You could be forgiven for missing it, given the surplus of news, but the past few years have seen a profusion of climate change commitments from big tech companies. Facebook, Google, Amazon, and Apple have all promised to shrink their climate footprints, each attempting to outdo the others.
Climate advocates are naturally leery of these commitments. Those who lived through the faddish interest in climate in the mid-2000s, around the release of Al Gore’s An Inconvenient Truth, will recall the endless torrent of breathless corporate announcements. NBC had a “green week,” big corporations bought cheap offsets to become “carbon neutral,” automakers sold SUVs with vegan leather seats, and dozens of companies sold “sustainable” coffee cups, T-shirts, and tchotchkes. It was a greenwashing parade.
But times really have changed. The steps tech companies are taking these days represent a sea change in engagement. Climate change has moved out of the public relations department, into the C-suite, and down to the shop floor.
To explore the strength of recent corporate climate commitments (and their limits), I want to focus in on Microsoft, a widely acknowledged leader in the field. Earlier this year, it committed not just to reducing its emissions but to going carbon negative, wiping out all the carbon the company and its suppliers have emitted since its founding in 1975. In recent weeks, Microsoft has released a flurry of announcements updating its progress, so now seems like a propitious time to take a close look.
Over the past week, I’ve been talking to corporate sustainability experts and people who have worked with, and at, Microsoft. I tried to piece together how big a deal its work on climate is — how seriously to take it, what influence it may have, and where it might fall short.
To spoil the ending: It is a big deal. The company is setting new standards, especially in the rigor and transparency it is applying to the effort, and it is deliberately attempting to bring other companies, both suppliers and competitors, along with it into a world of shared metrics and data. There is more it could do, but it is earning its good climate reputation.
I’ll dig into what Microsoft is doing and what makes it unusual. But first, some background.
A quick note on kinds of emissions
In the carbon world, the emissions of a company (or person, city, or country) can be divided into three buckets:
- Scope 1 emissions come directly from resources the business owns or controls, like furnaces or delivery vehicles.
- Scope 2 emissions come from the power plants that generate the electricity the business uses.
- Scope 3 emissions are indirect, “embedded” in the materials and services the business uses, representing the emissions of the full supply chain. (Business travel is a common example — there are carbon emissions embedded in every plane ticket.)
In the early days of corporate climate engagement, companies typically measured and reduced only their direct energy emissions (scope 1 and 2). But in the past several years, in part thanks to the example set by companies like Dow, Unilever, Apple, and Microsoft, measuring and taking responsibility for scope 3 emissions has become the new norm.
This is significant, because for most companies, including Microsoft, scope 3 emissions are substantially larger than scope 1 and 2 combined.
“At Microsoft, we expect to emit 16 million metric tons of carbon this year,” president Brad Smith wrote in a January blog post. “Of this total, about 100,000 are scope 1 emissions and about 4 million are scope 2 emissions. The remaining 12 million tons all fall into scope 3. Given the wide range of scope 3 activities, this higher percentage of the total is probably typical for most organizations.”
Microsoft has a recent history as a sustainability leader
On Monday, Microsoft announced it has completed the largest-ever test running data center servers on hydrogen fuel cells, which can be powered by zero-carbon hydrogen generated from renewable energy. Currently, even if they run entirely on renewables, data centers have diesel generators on site for long-term backup in case of an outage.
With 160 data centers worldwide and multiple generators per data center, that adds up to a lot of diesel generators. The company has pledged to phase them all out by 2030. That’s why it is testing fuel cells as backup power.
It is the latest in a string of climate initiatives that go back almost a decade. The company has been 100 percent carbon neutral, through the purchase of carbon offsets, since 2012. In 2013, it implemented an internal carbon tax on the scope 1 and 2 emissions of all divisions, with the revenue going toward sustainability improvements. It created a business unit focused on climate solutions, which produces things like AI for Earth. It recently succeeded in buying enough renewable energy to account for all US domestic operations.
Its latest sustainability report recounts all these efforts and more, including substantial efficiency upgrades at its campuses. In 2016, it won a climate leadership award from EPA.
“We’ve seen them as a leader since 2013,” says Nicolette Bartlett, climate change director at the Carbon Disclosure Project (CDP), a global clearinghouse of corporate sustainability data. The CDP has a scorecard, which takes into account hundreds of sustainability and transparency metrics, and Microsoft has consistently gotten an A. “It really matters to them,” Bartlett says.
In recent years, thanks to the IPCC report and pressure from investors and employees, concern over climate change has risen to the highest levels of the company. Josh Henretig, who spent 12 years on the company’s global sustainability team, rising to senior director before leaving in February, says he witnessed the shift from his team pushing to his team being pulled. “We started to almost stumble under the full weight and examination that the executive team imposed on us around the question: What’s really required?” he says.
“At this stage,” says Verena Radulovic, director of corporate engagement at the Center for Climate and Energy Solutions, “Microsoft has enough experience with reducing its own emissions, and support from its leadership to keep doing so, that it is able to take its climate commitment to a more ambitious level.”
And that’s what it did in January.
Microsoft will go carbon negative and wipe out all the carbon it has ever emitted
In January, Microsoft made a startling announcement: Not only will it reduce its scope 1, 2, and 3 emissions by 55 percent, it will continue beyond that and go carbon negative, drawing down more carbon than it emits, by 2030. By 2050, it will draw down enough carbon to account for all the company’s emissions since its founding in 1975.
“It set a new bar for what is considered climate leadership,” says Radulovic.
As you can see on the graph below, the target represents a radical acceleration of Microsoft’s carbon reduction efforts.
The January announcement, which came from Smith, the company’s president, backed by CFO Amy Hood and CEO Satya Nadella, laid out a set of principles that would guide the company’s approach:
- Grounding in science and math
- Taking responsibility for our carbon footprint
- Investing for new carbon reduction and removal technology
- Empowering customers around the world
- Ensuring effective transparency
- Using our voice on carbon-related public policy issues
- Enlisting our employees
The post goes into detail on each. I’ll just hit some highlights.
Nos. 1 and 2 are about proper measurement, scope 1-3 emissions, and historical emissions. “While we at Microsoft have worked hard to be ‘carbon neutral’ since 2012,” Smith writes, “our recent work has led us to conclude that this is an area where we’re far better served by humility than pride.”
“We had some very heartwarming, but also uncomfortable, conversations,” says Henretig.
Through these discussions, the company concluded that voluntary offsets are insufficient. It is now moving to a model where it directly contracts with renewable projects through power purchase agreements, (PPAs) — it is aiming to hit net zero for its scope 1 and 2 emissions by 2025 — and will compensate for what it can’t directly reduce with negative emissions.
In this area, especially, Microsoft is showing real leadership.
As for No. 3, the company announced it will establish an investment fund that will target early-stage clean energy technologies, aiming to spend $1 billion over the next four years.
Some critics have argued that the venture capital model, built around big bets with potentially big returns, is a narrow way to approach the needs of the energy sector. Just recently, for instance, the International Energy Agency argued that crucial early-stage technologies need enabling infrastructure to continue developing.
Source: vox
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