ESG: AI’s growing energy footprint

• A new approach to net zero targets – The Science Based Targets initiative (SBTi) has launched its new Corporate Net Zero Standard 2.0. The revised framework moves away from a one-size-fits-all model, introducing different requirements for different types of businesses. The new standard could help clients better identify companies making credible progress.
  
  
• FCA pushes for simpler climate disclosures – The FCA has proposed replacing existing TCFD product-level reporting requirements with a more streamlined approach. Under the proposals, retail disclosures would focus on whether climate-related risks and opportunities are financially material to an investment. Institutional investors would be able to request product emissions data when needed.
  
  
• Amazon achieves 75% of its ‘water positive’ goal – The company has a target of being completely ‘water positive’ by 2030, meaning it will return more water to communities and the environment than it uses in its data centres. In 2025 Amazon reached 75% of that goal. This progress has been driven by greater efficiency, and increased use of recycled wastewater. As AI adoption accelerates, investors are paying closer attention to the environmental footprint of the infrastructure powering it.
  
  
• Fossil fuel financing increases by 8% – The world’s largest banks increased fossil fuel financing by 8% in 2025, lending over $906 billion to fossil fuel companies. US banks, JP Morgan and Bank of America, were top of the list, with European banks generally having a higher ratio of lending to clean and renewable energy.

Spotlight: AI's growing energy demand

Why this matters

Behind every AI breakthrough sits a growing network of data centres, bringing both ethical considerations around how AI is used and significant demands for electricity and water.

The chart above highlights how energy demand from both live data centres and proposed new projects could rise significantly though to 2040. While meeting this demand will require a mix of energy sources, clean energy and battery storage are increasingly emerging as some of the most economical and sustainable solutions.

AI is creating one of the largest infrastructure buildouts in recent history. For clients, this isn't just a technology story. It's also an energy, utilities, and sustainability story. The winners may not only be the companies building the AI models, but also those providing the clean power, grid infrastructure and energy storage needed to keep them running.

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