Rapid expansion of artificial intelligence (AI) and the surging energy demands of data infrastructure have been pushing up carbon emissions from the tech sector globally.
This is according to a new report released today by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA).
The Greening Digital Companies 2025 report, which analyzes data from 200 of the world’s leading digital companies, reveals that energy consumption and emissions have been rising sharply, despite increasing commitments to climate goals.
“Advances in digital innovation, especially AI, are driving up energy consumption and global emissions. While more must be done to shrink the tech sector’s footprint, the latest report shows that industry understands the challenge and that continued progress depends on sustaining momentum together,” said ITU Secretary-General Doreen Bogdan-Martin.
AI’s energy appetite
The report highlights that data centers, central to AI development and deployment, saw electricity consumption grow by 12% annually between 2017 and 2023, four times faster than the global average. This growth is contributing significantly to the tech sector’s environmental impact.
- Four major AI-focused companies experienced a 150% average increase in their direct and purchased energy emissions, known as Scope 1 and Scope 2 emissions. Since 2020, emphasizing the scale of AI’s environmental burden.
- Overall, the 166 companies that reported greenhouse gas emissions were responsible for 0.8% of global energy-related emissions in 2023.
- Meanwhile, 164 companies accounted for 2.1% of global electricity use, totaling 581 terawatt-hours (TWh). Remarkably, just 10 companies made up half of this consumption.
“Digital companies have the tools and influence to lead the global climate transition, but progress must be measured not only by ambition, but by credible action,” said Director of Research and Digitisation at WBA, Lourdes O. Montenegro.
Signs of progress
Despite the rising energy use, the report found growing awareness and action across the sector.
- Eight companies scored above 90% in the report’s climate commitment assessment—a sharp increase from just three companies the previous year.
- Nearly half of the companies assessed have now pledged to reach net-zero emissions, with 51 aiming for dates before 2050.
- The report noted that transparency is also improving, with 49 companies issuing standalone climate reports in 2023, and 110 companies disclosing targets for indirect emissions related to supply chains and product use, up from 73 the year prior.
The report also noted a rise in renewable energy adoption. In 2023, 23 companies operated on 100% renewable energy, compared to 16 in 2022.
What you should know
The ITU report adds to the growing concerns about the impacts of AI on the global economy.
The International Monetary Fund (IMF) had last month expressed concerns that the surging demand for electricity to power AI data centers could create new challenges for energy infrastructure, prices, and emissions globally.
- The IMF noted that AI technologies are reshaping productivity, employment, and investment patterns worldwide, with the potential to significantly raise the average pace of annual global economic growth.
- However, this economic potential is closely tied to a steep rise in electricity demand, particularly from data centers that power AI models and cloud computing.
- According to the organization, data centers already use as much electricity as France or Germany, and by 2030, could consume 1.5 times more power than electric vehicles (EVs).
