SAP: How is AI Innovation Impacting the Energy Transition?

The World Economic Forum estimates that by 2035, AI could help reduce annual global emissions by three to six gigatons of carbon dioxide equivalent, largely through smarter energy use and optimisation.

Building on this opportunity, enterprise software giant SAP has released its new report AI and Sustainability at SAP, outlining how the company itself is integrating AI into its platforms to cut energy consumption and carbon costs, while also ensuring AI models themselves are energy-efficient and ethically managed.

Rethinking energy efficiency in AI systems

SAP’s approach focuses on reducing the energy demand of AI technologies while maintaining high performance and reliability.

The company is targeting greater energy efficiency in its AI systems to reduce emissions and operating costs across customer supply chains. All of SAP’s AI assets are optimised for energy use under its direct operations, and continuous monitoring ensures that performance gains are matched by reductions in energy intensity.

SAP’s Global AI Ethics Policy also ensures responsible energy use is embedded at every stage of AI development and deployment, minimising both environmental impact and societal risk.

Matthias Medert, Global Head of Sustainability at SAP, said on LinkedIn: “AI is reshaping how the world works. But as its impact grows, so does our responsibility to ensure it scales sustainably.

“As AI becomes more powerful, it must evolve within planetary boundaries and be guided by strong ethical principles.

“Together, we are rethinking how AI is built, deployed and governed, balancing performance with efficiency and innovation with accountability.”

Driving smarter energy decisions for business

According to the whitepaper, SAP Business AI automates complex data processing to transform insights into actionable strategies, helping organisations optimise their energy and resource management at scale.

For example, CFOs and CSOs can generate more accurate sustainability reports—up to 80% faster—while COOs use AI-driven forecasting to cut energy waste in production plants and logistics networks.

Dominik Asam, Chief Financial Officer at SAP, says: “The future of sustainability lies in connecting carbon and financial data in the Green Ledger – managing cash and carbon with the same rigor.

“With AI, we can raise data quality, automate compliance across hundreds of global regulations and identify the smartest investments for decarbonisation.

“This is how we move from reporting sustainability to steering it as real business value.”

Powering the AI energy infrastructure

Beyond SAP, other technology leaders are working to ensure AI’s rapid growth aligns with clean energy goals. Microsoft, for instance, is advancing AI sustainability through its Community-First AI Infrastructure – a plan to build and operate data centres that balance power needs with renewable sourcing and community benefit.

This includes covering electricity costs, replenishing water supplies, creating local jobs and investing in AI skills training. Microsoft views responsible energy management as core to the AI economy, which it says will require large-scale infrastructure investment to sustain growth.

Melanie Nakagawa, Chief Sustainability Officer at Microsoft, said on LinkedIn: “AI is changing the world faster than any other innovation in history.

“The speed of its adoption, the surge in its demand and the rapid evolution of its capabilities are unlike anything we’ve seen before.

“And like breakthrough technologies that have come before – including electricity, cars, aviation and the Internet – building the AI economy requires investments in new infrastructure.”