On the first day of US President Donald Trump’s second term in office in January 2025, he withdrew the US from the Paris Climate Agreement, demonstrating the incoming administration’s lack of interest in climate action. The agreement set out vital points necessary to combat climate change, such as decreasing greenhouse gas emissions by 43% by 2030 and limiting the global temperature increase to 1.5%.

The agreement also highlighted that developed countries should support developing countries financially through technology development and transfer, and lend capacity to countries that cannot deal with the many challenges related to climate change. This call for collaboration is one of the reasons for Trump’s withdrawal, as his administration aims to put Americans first in international environmental agreements. Environmental policies can also affect corporate policies, as many companies globally have released environmental statements or policies that they wish to implement.

Without US government pressure, initiatives will be lost

According to GlobalData’s Strategic Intelligence: ESG Sentiment Polls Q4 2024 report, 45% of respondents indicated that the primary reason a company would set up an environmental, social and governance (ESG) performance plan would be legislation and pressure from the government. Without pressure from the US government, where many healthcare companies are based, progress in ESG, especially positive environmental initiatives, will be lost.

Trump’s withdrawal from the Paris Climate Agreement also comes during a time of increased AI initiatives in healthcare, with the market forecast to be worth an estimated $1 trillion by 2030, according to GlobalData’s Thematic Intelligence: Artificial Intelligence in Healthcare (2024) report. Global AI energy demand is expected to increase to at least 10 times the current level by 2026 according to the International Energy Agency 2024 report. Since AI processors need to be cooled with clean water, companies have significantly increased their water usage with the increase in the use of generative AI. Combined with the rising global temperature, scarcity of clean water and decreased environmental sentiment from the US government, companies must take initiatives to balance AI usage with future healthcare advancements and its environmental impact.

A total of 58% of ESG sentiment respondents surveyed in the fourth quarter of 2024 believed that ESG policies are performative in most companies and that such initiatives are typically created due to government pressures. It is vital that healthcare companies mitigate negative environmental impacts. The basis of healthcare companies is to provide exceptional and innovative care to patients.

AI processors are water-cooled, significantly boosting usage

However, patient care does not end at the hospital or clinic. The impacts of a warming global climate, such as limiting access to clean water, increased air pollution and declines in agriculture diversity, are directly linked to poorer patient health. Thus, the healthcare industry needs to be involved with the aspects of patient care that extend outside of the hospital, such as preventative care, and a healthy recovery environment for patients is part of the patient journey. The decline in healthy foods due to changes in the climate impact farming, and decreased air and water quality will directly result in the overall population being less healthy, leading to more patients utilising healthcare systems. 

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Tech giants Meta, Microsoft and Google have promised that they would mitigate their environmental impact by replenishing more water than they consumed by 2030, but it is unclear how feasible that goal is, since clean water is a limited resource. It is also unclear who would enforce the target. According to Google’s 2023 Environmental Report, the company used 5.6 billion gallons of clean water for its data centers in 2022, and replenished 271 million gallons of water – only 6% of its freshwater consumption. With the Trump administration rolling back important climate change commitments, companies have less incentive to follow through with ESG goals. Thus, stakeholders and companies may focus on company revenue over ESG initiatives because many do not see their innate benefit or the fact that long-term company success should involve environmental protection.

AI usage must be balanced with its environmental impact

In most consumer markets, end-users have purchase power. When consumers want to purchase more from eco-conscious companies, they can do so. However, when it comes to healthcare, hospitals and doctors have more say. For example, hospitals purchase devices without much concern about their environmental impact, prioritising cost to the hospital and typically health insurance reimbursement. Patient-facing bodies and healthcare companies should balance the needs of patients with using AI for personalised care, and spearhead the incorporation of strong environmental policies into practice.

AI has advantages in healthcare, such as choosing the most effective treatment for patients, optimising patient triage in emergency care and streamlining manufacturing capabilities to limit waste and optimise storage. However, AI-led innovation needs to be balanced with its environmental impact, as current methods, such as those to mitigate carbon emissions, have not been completely successful.