The science is clear—the world needs to transition to net zero carbon emissions by 2050.
With 2 trillion metric tons of greenhouse gases released into the environment, the results will be catastrophic if we don’t combat climate change.
Amidst these crises, we see Microsoft’s claims to achieve carbon neutrality by 2030.
Microsoft has been powered 95% by renewable energy since 2013 and promotes sustainability in the supply chain.
However, the recent sustainability report makes us think their goal might be too ambitious.
We all have one question: “How do they turn these pledges to progress?” A one-word answer to this is ‘strategy’.
This strategy revolves around three pillars; assessing and reducing emissions, purchasing carbon credits, and making long-term investments in the latest technologies.
But before we dive in, let’s have a look at its goals.
Microsoft’s Plan to Achieve Carbon Neutrality by 2030
Microsoft has long been known for its sustainability goals.
The company has been working on becoming carbon neutral since 2012 and intends to improve these goals in the coming years.
And that’s only the start.
Microsoft has also planned to completely shift to renewable energy by 2025, and by 2030 electrify its vehicles. Some other bold pledges company has made for the same year include becoming water-positive and zero waste.
So, how will these ambitious commitments be realized? A closer look at their strategies provides the answer.
How Microsoft Tracks and Measures Carbon Emissions
Microsoft’s carbon footprint report details how the company tracks its carbon emissions in the supply chain, products, and operations.
Microsoft’s carbon footprint report details how the company tracks its carbon emissions in the supply chain, products, and operations.
Not only does it consider direct emissions from on-site power emissions (categorized as scope 1) but also indirect emissions from purchased electricity (scope 2) and upstream and downstream activities (scope 3).
They also make good efforts in data collection using meters, sensors, and other data collection systems. and hire third-party auditors for verification.
While Microsoft has been successful in achieving its goals, a recent sustainability report, published on May 15th, 2024 revealed something else.
Despite all its efforts, there has been a significant increase in carbon emissions instead of a decrease.
The report further explains the rise of these emissions is mainly due to the expansion of data centers responsible for powering ChatGPT, and the carbon footprint of building materials and other hardware like servers, semiconductors, and racks.
The report categorizes these emissions into 2 groups. It says:
- Scope 1 and 2 have witnessed a decrease of 6.3% since 2020.
- Scope 3 has witnessed an increase of a whopping 30.9% in its emissions.
The good thing is that the company has taken the right steps to tackle the issue. The most prominent is purchasing carbon offsets to remove carbon from the environment and reduce pollution.
How Microsoft Reduces Carbon Emissions
Microsoft’s plan to reduce its emissions is based on three primary pillars:
- Increasing energy efficiency in its facilities and reducing air travel
Microsoft makes it possible by tracking its key indicators. These include:
- Power usage effectiveness (PUE), carbon usage effectiveness (CUE), and water usage effectiveness (WUE) for data centers
- Energy efficiency in software development labs
- Emissions per employee per square foot for offices
- Miles for air travel for each employee.
- Increasing renewable energy purchases and reducing waste and water use
In addition to purchasing carbon offsets and renewable energy certificates (RECs), Microsoft also enters into long-term power purchase agreements.
For instance, it makes direct investments in RE projects and links its own energy-hungry data centers to methane fuel cells and on-site RE generation.
- Increasing accountability within the organization by rigorously tracking emissions
Microsoft does this by imposing an internal carbon price on all emissions that are the result of its divisions and business units.
The money collected is deposited into a central fund, which is then used to fund internal emission reduction initiatives, buy renewable energy, and encourage sustainable energy innovation.
Surprisingly, Microsoft aims to remove more carbon that emits by 2030.
However, the company’s goals to run its global operations on 100% renewable energy by 2025 face a lot of challenges. The biggest one is producing power for cloud and AI technologies.
Microsoft’s Sustainability Plan for Carbon Removal
Are short-term emission reduction measures enough? The plain answer from Microsoft is a big fat no.
That’s why the company is investing in long-term solutions like Direct Air Capture (DAC), a technology supported by Microsoft’s Climate Innovation Fund.
DAC pulls carbon dioxide directly from the air and stores it permanently to ensure carbon isn’t repurposed for oil and gas production.
Currently, it holds 500,000 metric tons of carbon removal credits. These credits will be facilitated by 1PointFive’s STRATOS facility in Texas, which captures and stores carbon underground through subsurface saline sequestration.
These measures help Microsoft mitigate climate change globally and give hope for a positive future.
How Microsoft Offset Carbon Emissions
Despite all these efforts, some emissions are unavoidable because of the size of the global supply chain.
To address the issue, Microsoft invests in carbon credits that come from projects such as reforestation and afforestation.
One example is Microsoft’s partnership with ‘The Nature Conservancy’ which supports the Forest Resilience Bond (FRB). These forest-focused initiatives promote biodiversity, prevent wildfires, and enhance carbon sequestration in forest ecosystems.
Not only this, Microsoft also collaborates with the Land Life Company, an enterprise focusing on reforestation. It uses drone technology to plant trees and has planted 4 million trees across three continents so far.
