ESG Impacts of ChatGPT
Taking a look at ChatGPT’s potential benefits and its influence on environmental, social, and governance (ESG) efforts.
Since its inception in November 2022, ChatGPT has quickly become a global phenomenon. According to an analysis by Swiss Bank UBS, ChatGPT is the fastest growing software product of all time. In January, only two months after its launch, the same analysis estimated that ChatGPT had 100 million active users. In comparison, it took nine months for TikTok to reach the same number of active users. Many have embraced ChatGPT for a range of activities, from writing poetry and cooking recipes to building apps and creating travel itineraries.
What is ChatGPT?
ChatGPT is a highly popular artificial intelligence chatbot developed by OpenAI, which uses natural language processing technology to generate human-like responses and interactions. While ChatGPT has many potential benefits, it also has various impacts on environmental, social, and governance (ESG) factors.
What are the impacts on ESG?
Environment
ChatGPT is related to energy consumption required for training and running the model. Given that training large models like ChatGPT takes an enormous amount of computational power, the energy consumption and carbon emissions from data centres could be significant. Third-party research suggests that ChatGPT’s training may have emitted 552 tons of CO2, while the daily carbon footprint from running the system could be around 25 tons. To put it into perspective, flying from Melbourne to Perth generates 0.8 tons of CO2 per traveller. For perspective, 552 tons of CO2 is equivalent to a single person taking 345 round trips between Melbourne and Perth. These figures are significant and there are ongoing efforts to reduce the environmental impact of AI technologies and promote sustainable computing practices.
Social
Socially, ChatGPT’s impact both positive and negative. For example, it can be a powerful tool for education by allowing students to receive instant responses to their questions. However, there’s concern that students may use the tool to complete assignments and essays, leading to plagiarism and fair assessment issues. Additionally, while ChatGPT can help automate customer service and improve response times, its ability to perform certain tasks may lead to job losses and role changes in some industries. There are also concerns about potential biases, data privacy and security, and the social consequences that could arise from widespread dependence on AI-generated interactions.
Governance
In terms of governance, there are ethical concerns about the AI chatbot’s potential to disseminate misleading information. OpenAI has created a code of conduct for developers to follow, but there are concerns about how ChatGPT may be used, along with unintended consequences. While the chatbot is celebrated for its ability to generate convincing text, it may be less sophisticated at screening for truth.
Summary
The current ChatGPT phenomenon presents a tipping point for the future of AI technology. This transformative change will undeniably have impacts on ESG considerations, but this impact largely depends on how it’s used and potentially regulated going forward.
While there are rising concerns about energy consumption, potential biases, and social impacts, integrating AI into our lives has the potential to bring about positive change, as long as we consider both ethics and privacy. As we see technology evolve, it’s important for us to continue to have discussions about the potential impacts of AI on our companies, our industry, and our society as a whole.
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