Two years into a decade-long sustainability strategy, Microsoft is on track to nearly eliminate Scope 1 and 2 emissions by 2025. For Microsoft and most other companies, Scope 3 emissions – those that emanate from across the whole value chain – are more complex to tackle. Managing Scope 3 emissions became even more tricky at the onset of the Covid-19 pandemic, when there was a surge in home and hybrid working.
The aim to reduce emissions across all three scopes is galvanising Microsoft to understand and refine not just its own approach to carbon accounting, but that of its suppliers and customers, too.
“We’ve updated our supplier code of conduct to ensure that all of our suppliers not only report on what they’re doing with their greenhouse gas emissions data, but that they’re also actively working to reduce that as well,” says Musidora Jorgensen, Microsoft’s chief sustainability officer, UK.
“We’re really redoubling our efforts on measurement to help accelerate our focus on carbon accounting,” she adds. Microsoft is taking a sophisticated approach to tracking and reporting its own emissions data, and its flagship Microsoft Cloud for Sustainability platform supports customers doing the same.
“The complex challenge that a lot of our customers face is, ‘How on Earth do we manage to unpick all of the different datasets and data points, and look at, from a regulatory perspective, what we are required to do across our organisation?’ ” explains Jorgensen. “How do we track and manage what’s going on, and how do we report across all three scopes?”
To help customers tackle this, Microsoft’s first task was building a common data model. “If you ask ten people in the street, ‘What does net zero mean?’, you’ll get ten different answers,” says Jorgensen, “because everybody defines it in a slightly different way. We’ve built a big focus around this – defining the meaning of net zero, and then how to measure it.”
For many of the company’s customers, data is a huge challenge, because it will often sit, siloed, across disparate bits of the business, tethered to spreadsheets, and not necessarily dynamic, says Jorgensen, meaning that when customers need to work out what they’re currently doing and how to improve, “that’s really tricky”.
The BBC is one of the first companies to adopt the Microsoft Sustainability Manager, which is part of Microsoft Cloud for Sustainability, allowing the organisation to track scopes 1, 2 and 3 emissions across their public service and commercial divisions. Our partnership includes data collection, transformation, calculation and reporting capabilities. This means the BBC, which has set the bold target of reaching net zero across its operations by 2030, is able to visualise year-on-year progress since 2019, track performance against goals, gain actionable insights and generate reports.
But Microsoft’s sustainability strategy goes beyond tackling scope 1, 2 and 3 emissions and helping customers on their decarbonisation journeys. The company has integrated this policy goal throughout the organisation, reorienting the business around it as a chief invigorating force.
“When we think about sustainability at Microsoft, we really think about three concentric circles,” says Jorgensen. The central circle is the sustainability of Microsoft’s own business. “That’s the four big operational commitments that we’ve made… around being carbon negative, water positive, zero waste by 2030 and protecting our ecosystems.”
The company is also on the path to achieve 100 per cent renewable energy commitments by 2025, and eliminate dependency on diesel fuel for backup power for data centres by 2030.
Microsoft is taking an ambitious approach. On being carbon negative, the aim is to “take out more carbon from the environment than we’ve emitted since we were founded in 1975”, says Jorgensen. Last year the company made the world’s largest purchase of carbon removal at 1.4 million metric tons. This fiscal year it plans to exceed that by procuring 1.5 million metric tons.
Addressing issues in the first concentric circle tackles the 0.03 per cent of overall global emissions that the company contributes. “But if we just stop there, then we haven’t really helped to solve the overall problem,” points out Jorgensen. “If you think about that second concentric ring, it’s really around the business of sustainability.” This second circle looks beyond the edges of Microsoft’s business, at the remaining 99.97 per cent of global emissions, which encompasses the company’s customers and partners.
That’s why, on issues like carbon removal, it’s not just purchasing carbon removal credits for Microsoft, but pouring money into directly stimulating this nascent industry through initiatives like the Climate Innovation Fund, a $1bn pot of the company’s own capital that is seeding up-and-coming startups in this space, “helping us drive Microsoft’s commitments forward, but also helping the rest of the world, which needs those sorts of technologies as well”, says Jorgensen.
“The third and final concentric circle is what we’re doing to help drive the overall global agenda from a markets and an influencing perspective,” says Jorgensen. A principal sponsor of Cop27, the company also uses its position as one of the world’s most prominent technology companies to promote sustainability globally.
“Sustainability is not just the right thing to do, it’s also good for business,” says Jorgensen. Forecasters estimate that trillions of dollars of the global economy are going to be tied up in the business of sustainability in the next 50 years. “Consumers are now demanding this, and it’s something that all businesses are focused on,” says Jorgensen. “For those organisations who can get ahead of it and get it right, there is a huge amount of opportunity and potential.”
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