Analyzing AI and ESG with Microsoft's Matt Sekol
Quick Connects are brief but beneficial conversations Mike Hower conducts with leaders in sustainability and ESG about a variety of sustainability communication topics. Watch the video recording of the conversation or read the transcript below.
With the explosion of new advanced artificial intelligence technologies erupting on the market in 2023, many corporate sustainability professionals find themselves wondering what this means for the future of sustainability and environmental, social and governance (ESG). These new technologies have the potential to disrupt how companies address social and environmental problems — but also come with their own challenges due to increased demands for energy use.
To gain insight into what’s happening with AI and other ESG trends in the tech sector, I connected with Matt Sekol, Sustainability Global Black Belt at Microsoft.
Mike Hower: Hey everybody, I'm here with Matt Sekol, Sustainability Global Black Belt at Microsoft. He probably has one of the coolest titles I've seen in sustainability. Matt and I met back at GreenFin early this year in Boston. And we're going to catch up today to talk a little bit about ESG trends and tech, and what he's seeing out there. Thanks for being here today, Matt.
Matt Sekol: Yeah, it's my pleasure. Thrilled to be having this conversation.
Mike: Great. First question is: what are some of the biggest challenges tech companies like Microsoft face when communicating ESG?
Matt: Yeah, this is a great question because tech has really been leading a lot of the narrative around sustainability.
And I think in my own opinion, it's largely because our core business value is directly tied with the green transition. We're all running huge data estates, which impact the energy being used to biodiversity of where those data centers are running and things like that. And so for us, we really have to get this narrative right, but to get the narrative right, we really have to do the work.
And so one of the interesting challenges that we had, I think it was in 2021, was after COVID hit. The world shut down. Companies experienced six years of digital transformation in six months. And what that meant for us is people were moving workloads into the cloud.
Consumers were also buying Xboxes because they were staying home. And so something interesting happened in that sustainability report after that, which was our scope three emissions went up and our revenue went up. So, for a tech company, I think it's really critical to get the narrative right. And we're really trying to make sure that we're addressing those issues holistically by doing things like investing in nascent carbon removal technologies, as well as a bunch of other projects so that we can stick with our commitments and realize that it's not a linear journey. Definitely not an easy story to tell, though.
Mike: Right. Yeah, I think that's something I'm seeing across the board, too. When you have substance to your story, the story is a lot easier to tell. So a lot of times companies struggle with communicating sustainability because they don't have much to say.
Right. And I have to say, uh, I love your background, big Lego fan. I'm loving the Millenium Falcon. I think I might have to go buy one later. All right, the next question:
What are some of the current ESG trends you're seeing across the tech sector writ large? I know it's been a tough year for tech overall, but what are you seeing now that we're kind of getting to the end of 2023?
Matt: Yeah, I think you probably know that Microsoft made a big kind of pivot into data and artificial intelligence this year, as did many of our peers. So one of the questions that's coming up is really interesting. It's about the environmental impact of artificial intelligence because these models require a lot of data. They require a lot of training to be accurate. These large language models, for example, but even climate risk models require a lot of data and a lot of training. And you certainly don't want to create more of a problem than you're trying to solve.
And so environmental sustainability and our Microsoft research team is actually looking into that to balance the training versus the carbon emissions, and we publish all this out and people can go check it out. But another interesting intersection with that particular topic in ESG is around the social.
And so with artificial intelligence and the amazing opportunities that it can bring comes a lot of risk. And if you pay attention to Microsoft, mostly the Microsoft president Brad Smith. He's been going around the world and talking with world leaders about the dangers of AI, but also the opportunities as well, because it definitely is a balance.
But we need both companies and governments really to get it right. If we're going to start democratizing access to social services and things like this at scale through artificial intelligence.
Mike: You're about to publish a new book. Can you tell us a bit about that? When will it be available and what should we be expecting?
Matt: Yeah, I am super excited! So, I graduated from Penn State with an English degree a long, long time ago. So this is my first book. It's a book For corporates about ESG, because when I was coming into this topic myself, I found that a lot of the books were very much focused on financial services and ESG investing in sustainable finance.
And even some of the coursework at the time was mostly focused on that area. And, that is where ESG started. It really started off as a financial services concept with the UN, but corporates were ultimately always at the center of it. Yet nobody went to corporates and said: “Here's really what ESG is, and here's how it drives business value.”
Even beyond doing well and doing good, there's business value here, there's also trade offs you need to consider, and just something drew me to it because you can turn ESG issues over 10 different ways and always see different angles, and there's no certain answers. So what the book tries to do is explain the complexities.
Help management teams and individual contributors understand the tradeoffs and how to think about the interconnected nature of the acronym in order to build a business defensible position for some of the storytelling that you do, frankly, but also addressing the crazy web of interconnected risks that are out there.
It comes out in April. It's called ESG Mindset. If you don't mind me saying it's available for pre order at your favorite book outlets. I'm super excited about it.
Mike: Great. We'll include the link, in the, the description so people can see. Definitely will be checking that out. All right. Thanks, Matt.
Learn more about Matt’s upcoming book “The ESG Mindset” here.
