Sustainability concerns emerge as a barrier to AI adoption for SMEs

AI is increasingly being presented as a way for businesses to save time, improve productivity and get more done with fewer resources. Yet adoption among small businesses remains relatively low, with new research finding that just 31% of UK small business owners are currently using AI to support their operations.

A lack of interest in the technology is one factor, with 27% saying they have no plans to use AI, and a further 21% saying they don’t consider it relevant to their business. But sustainability concerns are also playing a role. Among small businesses that do not currently use AI, almost one in four (22%) say they are concerned about the energy and natural resources it uses.

This is particularly interesting given the continued focus on sustainability among small businesses. Almost a third (31%) say sustainability is core to their business culture and planning, while 38% say they are taking practical steps on sustainability this year.

Where environmental concerns are highest

Concerns over energy and resource consumption vary noticeably across regions and sectors. Small business owners in the West Midlands are the most cautious, with 36% raising sustainability concerns about AI, followed closely by Scotland at 31%. 

Business owners in the East Midlands (28%), the North West (27%), Wales (22%), and Yorkshire and the Humber (20%) also highlighted environmental impact as a notable issue.

By sector, media enterprises lead the concerns, with almost half (43%) of non-users pointing to the energy demands of AI tools as a key reason for their refusal to use it. Education follows at 33%, with transport and distribution (28%), medical services (26%), manufacturing (24%), and agriculture (23%) all reporting similar worries.

Aligning technology with green priorities

The hesitation surrounding AI comes at a time when many small businesses are actively working to reduce their environmental impact, with sustainability already influencing practical decisions about how many businesses operate and use their resources.

The most common steps being taken this year include improving packaging, waste, and recycling policies (36%), investing in energy-efficient equipment and infrastructure (15%), and reviewing premises energy usage (14%). 

It makes sense that businesses actively tracking their own energy consumption might be somewhat wary when it comes to adopting software known for high resource usage, and may feel that using AI would be counterproductive to their broader goals.

Interestingly, this emphasis on doing the right thing for the environment is happening at a time when many small business owners are already feeling stretched on time, money, and capacity. Yet, despite these ongoing operational pressures, a significant portion of owners are still actively choosing to pass on AI, even if it could help ease their workload.

Sustainability is about people, too

For many small businesses, sustainability extends beyond energy and waste to the social side of running an enterprise, and this may be shaping attitudes to AI as well. Notably, 17% of small businesses surveyed say they are taking steps to create jobs locally this year, suggesting that community impact and employment sit alongside environmental goals as sustainability priorities.

This context makes another finding easier to understand: among small businesses that don't currently use AI, 59% say their enterprise is built on the enduring power of strong human relationships. For firms where personal connections with customers, clients and suppliers, as well as the people they employ, are central to how they operate, a technology framed around automation may feel at odds with what makes the business work.

This research suggests that hesitation around AI isn't simply a matter of energy use. For a significant share of small businesses, both the environmental and the human cost of the technology are being weighed up, and for now, many are concluding that the way they already do business serves them, their communities and their sustainability goals better.