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Top companies from Target to Sephora have pledged to increase their spend with minority-owned businesses. Now, a fund aimed at helping midsize businesses scale up and work with Fortune 500 companies has reached $1.45 billion and promises to bolster the supplier pipeline. 

Project Black is looking to fund middle-market companies' transition into certified minority businesses of scale that can serve as direct suppliers to Fortune 500 companies. The fund plans to pursue six to 10 companies with $100 million to $1 billion in revenue that may or may not be currently minority-owned. 

First announced in 2021 with a $200 million investment from JPMorgan Chase, Project Black is the first private equity initiative of Ariel Investments, a Black-owned global asset manager with over $16 billion under management. The fund will be operated by the newly formed private asset management offshoot Ariel Alternatives, headed by Leslie A. Brun, founder and former CEO of the $500 billion investment firm Hamilton Lane. "Our goal is to help close the racial wealth gap by creating minority-owned businesses of scale through access to both capital and customers," Brun said of Project Black in a statement. 

Leveraging contacts from the asset management side, Ariel Alternatives aims to build connections and partnerships between its network of the world’s largest corporations and the portfolio companies within Project Black. Along with forging new connections, each Project Black portfolio company will receive funding from investors — including Merck, Nuveen, Salesforce and Walmart — that have each committed $100 million to $200 million over the fund’s seven-year investment period. 

Bringing more minority-owned businesses into the big leagues 

"It's a big deal," Fortune senior editor Ellen McGirt said of the fund in a recent edition of her RaceAhead newsletter. Or, as Mellody Hobson, co-founder and co-CEO of Ariel Investments, put it: “We are scaling change. In so doing, we will redefine what it means to be a minority-owned business in the United States." 

The fund will target companies that are already growing, with annual revenues between $100 million and $1 billion, but still lack the scale to compete toe-to-toe with the direct suppliers vying for corporate contracts. It's also intentionally focused on high-margin sectors that make up the majority of corporate spend — including healthcare, industrial, media and marketing, technology, and financial and professional services.

"The key point here is that Project Black leverages existing corporate spends — what Fortune 500 companies are already doing — in a way that can help narrow the wealth gap in underrepresented communities," Hobson wrote in an email to clients and stakeholders when the fund was first announced. "We are helping to nurture a virtuous circle of spend and build. By spending with firms owned and run by people of color, big business is able to simultaneously help foster and elevate our communities. This is a powerful dynamic." 

Three Black senior investment professionals — APC Holdings co-founders Richard Powell and Frantz Alphonse, who first had the idea for Project Black, along with former Joshua Partners chairman Charles Corpening — will partner with Brun to execute the fund's day-to-day investments. 

This type of capital infusion comes at a good time: Although many Fortune 500 companies are looking to direct up to 15 percent of their total spends toward minority-owned businesses, they only spend an average 2 percent with minority-owned vendors today. 

Within 10 years, Project Black is looking to scale its portfolio companies to command up to $10 billion in new corporate spend annually while creating 100,000 new jobs in communities of color.

"Ours is a novel idea that has never been done before," Hobson wrote to clients. "While these ambitions are not new, they have not been done at scale by people of color, for people of color. Herein lies a new narrative where we are not able to adequately characterize Project Black’s cultural impact. We have the ability to break today’s mental models which relegate minority-owned businesses to a second-tier status because they lack scale. Size matters. Just a handful of companies can shift this paradigm and lead to new possibilities for underrepresented communities." 

Image credit: RODNAE Productions/Pexels

Partisan chatter about the evils of “woke capitalism” shows no sign of slowing down, but those who amplify the canard are running into a brick wall. Top U.S. corporations are ignoring the chatter. Instead of listening to these latter-day nattering nabobs of negativism, business leaders are making a fact-based, bottom-line case for clean power.

The power of the clean power purchase agreement

The latest news about corporate interest in clean power comes from Bloomberg NEF. Last week, BNEF issued a report that summarizes the global clean power market for the year 2022 under the title, "Corporate Energy Market Outlook." BNEF took note of industry-wide obstacles, including supply chain bottlenecks as well as high interest rates and an energy crisis sparked by Russia’s invasion of Ukraine.

Despite the harsh financial environment, BNEF totaled up 36.7 gigawatts’ worth of long-term clean power purchase agreements (PPAs) by private companies and public institutions, an 18 percent increase over 2021.

Power purchase agreements have become a common means of fast-tracking clean power. Instead of delivering clean kilowatts from a particular solar array or wind farm directly to an individual ratepayer, developers can sell their zero-emission electricity into wholesale markets. Ratepayers agree to buy the power, not the asset itself.

“Such contracts are comparatively easy for buyers to sign and allow them to hedge against power price spikes,” BNEF researchers explained.

Here in the U.S., tech firms have been the leading drivers of PPA activity over the years. That continued to be the case in 2022, led by Amazon, Meta, Google and Microsoft.

PPA activity is also becoming more diverse. BNEF notes that mining companies in Latin America were especially active in 2022, deploying PPAs to secure clean power for mines in parts of Chile and Brazil.

The PPA field is growing into new markets, too. BNEF notes that PPAs have only become widely available in Japan, China and South Korea in recent years, and the pace of uptake is already quickening. “Activity across APAC is expected to continue growing significantly as more companies set 100 percent renewable energy goals,” the report reads.

“Companies can access clean energy at scale in most major countries, the economics make sense, and amid turbulent energy markets, PPAs have become useful risk-mitigation tools for CFOs,” added Kyle Harrison, head of sustainability research at BNEF, in a statement. 

Who’s afraid of the big, bad woke?

The term “woke capitalism” was reportedly coined by the conservative pundit Ross Douthat in 2018. It has taken on a variety of meanings in recent years, but the basic intention is to smear ESG (environmental, social, governance) investing as a hollow corporate performance meant to curry favor with Democratic office holders at the expense of investors and government pension contributors.

Republican office holders in Texas and other states have been deploying the “woke capitalism” cudgel to punish financial institutions that support decarbonization. However, so far the only ones hurting are local taxpayers, who are at risk of missing out on competitive bids for municipal bonds.

JPMorgan Chase, for one, is not having it. The company is among the financial firms targeted by the anti-ESG movement, but instead of slinking away, it has clapped back with a vigorous defense of decarbonization. Two of the firm’s top sustainability officers, Ramaswamy Variankaval and former Barack Obama advisor Heather Zichal, penned an op-ed under the title, “Clean energy is a massive investment opportunity,” published in Fortune and elsewhere last week.

In a not-so-subtle dig at Republican policies under the Donald Trump administration, Variankaval and Zichal indicate that federal support for decarbonization lagged before 2021, forcing states to pick up the slack. Now, with strong federal policies under the Joe Biden administration, the stage is set for a more rapid uptake of clean power and other carbon-reducing technologies.

“Building on years of state policies that catalyzed the early days of low-carbon innovation, we now have the momentum to reinvigorate domestic manufacturing, build resilient supply chains, create good jobs, and cut energy costs–all while making progress on the climate challenge,” they wrote, crediting three laws prioritized by the Biden administration: the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the CHIPS and Science Act.

“At JPMorgan Chase, we’ve financed more than $170 billion in green initiatives in the last two years and are targeting to finance an additional $800 billion for green by 2030,” they added.

The bottom-line case for decarbonization

Variankaval and Zichal also underscored a key problem with anti-ESG legislation passed in Texas, and under consideration in other states. The legislation seeks to punish financial firms that invest in clean power, but some of these same firms provide a broad spectrum of industries with financial support. JPMorgan Chase provides “critical financing” to help reduce emissions from the oil and gas industry, along with other important sectors that still rely on fossil energy including power generation, transportation and heavy industry, they argue. 

The falling cost of wind and solar power is another key bottom-line factor working in favor of decarbonization. During the Obama administration, consumers paid a premium for access to clean power. Now, the tables have turned.

An estimated 97 percent of coal power plants in the U.S. are more expensive to operate than nearby renewable energy projects, according to a January report from the think tank Energy Innovation, representing a “significant acceleration” compared to two previous analyses.

“For more than three-quarters of U.S. coal capacity, the all-in cost per [megawatt-hour] of the cheapest renewable option is at least a third cheaper than the going-forward costs for the coal it would replace,” the Energy Innovation report reads.

The woken have spoken

In their op-ed, Variankaval and Zichal emphasize that the point of all this is to prevent catastrophic global warming, a phenomenon that key Republican policymakers — including 139 members of the 117th Congress — continue to dismiss as a hoax.

Against this backdrop, the “woke capitalism” canard is nothing more than a hoax of its own. The lack of real-world evidence is perfectly consistent with Republican policymaking on a wide range of issues, which leans on vituperative sloganeering to fire up an increasingly extremist voter base.

The anti-ESG movement is yet another demonstration of Republican policy-by-projection. When they accuse ESG investors of of staging empty performances for the sake of currying favor with politicians, they are looking straight into a mirror.

Image credit: American Public Power Association/Unsplash

An alternative meat made from cashew fruit is one of the latest upcycled food products to hit retail grocery stores as interest in preventing food waste and conserving resources continues to gain traction among consumers and entrepreneurs alike. Last year, the upcycled food market was worth just under $53 billion, with the industry expected to add another $30 billion to its market share in the next decade.

While the technical name — products from food waste — doesn't inspire much confidence, repurposing otherwise discarded agricultural outputs could go a long way toward alleviating world hunger while also reducing greenhouse gas emissions. Of course, this will require scaling up to process a variety of leftover ingredients — from the cashew apples used in Cajú Love's fake meat, to chocolate chip cookies made with spent grain from craft breweries, to snacks and beverages that utilize the leftover part of the cacao fruit, and much more. Advertising and educational campaigns aimed at getting consumers excited about these alternatives will also be integral.

Cajú Love's signature product, which was originally launched in 2021 and made available online, is produced from the leftovers of the cashew nut industry in Brazil. The industry produces 2.7 million cashew apples each year, but only about 12 percent of those are pressed for juice or turned into jam and other products, with the rest going to waste. Since its founding, Cajú Love boasts having salvaged and repurposed 105,000 of these. Although that may not sound like a huge dent in the total, there is plenty of room to scale up if the brand can get consumers excited about its high-fiber product.

"Cashew fruit meat has the potential to feed a growing population without putting pressure on the environment. Cajú Love has been a pioneer in the upcycled food movement by creating a new plant-based staple from upcycled cashew fruits,” Alana Lima, the company's founder, said in a statement. "We have built a new supply chain system to upcycle cashew apples that helps conserve energy in food production, reduce food waste, soil exploitation and water usage, and provides an additional income stream for local farmers.”

The cashew fruit meat, which resembles shredded beef, is part of a growing movement to reclaim agricultural outputs and spent grains. While microbrewers have been known to donate their spent grains to pig farms, 2.5 million tons of it is produced by the industry annually — a decent-sized supply for snack and pet food makers. Brewer's Foods is one such brand. The snack food maker has recently added chocolate chip cookies to its line, which already included crackers and pita chips. Likewise, Leashless Lab produces dog treats from grains that were first used to brew beer. A major food distributor has dipped its toe into the upcycling pool as well, with U.S. Foods offering a Pub Grain Hamburger Bun made with spent grains.

Leashless Lab and U.S. Foods are among dozens of brands with products that have been certified by the Upcycled Food Association. Other examples include Blue Stripes Urban Cacao, which makes drinks and snacks from the leftover parts of the cacao fruit, and Matriark Foods, which turns vegetable remnants and surplus into sauces and broths.

Not all upcycled food waste is turned into actual food, however. Other uses include the hand sanitizer and vodka produced by the Lost and Found Distillery and skin care products by BYBI. Altogether, the Upcycled Food Association claims to have kept 840 million pounds of food from being wasted.

Food waste contributes a hefty amount of greenhouse gases to the atmosphere — 170 billion metric tons worth according to the U.S. EPA — and that's not even counting the methane produced by what's left to decompose in landfills. Roughly a third of all food produced worldwide is wasted, resulting in yearly losses worth $940 billion as well as 1 in 9 people going hungry. But we can rectify these situations by upcycling on a large scale.

Still, since most consumers are largely unfamiliar with upcycled foods, advertising and education are needed to spread the word. Public service announcements can help pave the way for greater interest, while changes to nutritional education can help guide consumers on how to best utilize the new products — such as recognizing when alternative meat products are better sources of fiber than they are protein. Effective campaigns could work to get consumers excited about the variety of novel foods available, ensuring the market is there as more products hit the shelves.

Image courtesy of Cajú Love

As the world of work has shifted to hybrid and remote setups in some industries, workplace wellbeing is pending a reassessment. Flexible working arrangements allow for reduced travel time and more availability to meet personal needs and health or family obligations. However, research indicates that hybrid and remote work may come with a downside for some people's mental health. 

Workplace loneliness was an issue before the COVID-19 pandemic and continues to be. In 2021, two-thirds of people working from home said they felt isolated or lonely at least some of the time, and 17 percent felt this way all the time, according to polling from the American Psychiatric Association. Over half (59 percent) of hybrid employees and 56 percent of remote employees report having fewer work friendships since going hybrid or remote, according to 2022 polling from Microsoft.

In her new book, Workplace Wellness That Works, Motion Infusion CEO Laura Putnam writes about the unintended consequences of hybrid and remote work for some employees' wellbeing and provides tips for workplace wellness programs.

In an interview with TriplePundit, Putnam said remote work has a negative impact on social connections in the workplace. This is because social interactions are greatly reduced, she said, and people are getting out of the habit of connecting with others. “What we’re seeing is that people say they want to be working from home," Putnam told us. "At the same time, people are also reporting higher and higher levels of loneliness and also not even knowing where to begin in terms of fostering more social connection."

The effects of pandemic isolation are lingering, and remote work could be making some of them more pronounced

“While the pandemic is not as front and center for us, and we’re not having to react to that in the moment as much and we’re in a way returning to normal life, the long-lasting effect it had on our mental health will play out over time,” Putnam said.

Of course, immunocompromised people and those with other health conditions may have no choice but to work from home. But from Putnam's perspective, as it becomes safer to do so, working in person offers benefits for informal mentoring and professional development as it fosters spontaneous connections as opposed to pre-planned virtual meetings.  

Some Americans are also wary about the long-term effects of remote work on career growth. More than half (56 percent) of working professionals believe employees who work in the office have a competitive advantage over their remote colleagues for raises and promotions, according to 2023 polling from the American Staffing Association.

But remote work isn't the only thing driving disconnection in the workplace. “Working in this remote and hybrid environment is only one factor of many [for loneliness]," Putnam said. "Another key issue that people are facing is just the threat against one’s economic security." 

The majority of Americans believe the U.S. is headed for a recession, and 58 percent of adults are likely to obtain a second job. “A lot of people are feeling frightened about the current state of world," Putnam continued. "And ironically, when we feel afraid, we have a tendency to withdraw as opposed to reach out — which reinforces the cycle of being disconnected from others.” Hybrid and remote work, she said, can reinforce this tendency. 

Creating the foundation for new workplace wellbeing

In her book, Putnam writes about multiple key success factors for creating workplace wellness programs. Some of these include leadership engagement, aligning wellness strategies with organizational ethos, creating opportunities for engagement and better communication.

More specifically, she told 3p that leaders being open about their own mental health experiences creates a path for others to do the same. And in addition, organizational policies will have to be reassessed to exercise more care for employees along with considerations for challenges like workplace overload and perceptions of inequity. With this, Putnam told 3p that empowering frontline managers and helping them understand their impact in wellbeing is critical as well.

The world of work is unlikely to return to what it was before the pandemic without a true consideration of wellness. As Putnam writes in her book: "Wellness, at its core, is about getting back to doing what we naturally do. Increasingly, however, we’re being culturally asked to do things that we’re not biologically designed to do. We’re born to move, but we’re culturally mandated to sit. We’re biologically programmed to eat whole foods, but our busy schedules and toxic environments prompt us to eat processed foods that are immediately gratifying, but never satisfying. We’re hardwired to alternate stress with relaxation, but the society we live in idolizes being busy and always on the go."

With this awareness, a reframing of work attitudes, and having open conversations about wellbeing and connection, businesses can foster workplace wellbeing and, ultimately, bottom-line success. 

Image credit: Helena Lopes/Unsplash

It's odd to think that people are nostalgic for the earlier days of COVID-19, but a new Gallup poll shows that workers miss the increased flexibility and empathy employers adopted at the start of the pandemic. Nearly 75 percent of global employees now say they are either not engaged or actively disengaged at work. Why? It seems workers feel they are once again being treated like cogs in the machine, rather than human beings.

“The world is closer to colonizing Mars than it is to fixing the world's broken workplaces,” Gallup's annual State of the Global Workplace Report put it bluntly, noting that employee engagement has reached its lowest level since 2015.

In addition, stress levels among professionals worldwide are at “an all-time high.” Gallup found that 59 percent and 56 percent of disengaged employees report experiencing stress and worry frequently at work.

Employers are missing the boat on engagement

What gives? Unfair treatment at work topped the list as the leading cause of employee disengagement, Gallup found, with an unmanageable workload, unclear communication from managers, lack of manager support, and unreasonable time pressures close behind.

The report found the engagement elements with the most marked declines since the onset of the COVID-19 pandemic were:

• Clarity of expectations
• Connection to the mission or purpose of the company
• Opportunities to learn and grow
• Opportunities to do what employees do best
• Feeling cared about at work

About 32 percent of the 67,000 full- and part-time employees surveyed were engaged in their work in 2022, while 18 percent were actively disengaged. Active disengagement has risen each year since 2020. The remaining respondents — 50 percent — were neither engaged nor actively disengaged. In the U.S. in particular, the latest data shows the lowest ratio of engaged-to-actively disengaged employees since 2013.

This is not just a U.S. phenomenon. Fewer than 2 in 10 European employees feel engaged at work — lower than any part of the world.

Millennials and Gen Z employees are even more disengaged

The trend of disengagement and job-hopping is even more pronounced among Generation Z and young millennials. This reporter did her own survey close to home: My millennial daughter, Marielle Velander, 30, has worked for several years in the tech industry, and she had a definite view on the Gallup findings.

“In today’s fast-paced tech scene, it seems like new titles and functions are being invented all the time, without clear job descriptions," she said. "This was the case with my role of product operations, a new type of role that had me reshuffled in multiple organizations amid a context of ‘organizational change’ or ‘strategy definition.’ This constant reshuffling has left me and many former colleagues disengaged and unclear about how we provide value to the organization. I kept wondering why executives did not understand the revenue-generating aspects of my role."

Her advice for business leaders looking to do things differently? “Companies should do a better job of managing change fatigue and providing clear job descriptions. They should also be more open to investing in innovative new roles, like product operations, and give these new roles a chance to show their value before folding [them] into yet another radical strategy change.”

The research bears out these observations. The top five reasons millennials leave their jobs include no opportunity for growth and feeling disengaged and under-appreciated.

Managers need to be better coaches

No matter the generation, contented employees find their work rewarding and meaningful — and that happens when leaders prioritize employee well-being and engagement, Gallup found.

"Managers need to be better listeners, coaches and collaborators," researchers recommended in the Gallup report. "Great managers help colleagues learn and grow, recognize their colleagues for doing great work, and make them truly feel cared about. In environments like this, workers thrive."

Other recent research indicates the problem doesn’t lie in the trend toward more remote work, either. Some 52 percent of workers recently told the Conference Board that having a caring and empathetic leader is more important now than before the pandemic. Whether they work in an office, at home or a hybrid of both has no impact on that view, or their level of engagement, according to the survey.

There is plenty of evidence that engaged workers are a smart investment for employers. Some studies have found that engaged employees outperform their peers that are not engaged. Overall, companies with high employee engagement are 21 percent more profitable.

The risk of not taking action to engage your employees is losing talent — especially young talent — altogether. Marielle has taken a year-long break from her tech career to travel the world. As she described it: “I’m trying to realign with my purpose after feeling like I lost my agency over my career.” It would seem she is not alone.

image credit: Crew/Unsplash

When a perished whale falls to the bottom of the ocean, and no one is around to hear it, does it make a sound? We may never know the answer, but when a whale washes up on the beach, everyone takes notice. Recently, there's been a spike in whale deaths and strandings along both the eastern and western coasts of the U.S.

Researchers believe that vessel strikes and entanglement in fishing equipment and ropes may be to blame. Prey is also coming closer to shore, attracting whales and exposing them to vessels and fishing gear. Besides the hefty cleanup costs, what is the price of these unfortunate events? It turns out it's high since whales provide a behemoth of benefits.

A world of whale benefits for people, planet and profit

Whales are good indicators of an ecosystem's health. As top predators, they eat fish, invertebrates, mammals and plankton, and they also serve as prey for other species like sharks or bears. When whales die, their giant carcasses typically sink to the seafloor and serve as food for deep-sea and marine communities. This process can last for decades, supporting hundreds of species.

On the human side of things, whale watching is a booming and rapidly growing industry, valued at nearly $2.9 billion globally. This activity makes substantial contributions to employment and the economy of coastal communities. Whale-watching tours also educate the public and serve as a means for researchers to gather data on whale populations.

The perks of the whale pump

Whales provide even more services through a process delicately named the whale pump. Whales feed at depths and then come to the surface to defecate. Their nutrient-rich waste helps support phytoplankton, or microscopic marine algae, on the ocean's surface. This plankton in turn serves as the base of marine food webs, supporting fish, birds and marine mammals.

It goes without saying that marine fisheries are a huge business, with an economic impact worth $325 billion annually. In 2020, they employed nearly 38 million people, the vast majority in Asia. Together, fisheries and aquaculture provide around 17 percent of the world's protein needs.

Carbon credit cetaceans?

But that's just the start since whales' support of phytoplankton yields even more benefits. Around 50 percent of the world's oxygen comes from the ocean, and phytoplankton produces most of this. They also uptake lots of carbon dioxide. Oceans remove around 30 percent of human-emitted carbon dioxide every year, mostly due to phytoplankton.

Whales themselves also directly remove carbon from the atmosphere. Their giant bodies uptake and store carbon over their long lifespans, lasting 100 or even 200 years for some species. And when whales die, the carbon in their bodies falls to the sea floor, where it can remain for centuries. Extremely large whales, or great whales, sequester an estimated 33 tons of carbon dioxide over their lifetimes. Due to their numerous benefits, researchers have valued each great whale at $2 million, though other scientists argue we lack the necessary information to produce such accurate estimates.

Perils to whale populations

Unfortunately, many whale species and their close relatives like dolphins and porpoises are under threat. Over a quarter of the 93 cetacean species found globally are listed as vulnerable, endangered or critically endangered. While whaling once decimated whale populations worldwide, that practice is banned in many countries now. Some of the current threats to whales are encounters with vessels and fishing gear, as well as pollution, habitat loss and climate change.

What can companies do to help whales around the world?

Fortunately, companies can help whale populations in many ways. For instance, some shipping companies — including the giants Hapag-Lloyd and MSC — have voluntarily reduced their speed off the coast of California to help prevent whale strikes. The U.S. National Oceanic and Atmospheric Administration (NOAA) also offers a list of guidelines to reduce vessel strikes with whales and other marine animals.

In a similar vein, whale-watching tours should follow regulations and guidelines to avoid adverse effects on the whale populations they intend to celebrate.

While no carbon market yet exists for protecting whales, many are encouraging the idea to compensate those who incur costs for whale protection. Until then, supporting one of the many nonprofit organizations focused on protecting whales and other marine life is another great option.

Whales have shown remarkable resilience, with many species increasing after being decimated by whaling. It's not too late to help protect them and the multitude of benefits they provide.

Image credits: Venti Views and Dmitry Osipenko via Unsplash

The ascendency of technologies like artificial intelligence (AI) and machine learning are quickly going beyond what humans ever imagined. 

Over 20 years ago, American technologist and futurist Ray Kurzweil coined the "law of accelerating returns" which demonstrates that the pace of technological progress speeds up exponentially through history. “We won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate),” he wrote in a 2001 essay on the subject.

When left to think about this, I have mixed feelings of exhilaration at the potential of technological progress, as well as fear over the notion of singularity, the merging of humans and robots to the extent that it collapses human civilization as we know it. There are two sides to everything and whilst no one knows exactly what the long-term impact of AI will be, it’s best not to venture into this minefield and focus on what we know can help businesses tackle their biggest challenges today.

AI to enable better decision-making for sustainability

Companies are facing complex challenges in their attempt to balance business demands while adhering to sustainability goals. Achieving a net-zero emissions economy by 2050, as 197 governments agreed to do under the Paris Agreement, will require dramatic transformation in every sector of the economy. One undeniable area where AI can help leaders is by bringing insights from data at a massive scale and helping them to make smarter, more sustainable decisions.

“AI can accelerate an organization’s progress toward its goals through automation of slow points in decision-making with [environmental, social and governance (ESG)] constraints in mind; elimination of human error; and speeding up processes that can slow down an organization's progress,” says Sarah Thuo, global sustainable sourcing and managed services leader for IBM Consulting Sustainability Services. For instance, in energy management, AI can be used to make decisions around when machines should be used, when electricity can be turned off, and how to balance grids while conserving the use of resources, Thuo says.

AI to measure and report ROI of sustainability efforts

In an IBM survey of over 3,000 CEOs, nearly half ranked sustainability as a top priority for their organizations, an increase of 37 percent from 2021. However, 51 percent also cited sustainability as one of their greatest challenges.

“It is virtually impossible to make a positive sustainability impact if you haven’t set goals and cannot measure how your actions affect ESG goals,” Thuo says. “Setting and tracking sustainability goals requires data gathering, curation, and analysis from multiple data sources that reside in multiple systems around the company and even outside the company.” AI can solve for this. IBM, for example, is using AI to build a base of data for all underlying facilities and assets needed for the sustainable management of over 50 million square feet of space across 800 locations in 100 countries.

“AI can help companies measure ESG data where it’s stored and transform it into predictive insights," Thuo explains. "These insights can be used to assess progress toward sustainability benchmarks and help reduce the environmental impact of daily business operations, for example, by improving how companies manage their facilities, physical assets, data centers and supply chains."

AI for more responsible supply chains

Ensuring responsible supply chains is another enormous issue for multinational corporations. Although companies pledge to work only with suppliers that adhere to social and environmental standards, it is hard to put this into practice as visibility deep into the supply chain is limited. “AI and automation can enable organizations collect data, identify risk, validate documentation and provide audit trails, while also managing their carbon, waste, energy, water consumption and materials,” Thuo says.

AI to reduce the impacts of climate change

Failure to mitigate climate change, inability to adapt to climate change, and extreme weather events are the top three risks for businesses over the next 10 years, according to the World Economic Forum's most recent Global Risk Report. 

The U.S. economy alone stands to lose an estimated $500 billion per year by 2090 if we fail to act on climate change. "AI can be the game-changer here — helping companies analyze climate, weather and geospatial data, and bringing that data together with business operations to manage risk," Thuo says.

Boost economic growth, create jobs and reduce emissions

Using AI applications for the environment has the potential to boost global GDP by 3.1 percent to 4.4 percent, while reducing global greenhouse gas emissions by 1.5 percent to 4 percent, by 2030. The productivity benefits of AI applications that result from optimizing data and automation of manual tasks could generate anywhere from $3.6 trillion to $5.2 trillion and create up to 38.2 million jobs globally.

A 2022 Boston Consulting Group study found that the organizations harnessing advanced digital technology solutions for emissions measurement are twice as likely to reduce them in line with their ambitions.

As companies look to shift from a triple to quadruple bottom line — people, planet, profit and impact — advanced technologies like AI are essential catalysts in enabling a more sustainable future, faster.

Image credit: Tara Winstead/Unsplash