Strong executive focus, IT teams increasingly driving environmental outcomes, yet AI stewardship is down, ROI and data challenges stall progress
Kyndryl, a leading provider of mission-critical enterprise technology services, in collaboration with Microsoft, today announced the Australian findings of the third annual Global Sustainability Barometer Study, conducted by Ecosystm.
The study shows technology is now central to climate action in Australia as technology and sustainability functions converge. Alignment between sustainability and IT teams sits at 62%, and 43% of Australian organisations say technology teams drive environmental outcomes across the enterprise. At the same time, 62% of organisations now report on environmental sustainability performance, with 58% either doing so voluntarily or without public disclosure. By connecting departmental objectives, empowering employees and engaging stakeholders, these leaders move sustainability from a compliance exercise to a driver of business value and lasting impact.
Executive focus is high, impact uneven
Australian organisations are treating environmental sustainability as a board-level priority, yet many still struggle to turn their goals into measurable impact, particularly when using AI and data to drive action. 95% of organisations rate environmental sustainability as a top strategic priority, and 50% say they are driving sustainability through proactive or consistent initiatives. However, only 15% have embedded sustainability as a core driver of innovation, cost savings and long-term resilience.
“Technology is now at the heart of climate action in Australia. We are seeing IT teams step up as key enablers of sustainability outcomes,” says Erandhi Mendis, Social Impact, Government Affairs and Policy Leader, Kyndryl ANZ. “The next step is to move beyond isolated energy efficiency wins. Organisations need to embed sustainability into modernisation decisions, fix data integration, and use AI responsibly and be climate-aware to turn goals into measurable results.”
Sustainability progress slows amid Climate Bill uncertainty
Meanwhile environmental sustainability programs have slowed, with the share of organisations maintaining or advancing initiatives falling 25%, partly due to uncertainty around pending climate legislation. Last year, all surveyed organisations intended to maintain or advance initiatives in anticipation of the Climate Bill. With the Bill now passed, businesses are expected to refocus on embedding measurable climate impact into their AI strategies.
AI use is rising, but climate stewardship is down
Yet only 20% of Australian businesses currently consider the environmental impact of AI – down from 35% last year and well below the global average of 43%. For now, regulatory and operational priorities continue to emphasise safety, accountability, and efficient infrastructure over carbon footprint considerations.
Australian organisations are increasingly using predictive AI to monitor, report, and improve sustainability performance, with 53% forecasting resource use and emissions and 52% anticipating climate risks. However, only 37% leverage AI centrally to inform environmental decision-making, highlighting a gap between early adoption and fully integrated sustainability strategies.
“The 2025 Global Sustainability Barometer Study shows that more than half of leading organisations now use predictive AI to anticipate and act on sustainability challenges – rather than just to track and analyse – making forward-looking intelligence central to sustainability strategy,” said Ricardo Davila, GM, Enterprise Partner Solutions, Microsoft. “We’re proud to partner across the ecosystem to help every organisation turn sustainability into a data-driven operating capability.
Agentic AI adoption for sustainability remains in its infancy in Australia: 48% of organisations have yet to incorporate it into their sustainability plans, 21% are piloting or deploying it, and 13% are unsure of its relevance.
“Organisations today have the opportunity to overcome long-standing challenges in bridging strategy and execution,” said Sash Mukherjee, Vice President, Industry Insights, Ecosystm. “Predictive and Agentic AI create a closed-loop system where insight meets action. Predictive AI anticipates risks, while Agentic AI responds in real time, turning strategy into execution. When technology and business strategy align, organisations can truly embed measurable environmental outcomes into everyday operations.”
Further Australia findings:
? Investors get louder, employees quieter: Compared to last year, investors and shareholders have become the leading influence on Australian companies’ environmental actions, surpassing customers, employees, and regulators, with 57% of businesses citing them as the strongest voice.
? Financial gains: 53% of organisations report financial benefits from environmental sustainability investments, primarily through operational efficiency, customer retention and new market opportunities.
? ROI drives sustainability progress: 57% of organisations cite unclear ROI and difficulty measuring impact as key barriers; yet only 33% currently use environmental data to guide decisions – a step that would directly address this challenge. Among organisations that accelerated sustainability in the past year, 45% did so after proving a stronger business case, clearer ROI or new revenue.
? Data hurdles are structural: 58% of organisations struggle to collect data from internal systems, 42% to integrate with business systems, 37% to access external data, and 35% contend with missing or incomplete information. Gaps in infrastructure and processes are blocking reliable AI insights.
? Sustainability an after-thought in modernisation: Only 23% of organisations fully utilise digital solutions to improve sustainability. 18% of organisations have sustainability criteria clearly weighted in all major tech selections, while 40% do not have these criteria at all.
? Organisations still focused on ‘quick wins’: 78% of organisations focus on energy-efficient hardware and systems, 63% server utilisation and consolidation and 60% FinOps. Lifecycle actions lag at 33% for heat recovery and reuse, 28% for extending asset life and e-waste, and 22% for sustainable IT procurement.
About the Global Sustainability Barometer Study
The third edition of the Global Sustainability Barometer Study, conducted by Ecosystm and commissioned by Kyndryl and Microsoft, reflects the perspectives of 1,286 enterprise leaders spanning 20 countries and nine industry groups. Conducted between August and September 2025, this study aims to provide a comprehensive view of how integration, strategy, and technology are transforming sustainability from compliance to competitive advantage.
Learn more about the study, From Planning to Progress: AI-Driven Sustainability in Practice.
About Kyndryl
Kyndryl (NYSE: KD) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world’s largest IT infrastructure services provider, the company designs, builds, manages and modernizes the complex information systems that the world depends on every day. For more information, visit www.kyndryl.com.
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