The spread of artificial intelligence and cloud-based services is driving growing energy demand. According to a forecast by the International Energy Agency (IEA), global electricity consumption by data centres could rise from 415 TWh in 2024 to around 945 TWh by 2030. This represents more than a twofold increase in just six years, bringing new sustainability considerations to the forefront for businesses as well.

Digital transformation also has an environmental footprint

The use of AI-based applications and cloud services is now a routine part of many companies’ operations, as digital solutions can make processes more efficient, reduce administration and, in certain cases, resource consumption as well. However, operating them requires significant computing capacity, electricity and cooling, which can also affect water consumption.

A significant proportion of the environmental impact arises at technology providers, which means it often does not appear directly in companies’ own energy consumption data. However, emissions associated with cloud services and AI tools may form part of a company’s carbon footprint, typically under Scope 3, meaning indirect emissions along the value chain. When evaluating digital procurement and IT developments, it is therefore becoming increasingly important to consider environmental impacts alongside costs, performance and data security.

What do we know about technology providers’ environmental performance?

Companies can already request energy consumption, carbon emissions and water management data from their cloud and AI service providers. Some major technology companies also provide customer-level emissions reports, although the level of detail and comparability of the data still vary.

The European Commission is therefore working on a more consistent assessment of data centres’ sustainability performance. The planned EU rating scheme and minimum performance requirements aim to make data centres’ energy efficiency, water consumption and environmental performance more transparent and comparable.

Water management is also becoming an increasingly prominent issue in Hungary. The government’s Sustainable Water Management Action Plan, adopted in September, prioritises retaining water locally over rapid drainage. This approach also draws attention to the importance of responsible water use in the development of industrial and digital infrastructure.

The environmental cost of AI should also be included in the digital strategy

In the coming years, it will become increasingly important for companies to gain a more accurate picture of the environmental impacts of their digital operations. To achieve this, it is worth reviewing what data is available from technology suppliers, how the associated emissions are reflected in Scope 3 calculations, and what sustainability considerations should be incorporated into IT procurement. As a result, understanding the environmental footprint of AI and cloud services can become part of a considered digital strategy, and appropriate data and measurement methods can help companies take advantage of technological progress while taking environmental impacts into account.