There are wide-ranging implications for other sectors and industries related to deployment of AI. But AI’s intersections aren’t limited to the worlds of business and finance. It also has ample utility when it comes bolstering sustainability.
That indicates tech-heavy environmental, social, and governance (ESG) exchange traded funds such as the Invesco ESG Nasdaq 100 ETF (QQMG) have credibility as avenues for leveraging the AI/sustainability combination. In fact, QQMG could be one of the ideal ways to play that theme. That’s because the ETF follows the ESG derivative of the Nasdaq-100 Index (NDX) — a benchmark that’s home to an array of AI equities.
Broadly speaking, ESG investing is coming off a rough two-year stretch in which it became politically polarizing and arguably controversial to some market participants. Still, many of the investors who consumed those headlines are enthusiastic about AI and sustainability, indicating there’s an audience for funds like QQMG. The ETF has answered the bell, gaining 26% this year.
AI, Sustainability Could Be Potent Combination
Data confirms that sustainability is still on the radar of executives, including those making tech decisions for their companies. IBM’s recently released State of Sustainability Readiness Report 2024 indicates 88% of those polled are planning on making tech investments with an eye toward sustainability over the next 12 months.
Such expenditures could benefit any number of QQMG holdings. But adding to the long-term case for the ETF is the point that many executives see value in the AI/sustainability combination.
“Almost universally, respondents had a positive take on AI’s potential for sustainability: 9 out of 10 surveyed executives agree that AI will positively influence achieving their sustainability goals,” according to IBM.
More than half of those queried acknowledge that they’ve yet to leverage AI for sustainability initiatives. Nearly the same amount view tech-related sustainability investments as one-offs. The silver lining is that those percentages imply room for growth.
Additionally, some corporations view AI as essential to their sustainability plans. That outlook that could bolster AI’s ESG credentials over time.
“To responsibly tap into the potential of AI, organizations also need to account for the energy use it demands—something leaders are trying hard to mitigate. This new trend of AI adoption is galvanizing organizations to employ more sustainable practices, such as optimizing data processing locations, investing in energy-efficient processors and leveraging open-source collaborations. These strategies can not only reduce the environmental footprint of AI, but also enhance operational efficiency and cost-effectiveness,” added IBM.
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