AI, IoT and litigation are forcing sustainability onto balance sheet
Four practitioners show how AI tools, green finance and climate law are enforcing sustainability commitments
For years, sustainability sat at the margins of corporate strategy, funded by goodwill and governed by pledges. Artificial intelligence (AI) and data-driven optimization are now changing that, giving boards a language they understand: return on investment.
The shift is visible across sectors. Energy optimization powered by AI and the Internet of Things (IoT) is generating measurable savings for large enterprises. Green economy stocks are outperforming major indices. Food researchers are warning that AI tools can only deliver where basic digital infrastructure exists. And climate lawyers are watching voluntary commitments harden into legal duties.
“If sustainability can be linked as a business differentiator, it has a direct impact on the top line and bottom line. If you are able to craft the business case, that is generating interest,” said Hemakiran Gupta Kuralla, global head of sustainability services practice at Tata Consultancy Services (TCS).
“We show you how you can save in the whole energy optimization chain, and then I take my money out of the savings you make. We signed with one of the largest retail chains worldwide in North America. We are talking about $8 million to $10 million per year in savings,” he said.
The approach operates on a gain-sharing model: TCS identifies savings across a client's energy chain and takes its fee from the savings generated, meaning clients carry no upfront financial risk.
The model is underpinned by TCS Clever Energy, the company's AI and IoT-based energy management platform, which uses AI and machine learning (ML) frameworks to monitor energy demand, detect usage anomalies and generate predictive analytics.
The platform acquires real-time energy data from diverse infrastructure spread across geographies, including legacy and proprietary systems, and provides around-the-clock monitoring with an enterprise-wide consolidated view for faster decision-making.
“Think of sustainability as a differentiator that builds resilience into your business operations. Carbon reduction is a byproduct. Environmental, social and governance (ESG) will happen, but if you look at it from a resilience point of view, you get the board to agree,” Kuralla said.
The compelling question for boards is not whether to be green, but what happens when energy supply fails. Banking, manufacturing, and retail operations are all vulnerable to grid disruptions, and energy optimization technology directly addresses this exposure.
Commercial and industrial buildings account for 94% of the world’s total delivered energy and more than one-third of all greenhouse gas emissions.
“We want to be the world’s largest AI-led tech services company. Now 80% of the energy consumption across all our delivery centers is renewable. It used to be about 25% about five or six years ago,” he said.
TCS is part of the Tata Group, a conglomerate of more than 50 companies that has structured sustainability governance through its Alingana framework, meaning “embracing togetherness.” The framework requires every group business to manage decarbonization, circularity and nature and biodiversity, with each company setting its own targets and tracking progress monthly.
Food systems under strain
Kuralla was speaking at Economist Impact’s Sustainability Week in London, where Vijay Vaitheeswaran, global energy and climate innovation editor at The Economist, moderated a series of conversations on translating sustainability commitments into commercial outcomes. The session brought together voices from technology consulting, food systems research, investment banking and environmental law.
Pratima Singh, principal for policy, research and insights at Economist Impact, presented findings from the newly launched Resilient Food Systems Index (RFSI), a study mapping food security performance across 60 countries across four pillars: food affordability, availability, quality and safety, and climate risk responsiveness.
“We need to feed, but more importantly, nourish, 10 billion people by 2050. This is not a challenge that any one of us, or any one group, can solve on our own,” she said.
The index, supported by Cargill and built on over a decade of Economist Impact food security research, found that more than 673 million people face severe food insecurity, while 2.6 billion cannot afford a healthy diet. Portugal leads with a score of 76.8; the Democratic Republic of Congo scores 34.8. Even the top-ranked country falls well short of a perfect score.
“There is limited ability to scale agri-tech solutions. We heard a lot about AI and technology being the solution for climate and for food, but there is limited ability to scale some of these innovative solutions when very basic enablers like reliable electricity, the internet or other digital tools are not available and not yet universal,” she said.
Infrastructure is the binding constraint on food system resilience. The RFSI availability pillar scores an average of 58.3 across the 60 countries surveyed, with transport and logistics lagging in many nations, increasing post-harvest food losses. Climate risk responsiveness is the weakest pillar at an average of 56.4.
“We can only manage what we measure. We need to rethink the blueprint for food systems, because the challenges we are facing today and in the next few years are going to be very different, and we cannot use yesterday’s playbook to solve tomorrow’s challenges,” Singh said.
Capital and the courts
Chuka Umunna, global head of sustainable solutions and Europe, Middle East and Africa (EMEA) head of green economy investment banking at J.P. Morgan, told the session that geopolitical disruption has not weakened the investment case for sustainability; it has transformed its framing.
“Energy transition, energy security is the other side of the coin to national security and strategic autonomy. That has changed the way investors are looking at this,” Umunna said. “The AI tailwind is particularly driving interest in renewables. It means that people are overweight utilities, which they see can benefit from the growth of the grid as we need to upscale.”
Green economy stocks are up 89% over the previous 12 months, compared to the Nasdaq up 20% and the S&P 500 up approximately 15%. Two factors explain the outperformance: green economy stocks were disproportionately hit by the higher-interest-rate environment, so rate reductions have benefited them acutely.
Public assets under management in sustainability-focused funds stand at approximately $3.6 trillion, exceeding any previous high.
“In 2021 we set ourselves the goal to finance and facilitate two and a half trillion dollars to help drive delivery against the United Nations (UN) Sustainable Development Goals, and a trillion of that was very much aimed at helping with the transition. We have done over 900 billion dollars worth of financing against that goal on the green side, more than 310 billion,” he said.
J.P. Morgan subsequently set a goal to finance and facilitate $1.5 trillion to support industries driving the national security and resilience of the United States and its allies across five sectors: aerospace and defense, energy security and grid resilience, advanced manufacturing, frontier technology and pharmaceuticals. An initial $10 billion from the bank’s own balance sheet has been committed to equity investments in the space.
Laura Clarke, chief executive of ClientEarth, an environmental law organization, told the session that the legal landscape around corporate sustainability is undergoing a structural shift.
“What we are seeing from a legal and litigation perspective is moving from some of these climate and environmental responsibilities being more voluntary and discretionary to being a legal duty with real consequences if things do not go right,” Clarke said.
She identified three rising trends in climate litigation: greenwashing cases targeting spurious environmental claims; directors’ duties cases examining the personal liability of board members for climate risk; and polluter-pay cases holding corporates accountable for emissions, biodiversity loss and pollution affecting human health.
“Climate risk is a fact, and everyone needs to be planning for it, managing it, and finding the best way of doing that. There is a risk of being sued by a big oil company, but there is equally a risk of being held liable for not doing enough to look after the long-term commercial viability of your company,” she said.
“There are 2.1 million unplugged oil wells in the US leaking methane into the atmosphere, poisoning local communities. The reason is that big oil and gas owners make all the profit, sell the well to a shell company, and, just as that oil well needs to be plugged and made safe, that shell company goes bust. It is a systemic business model that evades the asset retirement obligation,” she said.
She cited the International Court of Justice (ICJ) advisory opinion on states' climate obligations, issued in 2024, as an authoritative statement now on the desks of judges and prosecutors worldwide.
She also referenced Luciano Lliuya v. RWE AG, in which a Peruvian farmer filed a claim for declaratory judgment and damages against RWE AG, Germany's largest electricity producer, establishing that a corporation can be held liable for its proportionate share of emissions-related damages. Victims of Typhoon Odette in the Philippines are currently pursuing a similar case against Shell.
Throughout the session, all four speakers pointed to the same conclusion: sustainability is no longer a question of intention but of execution, measurement, and accountability.
From AI-optimized energy systems and food security indices to green finance mandates and climate courts, the infrastructure for holding corporations to their environmental commitments is being assembled quickly.