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Brain Circuits

Management mythbusters: The AI vs sustainability trade-off 

Published December 3, 2025 in Brain Circuits • 4 min read

AI and sustainability are transforming the business landscape, yet many organizations treat the two as separate mandates, led by separate teams pulling in different directions. Instead, they must integrate these forces, using five principles for a twin transformation.

Checklist

  • Are we treating AI and sustainability as tech and compliance problems rather than strategic imperatives?
  • Are our AI and sustainability teams siloed in opposite ends of the building, rarely sharing a coffee, let alone a strategy?
  • Do the people leading digital innovation and those working in sustainability have different (and unaligned) incentives?

 

Unlocking the synergies

AI can help turn sustainability from a burden into a driver of efficiency, cost savings, and new business opportunities. Properly deployed, it can make sustainability efforts both smarter and more cost-effective. For example, it can:

  • Operations

Minimize energy consumption and waste through real-time monitoring and automated control systems.

  • Supply chains

Identify carbon-intensive nodes, model supply disruptions, and recommend greener sourcing and logistics alternatives.

  • Product and service innovation

Make offerings smarter, enhance design choices, and simulate lifecycle impact, aligning development with sustainability goals and competitive positioning.

  • Customer engagement

Personalize sustainability messaging, optimize incentives, and drive large-scale behavioral shifts.

 

Five principles for leading a twin transformation

  • Anchor in ambition

AI can’t just be about efficiency. Sustainability can’t just be about compliance. What’s the bigger opportunity your company is pursuing? Define a shared ambition that transcends departments and KPIs.

  • Break the silos

Create cross-functional teams that bring together AI, sustainability, operations, and commercial functions. Integration starts with collaboration, and accountability must be shared.

  • Invest in literacy

Equip leaders and teams with a working understanding of both domains. This doesn’t mean everyone should become a data scientist or a sustainability officer, but everyone should know enough to connect the dots.

  • Model the mindset

Senior leaders must demonstrate that this transformation matters. Celebrate experiments. Talk about failures. Reward cross-functional wins. Culture change starts at the top.

  • Tell the story

Strategy alone won’t inspire. Build a narrative that links tech and sustainability to human impact on your customers, employees, and communities. Make it real, make it relatable, and repeat it often.

 

Key learning

Treating AI and sustainability as complementary levers, not competing priorities, will make you more adaptive, more resilient, and more trusted by your stakeholders – and well placed to respond to the next wave of disruption.

Authors

Michael Wade - IMD Professor

Michael R. Wade

TONOMUS Professor of Strategy and Digital

Michael R Wade is TONOMUS Professor of Strategy and Digital at IMD and Director of the TONOMUS Global Center for Digital and AI Transformation. He directs a number of open programs such as Leading Digital and AI Transformation, Digital Transformation for Boards, Leading Digital Execution, Digital Transformation Sprint, Digital Transformation in Practice, Business Creativity and Innovation Sprint. He has written 10 books, hundreds of articles, and hosted popular management podcasts including Mike & Amit Talk Tech. In 2021, he was inducted into the Swiss Digital Shapers Hall of Fame.

Konstantinos Trantopoulos

Konstantinos Trantopoulos

Advisor and Research Fellow at IMD

Konstantinos Trantopoulos is an Advisor and Fellow at IMD. He collaborates with senior executives across global markets to shape strategies and guide investments that drive growth and profitability. His current focus is on how companies can leverage AI to create and capture value. His insights have been featured in leading outlets such as Harvard Business Review, MIT Sloan Management Review, California Management Review, MIS Quarterly, Το Βήμα, and Forbes. Konstantinos is also the co-author of Twin Transformation, available on Amazon.

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