A quiet Microsoft campus during the COVID-19 pandemic. (GeekWire Photo / Todd Bishop)
In the first year since aiming to go carbon negative by 2030, Microsoft announced Thursday that it had reduced its carbon footprint by 6% from 11.6 million tons to 10.9 million tons. It was also paid to remove an additional 1.3 million tons of carbon from the atmosphere.
If the Redmond, Washington-based company maintains, and potentially improves, the progress made in its first 12 months, it is on track to meet its goal – one of the company’s most aggressive corporate climate goals. The company said a “small part” of the reduction in its greenhouse gas emissions was due to COVID-19.
To curb emissions, Microsoft is investing in electric vehicles, battery systems to replace diesel generators to secure its data centers, and renewable energies. Since July, the company has been applying an internal carbon tax on emissions caused by its suppliers and the use of its products by its customers. Those who measure the CO2 balance refer to these as “Scope 3 emissions”. Microsoft has already calculated itself for Area 1 and Area 2 emissions associated with its own business operations, including travel and electricity. The taxes contribute to the payment of the sustainability programs.
Starting this year, the software and cloud computing company will take into account the progress of its executives on sustainability goals when calculating their compensation. Microsoft also ties executive pay to the increasing diversity of its workforce.
How does the company defend its climate protection spending against its shareholders?
We firmly believe that what is good for the climate is good for business.
“We strongly believe that what is good for the climate is good for business and good for companies that are at the fore in solving carbon problems,” Microsoft President Brad Smith said in a GeekWire- Interview.
Customers, especially younger consumers of Surface devices and Xbox games, are as concerned as other companies and governments with the company’s actions in this area, Smith said. Investors themselves are increasingly considering environmental records when selecting exchanges.
“I think this will likely turn out to be good for shareholders,” said Smith.
On Tuesday, Microsoft reported that for the December quarter, revenue rose 17% to over $ 43 billion and earnings rose 33% to $ 15.5 billion. The growth reflects continued demand for the company’s cloud services as the pandemic digitized more aspects of work, leisure, education and health.
Microsoft also released its annual sustainability report on Thursday. Smith calls the Microsoft climate protection initiative a “moon shot” in view of its brave goals, considerable hurdles and many years of work.
Microsoft President Brad Smith at an announcement of the company’s climate protection goals in January 2020. (GeekWire / Todd Bishop)
“We’re trying to get to the moon,” he said, “but we’re currently working on the version of the Mercury spaceship to put the first astronaut into orbit.”
A major milestone reached last year was the establishment of an infrastructure to contain and track the company’s emissions – including creating internal economic incentives for reductions, setting objective and measurable standards, and creating technology-based measurement systems to track progress. Smith said they would like to share this work with others interested in similar cuts.
One of the big challenges is to find solutions for carbon removal. This is key to Microsoft’s 2050 goal of clearing all emissions since it was founded in 1975.
The company has invested in 26 carbon removal projects internationally, with a focus on nature-related interventions such as agriculture and reforestation projects in South and Central America and US forest conservation efforts in Washington State and elsewhere.
In the long term, the company is looking for technology-driven projects for direct air separation to remove atmospheric carbon. But they do not currently exist to the extent that is needed and in fact the whole sector is just beginning.
“We are working to build a new market and drive the creation of a new industry – the industry to remove carbon from the environment and capture it in the earth,” said Smith. “We are up to date.”
In the past 18 months, Microsoft and Amazon have taken important environmental initiatives:
- As part of the introduction of Climate in January 2020, Microsoft launched a Climate Innovation Fund worth $ 1 billion.
- The company started sustainability initiatives on the topics of water, biodiversity of plants and animals and waste.
- In February, Jeff Bezos, CEO of Amazon, created a $ 10 billion Bezos Earth Fund to fight carbon pollution.
- Four months later, Amazon announced its $ 2 billion Climate Pledge Fund.
- Amazon promised to become net climate neutral by 2040 and launched the Climate Pledge in autumn 2019 to encourage companies to jointly participate in the climate goals.
- In December, Microsoft, Unilever, Brooks, and others were named as signers of the pledge, bringing the total to 31.
But there is still room for improvement, say climate proponents. Microsoft and Amazon have been criticized for making campaign donations through their PACs to political candidates who have spoken out against climate protection measures. And the tech giants have caught fire to help oil and gas companies produce fossil fuels thanks to their cloud computing services.
On both fronts, Smith said it was better to keep communication channels open and work to change minds and encourage people and businesses to pursue less polluting practices.
“There are some prominent members of Congress that we disagree with today, but we talk a lot about this issue. I talk to them a lot about this and that gives me not only hope, but also optimism for the future, ”he said. “That’s why I really want to continue this type of conversation.”
On Wednesday, President Biden signed numerous implementing regulations that will help combat climate change. Smith said he supports national and global climate protection efforts, but cannot comment on Biden’s specific orders or policy proposals at this point.
He hopes for the future and is happy with what Microsoft has achieved so far.
“I am more optimistic now than I was a year ago about our ability to achieve these goals. I’m more optimistic about where the world is going to address these issues, ”he said. “One can only feel how this extraordinary energy and spirit of innovation are brought to the problem of climate change around the world.”