In its latest impact report, Union Bancaire Privée (UBP) explores the dilemma AI’s rapid expansion poses to impact investors.
As artificial intelligence (AI) adoption continues to grow, its surging energy demands could threaten to derail corporate net-zero commitments. Yet, alongside these risks, AI is also emerging as a tool to support biodiversity preservation, such as sustainable farming practices, according to Swiss asset manager Union Bancaire Privée (UBP).
During a roundtable in London to present its latest impact report, UBP explored this duality, highlighting both the emissions intensive nature of AI infrastructure as well as its potential as a driver of sustainability solutions.
“AI is rapidly transforming the landscape of equity investing,” the report said. “For positive impact investors, AI presents a powerful enabling technology, one that, like electricity or the internet, can be used for both good and bad depending on how it is applied. Our focus is on how AI can serve as a catalyst for positive social and environmental outcomes while generating sustainable financial returns.”
Mathieu Nègre, UBP’s head of impact investing, said: “AI has created a few dilemmas for impact investors and has created a huge source of increasing power that is causing companies like Microsoft to backtrack on their climate plans.”
Despite these challenges, UBP points to examples of AI driving positive change in sectors such as agriculture. One current example looks at John Deere’s AI-enabled ‘See & Spray’ technology which cuts herbicide use by nearly 60%, something UBP considers to be a breakthrough in sustainable farming. Meanwhile, climate solutions provider Trane Technologies is deploying AI-powered digital twins, a virtual representation of a physical object or system, to optimise energy use across its asset base, reducing emissions at scale.
Another example is the work being done by nature data provider Nature Alpha, which is using AI to overlay geospatial data with corporate asset locations, enabling more accurate assessments of nature-related risks. According to UBP, these tools can help investors align their portfolios with emerging biodiversity frameworks and better manage exposure to ecosystem degradation.
“We’re not focused on backing the firms building AI itself,” Nègre said. “Instead, we’re targeting companies applying AI in ways that generate measurable environmental and social benefits.”
UBP said it views AI as an “enabling technology” and is directing capital towards improving the sustainability of AI infrastructure, such as data centre efficiency and chip manufacturing. But the firm said it sees the most promising developments at the application layer, where AI is embedded into solutions tackling real world challenges, from healthcare and education to financial inclusion and climate resilience.
However, the report warns that AI’s rapid adoption comes with risks. Models trained on biased or incomplete datasets may perpetuate inequalities, underscoring the need for strong governance and oversight.
“The rise of AI driven decision making underscores the importance of transparency, explainability, and alignment with evolving regulatory standards,” the report concluded.
