Sources: Huawei, AVEVA, Cisco.years, the global market for AI is expected to expand by 169%, driving AI data centre capacity to grow at over 40% a year.106 This demand for data centres not only increases the need for reliable and renewable energy but also puts a strain on local water supplies, including potable water. Water is used in data centres both to generate power and as a liquid coolant. In 2021 data centres were already ranked in the top ten water-consuming industrial and commercial sectors of the United States.107 The largest data centres in development today could use up to 600 million litres of water a year. In 2027, global AI demand could lead to the withdrawal of 4.2-6.6 billion cubic metres of water – about half the annual withdrawal of the United Kingdom.108 The power of AI to accelerate solutions the world needs is increasingly clear but competition for limited resources in local communities underscores the need for the technology sector to continue to innovate on efficiency, resilience and adaptation strategies. For example, through energy efficient hardware design, data selection criteria, efficiencies in AI model training and tuning, new cooling solutions such as immersion or direct-to-chip cooling and water recycling, the resource footprint of AI can be significantly reduced. Recommendations to build industry and societal resilience in the technology system The following recommendations give technology businesses an array of solutions where they can take the lead and manage growing risks from climate hazards in the technology system:Conduct end-to-end assessments across the value chain to identify systemic risks from climate hazards –Prioritize the development and implementation of energy efficient infrastructure, such as communications networks and data centres that are also designed to withstand extreme weather conditions. –Cloud, AI and internet of things (IoT) technologies can support the industry to develop risk assessments and build their own supply chain resilience to ensure operational continuity and sustainability in the long-term. Partner with technology providers to develop circular business models that reduce pressure on scarce resources –Work closely with technology suppliers to create circular business models that prioritize resource efficiency and sustainability. This includes establishing reverse logistics for the reuse and recycling of electronic devices and components. –Enhance resilience against supply chain disruptions caused by climate hazards, by reducing reliance on scarce resources and creating more decentralized refurbishment operations. Invest in and collaborate on technologies and approaches to enhance community and supply chain resilience –Focus on developing and implementing early warning systems and visualization tools to educate and inform societies. –By doing so, provide critical information to the communities served by technology, enabling better local preparedness to emerging climate hazards. Adaptation case studies in the technology system FIGURE 18 1 Huawei Huawei’s trade-in and recycling initiatives promote sustainability by recycling electronic devices and offering economic benefits to consumers. By the end of 2021, Huawei’s global recycling system included 2,000 centres in nearly 50 countries, processing over 8,600 metric tons of e-waste. Huawei extracts raw materials from discarded devices, significantly reducing e-waste and conserving resources.2 Aveva AVEVA is involved in developing circular business models that reduce pressures on scarce resources. The company focuses on creating connected data ecosystems for industries like batteries and electric vehicles (EVs), which include reverse logistics and the reuse of components. For example, AVEVA’s solutions help manage the lifecycle of EV batteries, from production to recycling, ensuring efficient use of materials and minimizing waste.3 Cisco The Cisco Foundation has committed $100 million over 10 years to fund non- profit grants and impact investments in climate solutions. This funding supports innovative projects aimed at building resilient ecosystems, promoting clean energy and advancing sustainable infrastructure. Business on the Edge: Building Industry Resilience to Climate Hazards 35

Business on the Edge 2024