FTSE Russell, the index business under London Stock Exchange Group, has received inquiries from clients about whether they need to reduce their profitable technology holdings due to environmental, social, and governance (ESG) concerns stemming from AI development goals within the tech sector. This forms part of a broader industry trend, as sustainable index and rating agencies continuously field investor questions about how AI's impacts on energy consumption and water usage may reshape the ratings of companies long considered ESG benchmarks.

Lee Clements, Head of Applied Sustainable Investment Research at FTSE Russell, noted that clients are beginning to ask whether the climate footprints of hyperscale cloud providers would automatically lower their weightings in sustainable indices. Approximately $330 billion in passive funds track FTSE Russell's sustainable indices, with the total assets benchmarked against these indices potentially being even higher.

FTSE Russell stated that it will assess sustainability risks for individual tech firms on a case-by-case basis for now. Clements mentioned that, when necessary, the index provider will "gradually adjust weightings between different technology companies" to reflect these risks, though FTSE Russell did not name specific companies.