AI is booming – but is it responsible?

At Royal London Asset Management, we believe artificial intelligence (AI), must be developed and used in a way that respects people, protects the planet and supports long-term value creation.

That’s why we’ve published our Sustainable and Ethical AI Investor Expectations Report.

Download the Sustainable and Ethical AI Investor Expectations Report

AI isn’t just a tech story - it’s an investment story.

Energy demand is surging: Global data centre and AI electricity use could more than double by 2026, reaching over 1,000 TWh, that is roughly the annual power use of Japan.

Why does this matter

1. Real-world risks are growing. Poorly managed AI can lead to bias, AI hallucinations, privacy breaches and reputational damage.
2. Financial impacts are real. Weak AI governance can result in fines, litigation and higher costs, potentially undermining long-term returns.
3. But there’s also a big opportunity. Done right, AI can drive innovation, improve efficiency and support more resilient businesses.

What we’ve been doing

We have developed a clear set of sustainable and ethical AI investor expectations to guide how companies manage the risks and opportunities of AI as it scales.

We’re now using this framework to assess companies across the AI value chain, from developers to deployers, helping us identify where standards are improving and where more progress is needed.

This insight feeds directly into our engagement with companies today, focusing on strengthening governance, improving transparency and addressing AI’s growing environmental impact.

While we’re seeing early signs of progress, a clear gap remains between setting AI principles and putting them into consistent, real‑world action, which is why we’ve set out our expectations in more detail.

A call to action

AI is reshaping the investment landscape and increasing the importance of effective stewardship. For asset owners and asset managers, the question is no longer whether AI matters, but how well companies are managing it.

Those that demonstrate strong governance, responsible use and a clear understanding of environmental impacts are more likely to adapt, build trust and deliver sustainable long-term value.

Those that can’t use AI responsibly risk falling behind.

That’s why clear, practical expectations are needed now - to help distinguish between companies that are prepared for an AI‑driven future, and those that are not.

Download the Sustainable and Ethical AI Investor Expectations Report

Royal London Asset Management engages with companies as part of its responsible investment and stewardship strategy, aiming to drive long-term value for clients while promoting sustainable business practices. 

Our voting, engagement and advocacy activities are designed to be pragmatic, informed by research, evolving market insights and local best practices, and aligned with the long-term interests of our clients. These activities aim to enhance the value and integrity of our investment decisions. 

Please note that voting and engagement practices may not apply uniformly across all Royal London Asset Management funds or strategies, as each have distinct investment objectives. Please refer to the investment documents for specific details. 

For professional investors and qualified investors only.  This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance.

The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change. Forward looking statements are subject to certain risks and uncertainties. Actual outcomes may be materially different from those expressed or implied.