Microsoft Corp. leaders are calling the company’s new plan to address climate change, a “Moonshot,” comparable to humanity’s achievements after John F. Kennedy’s announcement that the United States would send the first man to the moon.
On Jan. 16, CEO Satya Nadella, president Brad Smith, CFO Amy Hood, and chief environmental officer Lucas Joppa announced the Redmond-based tech company’s new carbon neutral plan to reduce and eventually remove 100 percent of its carbon footprint.
“Today, we are making a commitment that by 2030, Microsoft will be carbon negative. By 2050, Microsoft plans to remove the carbon it has emitted since it was founded in 1975,” Smith said.
Microsoft’s plan to not only become carbon neutral but also carbon negative is “thrilling,” according to Lisa Graumlich, a University of Washington (UW) expert on climate change. Graumlich, dean of UW’s College of the Environment, specializes in climate change research and most recently testified before the U.S. House of Representative Select Committee on Energy Independence and Global Warming.
“Carbon neutral means that Microsoft will balance their carbon output and removal, which is great but continues to put us on the trajectory of further climate change,” Graumlich explained. “But carbon negative means that Microsoft will remove all of its historical emissions, which can really mitigate the impacts of climate change.”
Microsoft committed to a $1 billion climate innovation fund for developing new sustainable technologies for carbon reduction and removal. The company plans to reduce its emissions from 16 million metric tons to net zero across its entire business and supply chain.
Smith also announced that Microsoft signed the U.N. “Business Ambition for 1.5°C — Our Only Future,” a pledge that aims to promote sustainable science-based practices that align with limiting global temperature rise to 1.5 degrees above pre-industrial levels.
To help explain the scope of the company’s carbon footprint, Smith presented the statistics, which he called “carbon math.” Microsoft plans to address three different scopes of its carbon impact. Smith defined the first scope as Microsoft’s direct emissions — the trucks, commuter buses and energy used for production. The second scope refers to the carbon emitted to create the electricity that Microsoft and its data centers consume. This is the electricity that powers consumer products and carbon emitted by millions of plugged in Xboxes and Surface Pro laptops.
“I’m absolutely convinced that it’s going to take all of us empowered with technology to achieve the stable climate that we, our children and generations to come will ultimately depend upon,” said Joppa.
Microsoft plans to take necessary steps within the next five years to be a 100 percent green company starting with the first and second scopes. In July, the tech giant will start phasing in an internal carbon tax of $15 per metric ton to cover the third scope of emissions. The tax will charge the company’s own business divisions. All taxes will go toward the sustainability efforts. By July 2021, Microsoft plans to have new processes and tools both to enable their suppliers to accurately report on their emissions and incentivize them to make a difference to be more energy efficient.
Graumlich feels optimistic about Microsoft’s plan for the future because of the company’s history with establishing their internal carbon tax in 2012.
“Microsoft had a culture of managing their carbon output before other companies even thought of it,” Graumlich said. “Their internal carbon tax has held them accountable to reduce carbon use.”
Smith said, “We will ensure that by the year 2025, we will have power purchase agreements in place for 100 percent of the renewable energy we need for all of Microsoft’s data centers, our buildings, and our campuses worldwide.”
To address the third scope, Joppa also announced the creation of the Microsoft Sustainability Calculator, which provides customers using Azure, Microsoft’s public cloud services for storage and virtual networking, with more transparency. The calculator will measure and report the carbon emissions associated with the use of customers’ workloads to incentivize them toward greener solutions. Smith likened Microsoft’s customer transparency regarding its carbon footprint to nutrition labels in grocery stores.
“Shouldn’t people around the world be able to do the same thing when they’re making purchasing decisions based on an understanding of how much carbon was emitted to produce that product? Just think about what that would do to empower consumers and incentivize businesses,” said Smith.
Ongoing and future efforts
In the long-term, Microsoft has many approaches to begin the carbon removal process, including nature-based approaches, like planting more trees and new green technology. Hood explained that the $1 billion climate change fund will go toward project-based financing to accelerate technologies that Microsoft is currently developing.
“We’ll create direct air-capture technology to remove carbon from the atmosphere, for example, where air is literally run through a machine and removed from it,” Smith said.
The new pledge is just an addition to the company’s current large-scale sustainability efforts through its AI for Earth, which addresses climate equity using cloud computing services, according to Hood. AI for Earth has provided nearly 500 grants to fund sustainability projects all over the world.
Projects like SunCulture, for example, use Azure to collect information on the environment to create detailed forecasts to help smallholder farmers in Africa to maximize yields and earnings.
Graumlich explained that Microsoft’s energy saving plan benefits both communities worldwide from a farming standpoint and the company itself from a business standpoint.
“In offsetting carbon emissions, there is an increased capacity of fertile soil that can be used to create tastier crops and eventually help address hunger in communities worldwide,” she said. “Reducing their energy use also saves Microsoft a lot of money.”
As climate change continues to affect communities all over the world, Graumlich hopes Microsoft’s efforts will inspire both the government and other companies to follow suit and make larger investments in sustainability.
“It’s easy to articulate a ‘Moonshot,’” she said. “But you have to ask, ‘Does this firm have the intellectual capacity and resources to achieve it?’ I’m willing to bet on Microsoft.”