Microsoft has an ambitious plan to reduce its carbon footprint. But on Thursday, the company reported a significant increase in greenhouse gas emissions from its activities and products, a reminder of the challenges companies face trying to clean up their businesses.
Microsoft’s carbon emissions rose 21.5% in the 12 months to June 2021, after falling slightly in 2020 and 2019. This increase is driven almost entirely by the emissions of energy used to build data centers and manufacture devices such as the Xbox and the Surface tablet. and the power that Microsoft estimates its products consume when people use them.
Microsoft aimed to show that, with committed leaders and sufficient funding, companies can effectively cut their net emissions to zero in the coming years while supporting international efforts to limit global temperature rise. But Microsoft’s surge in emissions suggests it and other companies may have trouble meeting their targets. And since this increase is driven by high demand for products, it’s a reminder that sustained business growth can often mean more greenhouse gases being released into the atmosphere.
However, Microsoft executives say they could go “carbon negative” by the end of the decade by cutting emissions and implementing various measures to remove carbon from the atmosphere. “We remain fully committed and absolutely confident in our ability to meet our 2030 commitments,” said Lucas Joppa, chief environmental officer at Microsoft.
Many large companies have plans to reduce emissions of some kind and are facing pressure from shareholders to do more. Investors are also pushing for oil and gas companies to switch from fossil fuels to renewables.
Microsoft became the first major technology company to report on the progress of its sustainability efforts this year. Apple, Google and Facebook’s parent Meta are aiming to bring their net carbon emissions to zero by 2030. Amazon, which has a large delivery network and much more extensive supply chains, has set a goal of doing the same by 2040.
“All of this is not going to be easy for any company – decarbonization is a challenge,” said Laura Draucker, director of Ceres, a nonprofit group that works with investors and companies to address environmental issues. But when big tech companies like Microsoft report emissions cuts, she added, it should encourage them to work together to push for policies that promote “affordable and equitable access to clean energy.”
“This does not affect their competitive advantage in any way,” she added.
On Thursday, Microsoft took a new step by indicating that it will no longer do specialized work for fossil fuel energy companies unless they have a “net zero emissions” goal. The term means no carbon emissions overall, a goal that companies typically hope to achieve through a combination of carbon reduction and carbon removal.
And Dr. Joppa said the recent oil and gas market crashes have not convinced him of the need to slow down the transition to renewables. “I would say I didn’t see anything that convinced me that we should be doing something else other than keep moving faster,” he said.
Microsoft is also actively pushing its climate change agenda beyond its own business. When the Securities and Exchange Commission asked the public about how corporate climate change disclosures could be standardized, Microsoft said it would support the commission’s development of such disclosure rules.
Updated
March 10, 2022 6:03 pm ET
Government moves to push companies to adopt climate policy may face some resistance in Washington, especially as the energy price surge sparked by Russia’s invasion of Ukraine has led to calls to increase oil and gas production.
“Private companies are free to pursue zero net income policies regardless of their meaning – as long as they follow the law, it’s not a matter of public policy,” Kathy Tubb, senior policy analyst for energy and environment at the Heritage Foundation, a conservative political group, said in an email. letter. “Politicians trying to use government power to pressure or even demand such efforts in the private sector are of great concern.”
In theory, Microsoft’s huge profits give it the means to achieve its goals. And the company has been successful in reducing emissions from its own operations and from the electricity that powers those operations, known as Scope 1 and Scope 2 emissions in industry jargon. They fell 17 percent in the 12 months to June, and with increased clean energy purchases and efficiency measures, the company aims to bring those emissions down to near zero by 2025. According to Dr. Joppa, Microsoft still expects to achieve this goal.
It is much more difficult to reduce Scope 3 emissions – emissions from the supply chains of a company and its customers. Microsoft Scope 3’s emissions are almost 50 times greater than Scope 1 and 2 combined, and they rose 23% during the year to June after falling slightly in previous years. The jump came from three main sources: the energy used to build data centers; power consumed by suppliers; and energy costs when customers used Microsoft devices, which have skyrocketed as the pandemic brought Xbox usage.
However, Microsoft aims to more than halve its Scope 3 emissions by 2030. On Thursday, the company said it was working to reduce carbon emissions from construction and improve the energy efficiency of its devices.
And by removing millions of tons of carbon from the air a year, Microsoft hopes to cut its total emissions to zero or below in net terms by the end of the decade.
One important factor will be the rapid development of carbon removal technologies, which operate on a small scale and are expensive. Reforestation is currently Microsoft’s primary method of removing carbon. The company said it has contracts to remove 2.5 million metric tons of carbon, but that is only 18 percent of its carbon emissions for the year to June. Dr. Joppa said that Microsoft will be able to achieve its goals even if technology that removes carbon directly from the air does not work.
But Ceres’ Dr Drucker said that even if carbon removal became more widely used, companies would need to cut back on the emissions they produce.