How artificial intelligence and machine learning can make your business more sustainable

  • AI can help SMEs be more sustainable in many ways, from reducing energy use to optimising transport and logistics.
  • Many applications have low or even no upfront costs. Systems are available on a subscription basis.
  • More sophisticated applications can often be built with partners. Investment may be needed - but may qualify for “super deduction” tax relief.

Sustainability is a key focus for many SMEs – with a resounding 89% saying it was important to their business in a 2021 Lloyds Bank survey. And artificial intelligence (AI), until recently the preserve of large firms with specialist data teams, can now help SMEs achieve their sustainability objectives.

AI, a broad term that includes machine learning (ML), has connotations of a robotic future, not a green one. But for many firms, sustainability is about driving efficiency, and the latest AI tools can enable even the smallest firms to make their operations more effective.

For many businesses, reducing energy usage is an important first step. With rising energy prices, the case for investing in energy efficiency has never been stronger - and there are many off-the-shelf products and services that use AI to get energy usage as low as possible.

Whether it's controlling heating in offices, or energy use in an industrial process, they all 'learn' about energy usage patterns to minimise waste.


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AI Activity in UK Business, estimates, January 2022

In effect, they're scaled-up versions of Google's Nest and other smart home thermostats. But there is one crucial difference - they are often designed not by US tech giants, but by UK firms, some of them SMEs, that understand the challenges small businesses face.

Some of these firms have received government help to build their products under the Catapult or other government funding programmes. Launching the National AI Strategy in September 2021, Chris Philp, Minister for Tech and the Digital Economy, made it clear that the "10-year plan to make the UK a global AI superpower" includes a drive to help small firms use AI to help them compete.

While improving energy efficiency is one way for AI to help firms become more sustainable, other measures include:

  • Intelligent transport scheduling packages that can minimise miles travelled by delivery fleets;
  • Machine vision and other systems that can analyse and reduce food wastage in commercial kitchens;
  • Predictive maintenance that maximises the useful life of equipment;
  • AI tools that can quickly provide an estimate of all CO2 emissions from a business, including from the supply chain, allowing clearer management of the sustainability journey.

All of these tools can be deployed without high upfront costs. A long list of software providers now offer AI-powered services to SMEs on a subscription basis, thanks to cloud computing.

An  EY report for the government, on AI in business, published in July 2021, noted that some firms may already be deploying AI in packaged products or services, without even knowing it.


Why SMEs need help with AI for sustainability

However, more substantial uses of AI come with challenges that need to be overcome. While AI excels at repetitive tasks - where data can be gathered and analysed to improve efficiency - SMEs typically have small-scale workflows that are harder for AI to improve.

A small manufacturer wanting to use ML to improve quality control and reduce raw material wastage, for example, may find customisation or development is needed because their processes are unique.

Some SMEs have partnered with local universities, tech accelerators, or other innovation centres to create custom AI applications.

One firm producing timber products, for example, worked with Cardiff University to reduce its 3,000 delivery journeys a year. Its products are large and not of standard shapes, and a bespoke AI package enabled them to be packed more efficiently into trucks, Tetris-style, than experienced warehouse staff could.

How SMEs can overcome the challenges of AI

SMEs using specialised AI to help them be more sustainable can encounter barriers such as costs and perceived risks, along with challenges in finding staff with the right skills.

However, the AI in UK Business report estimates that around one-third of SMEs using AI have developed in-house applications, with a further 15% creating bespoke systems using outsourced developers.

While development will be an upfront cost, if incurred before March 2023, firms may qualify for the 130% “super deduction” capital allowance - a 25p tax cut for every £1 spent.

Firms may also benefit from the Digital Manufacturing on a Shoestring project, run by the universities of Cambridge and Nottingham, that helps SMEs with small budgets use advanced technology with low risk.

Another route is to experiment with a growing number of low-code or no-code platforms, which can help engineers and developers with no specific AI experience put the technology into action. For instance, Microsoft’s Lobe image recognition system  can be downloaded and run on a £100 computer system.

There are also online training courses to help managers deal with HR or ethical issues that may emerge if AI becomes more pervasive in the firm (such as Sustainable AI in Business from Agora, produced with EU funding).

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