Nine-in-10 Canadian companies called sustainability a top strategic priority, a survey commissioned by Microsoft and Kyndryl has found, but more retreated on their planning and actions compared to last year.

In the 2025 Global Sustainability Barometer Study published last week, 67 per cent of the 60 Canadian companies included in the report maintained or advanced their sustainability goals and program execution, compared to 96 per cent in 2024.

However, the Canadian cohort edged out the global average; 65 per cent of the 1,286 companies which participated in the report, from 20 countries, reported holding on to or improving their sustainability goals and program execution.

Few Canadian companies reported financial gains from implementing a sustainability agenda — 85 per said there were no such benefits yet. The remainder reported gains from lowering operational costs, attracting and retaining customers, improving product design and innovation, and launching new products, services, or entering new markets.

This is despite 73 per cent of the Canadian organizations already seeing or expecting sustainability measures to reduce operational costs and improve efficiency. Under half said a sustainability agenda helps to meet regulatory requirements and avoid legal and reputational risk (47 per cent), or manage climate and operational risks (42 per cent).

Kyndryl, a New York-based information technology (IT) services company, and Microsoft commissioned Singapore-based Ecosystm to examine how technologies such as artificial intelligence (AI) are being used to promote environmental sustainability. Over 60 per cent of Canadian companies surveyed said they are piloting or considering adoption of agentic AI tools for sustainability.

“We’re seeing more leaders connect policy, people and purpose – embracing technological insights and agentic AI – to drive impact and not just report on sustainability,” Faith Taylor, senior vice-president of global citizenship and sustainability at Kyndryl, said in a release accompanying the report.

How tech is being embedded for sustainability

Despite the perceived positives of sustainable actions, two-in-three Canadian businesses said the lack of clear return on investment and difficulty measuring impact was the biggest barrier to implementation.

When asked whether digital solutions that improve resource efficiency and lower environmental impact are being actively prioritized and mandated across corporate operations, 23 per cent of Canadian companies said fully, 55 per cent said to an extent, and 22 per cent reported not at all.

The most popular actions a company’s IT or technology team rolled out to reduce its carbon footprint were:

• energy-efficient hardware and systems design (73 per cent);
• financial operations and cloud cost optimization (65 per cent); and
• server virtualization, consolidation and cloud migration (60 per cent).

The least adopted were:

• data centre heat recovery and reuse (22 per cent);
• AI operations for automated IT efficiency and resilience (22 per cent); and
• sustainable IT procurement policies (17 per cent).

In the middle were sustainable software engineering (55 per cent), and sourcing renewable energy for IT operations (48 per cent).

How AI tools are being used for sustainability

AI emerged as a central topic in the report.

“Organizations today have the opportunity to overcome longstanding challenges in bridging strategy and execution” through predictive and agentic AI, Sash Mukherjee, vice-president of industry insights at Ecosystm, said in the release. Predictive AI can anticipate risks, while agentic AI can provide advice in real-time, she said.

Seven-in-10 Canadian companies said they used predictive AI to identify and analyze high-impact processes and inefficiencies to target sustainability interventions. To detect real-time anomalies in emissions or resource use, 63 per cent reported using predictive AI. Six-in-10 used predictive AI to forecast resource use and emissions to anticipate the future impact.

However, agentic AI use for sustainability remains in its early adoption stage among Canadian businesses. Only three per cent of those surveyed reported deploying agentic AI for sustainability. Canadian companies trailed globally, where nine per cent said they were deploying agentic AI for sustainability.