers:

• Lindy Fursman, Director for Climate and Energy at the Tony Blair Institute for Global Change (TBI)
• Kanishka Narayan, MP for the Vale of Glamorgan and formerly head of tech policy for the Labour Party
• Daryl Elfield, Partner at KPMG specialising in Sustainable IT.

Each of the panellists leveraged their unique experiences from their fight for sustainability in the field of technology. Their interventions brought bold ideas and real-world solutions to the table.

Lindy Fursman opened the conversation examining the role of digital innovation in tackling sustainability issues. She shared insights from TBI’s paper ‘The Climate Paradox: Why we need to reset action on climate change’ which highlighted the opportunity for technologies, including AI, to accelerate climate action.

Adding to Lindy’s policy perspective, Daryl Elfield provided an operational analysis of sustainable AI’s benefits to financial services (FS). As Daryl stated, “sustainability is not a trade-off to growth – it’s an enabler,” a principle highlighted by KPMG’s proactive commitment. By tackling inefficiencies like ‘dark’ data (which accounts for 60 per cent of stored information but is only ever used once), through optimising IT activities, companies can significantly shrink their digital footprint.

Daryl further highlighted that the financial services industry is the second-highest technology-related emitter. His message was clear: now is the time to create a business case and digital carbon reduction plan. With KPMG’s guidance, companies can capitalise on the opportunity to redirect capital towards low-carbon projects, proving responsible growth and innovation go hand-in-hand.

Building on this, Kanishka Narayan highlighted yet another example of the panel’s bold ideas. His novel ‘All Hands-on Tech’ initiative aims to create 1,000 jobs in his constituency by upskilling employees to better integrate with technological advancements. Kanishka actively continues to explore initiatives focusing on the synergy between AI and sustainability by advocating for data centres and renewable projects which will interdependently support each other’s viability.

With the panel’s key takeaways in mind, UK Finance will continue to engage at the interface of sustainability and digital innovation. Our work on mobilising capital for the net zero transition seeks to promote the right policy environment to ensure that finance can flow for innovative low-carbon sectors. Meanwhile, as requirements increase for firms to report their carbon emissions, UK Finance convenes members to share good practice in carbon reporting – including supply chain and data centre-related emissions.

Together, these actions highlight that our path to a sustainable future will require not just collaboration, but to rethink our own firm strategies and policy engagement.