As industries worldwide embrace digital transformation, the intersection of artificial intelligence and sustainability is emerging as a powerful force reshaping business strategies. Companies are no longer just optimizing operations for efficiency—they are rethinking entire business models to align with environmental sustainability and service-driven innovation.

One of the most promising advancements in this space is green servitization—the strategic shift from selling products to offering sustainable services, enabled by AI-driven insights and decision-making.

In my latest study, published in the International Journal of Production Economics, my co-authors and I explore how AI capabilities enhance green servitization, focusing on three key mechanisms:

• Supply Chain Alertness – AI-powered decision support systems provide businesses with real-time insights to identify risks, inefficiencies, and sustainability opportunities across the supply chain.
• Resource Orchestration– AI helps companies strategically allocate resources, optimize asset utilization, and integrate circular economy principles into business operations.
• Re-Institutionalization – AI supports long-term transformation by embedding sustainability into corporate culture, policies, and governance structures.

 

I have established and advanced institutional entrepreneurship for sustainability together with colleagues over the years. This research builds upon my ongoing work, extending these frameworks to incorporate emerging digital technologies. The findings provide practical insights for business managers, supply chain leaders, and executives looking to leverage AI for sustainability initiatives.

 

In the Business Sustainability Fundamentals Executive Education Programme I designed and delivered at Clinton Leadership Institute, I have covered key topics like circular economy, digital sustainability, resource orchestration and institutional entrepreneurship for sustainability. Now why do businesses need to know of green servitization. How does it matter for business leaders?

 

Green servitization is not just a sustainability effort—it is a competitive strategy. Organizations that adopt this approach can:

• Reduce environmental impact – Shifting to service-based business models helps minimize waste, extend product lifecycles, and optimize energy use.
• Enhance operational efficiency – AI-driven analytics improve predictive maintenance, inventory management, and supply chain agility.
• Meet regulatory & customer expectations – Governments are tightening sustainability regulations, and consumers are demanding eco-friendly products and services.
• Unlock new revenue streams – Circular economy strategies, such as leasing, subscription models, and pay-per-use services, open up new market opportunities.

 

With 248 UK supply chain man­agers surveyed in the study, we found out AI-driven decision support systems capabilities significantly enhance supply-chain alertness, and the latter in turn significantly influences resource orchestration, re-institutionalization and circular economy practices. Circular economy practices in turn significantly impact green servitization. Both resource orchestration and re-institutionalization explain the relationship between supply chain alertness and circular economy practices. In other words, resource orchestration and re-institutionalization facilitate implementing circular economy practices resulting from AI-driven decision support systems capabilities.

 

Given the findings, it is important to highlight that AI-driven decision support systems provide a data-driven foundation for companies to make informed sustainability decisions. Key applications include:

• Predictive analytics for supply chains – AI detects inefficiencies, identifies carbon footprint hotspots, and suggests optimizations.
• Intelligent resource allocation – AI helps businesses reuse materials, reduce waste, and improve circular supply chain logistics.
• Automated compliance & reporting – AI streamlines regulatory reporting and ensures alignment with ESG (Environmental, Social, and Governance) standards.

 

In sum, our research underscores the transformative potential of AI in driving green servitization. As industries continue to face mounting environmental pressures, companies that proactively leverage AI to enhance sustainability will gain a competitive edge. Green servitization is not just a trend—it is a strategic imperative for the future of supply chains.

 

Would you like to explore how AI can enhance your company’s sustainability initiatives and green servitizaton?

Check out our short executive course that unpacks critical aspects of business sustainability and equips you with the practical skills and insights to implement these concepts effectively:

 

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