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Microsoft’s New Strategy to Combat Rising Scope 3 Emissions

Updated: May 23

Microsoft’s New Strategy to Combat Rising Scope 3 Emissions

Microsoft recently unveiled its 2024 Environmental Sustainability Report, addressing the company's progress and challenges in meeting its sustainability goals. This comprehensive report highlights significant milestones, emerging challenges, and the company's strategy to tackle the rise in Microsoft Scope 3 emissions.


Key Highlights from Microsoft’s 2024 Environmental Sustainability Report

Emissions Reduction Progress

  • Scope 1 and 2 Emissions: Reduced by 6.3% compared to the 2020 baseline.

  • Scope 3 Emissions: Increased by 30.9% since 2020, mainly due to new data center construction.

Renewable Energy and Carbon Removal

  • Renewable Energy Portfolio: Over 19.8 gigawatts (GW) of renewable energy assets contracted in 21 countries.

  • Carbon Removal: Contracts secured for 5,015,019 metric tons of carbon removal, to be retired over the next 15 years.

Water Sustainability

  • Water Access: Provided clean water and sanitation solutions to over 1.5 million people.

  • Water Replenishment: Projects contracted to deliver more than 25 million cubic meters of water benefits throughout their lifetimes.

Waste Reduction and Circular Economy

  • Circular Cloud Hardware: Achieved an 89.4% reuse and recycling rate for servers and components.

  • Waste Diversion: Diverted over 18,537 metric tons of waste from landfills and incinerators.

Biodiversity and Land Protection

  • Land Protection: Exceeded the target by 40%, with 15,849 acres permanently protected.

  • Biodiversity: Implemented regenerative design and AI-driven insights to boost local biodiversity around facilities.

Strategic Initiatives and Partnerships

  • Scope 3 Emissions Strategy: Over 80 measures developed, including requiring select high-volume suppliers to use 100% carbon-free electricity by 2030.

  • Partnerships for Innovation: Collaborated with industry leaders on sustainable materials and climate-focused policy advocacy.

Community and Global Impact

  • Microsoft Cloud for Sustainability: Expanded to assist customers in tracking and managing Scope 1, 2, and all 15 categories of Scope 3 emissions.

  • Planetary Computer: Offered open access to extensive environmental monitoring data for researchers and policymakers.

Investment in Climate Innovation

  • Climate Innovation Fund: $761 million allocated towards climate technologies, such as direct air-capture and sustainable aviation fuel.


Key Facts and Recent Developments

Microsoft's Scope 3 Emissions Surge

Microsoft has experienced a notable increase in its Scope 3 emissions, rising by 30.9% from the 2020 baseline. This increase is primarily attributed to the construction of new data centers and the embodied carbon in building materials and hardware components like semiconductors and servers.

Despite a 6.3% reduction in Scope 1 and 2 emissions since 2020, the overall emissions across all scopes have increased by 29.1%.

Strategic Initiatives

To address the rise in Microsoft Scope 3 emissions, the company has launched a company-wide initiative encompassing over 80 discrete measures.

Key strategies include:

  • Enhancing Measurement: Microsoft is leveraging digital technology and AI to gain better insights and facilitate actionable measures. By improving the precision and granularity of its emissions data, the company aims to identify and implement more effective reduction strategies.

  • Boosting Efficiency: Implementing data center innovations to enhance efficiency is a top priority. Microsoft is focusing on designing data centers that support AI workloads with minimal environmental impact, including the use of closed-loop water recycling systems for cooling.

  • Forming Partnerships: Collaborating with industry leaders to develop greener materials and fuels is crucial. Microsoft is working with partners to accelerate breakthroughs in sustainable concrete, steel, and other materials essential for data center construction.

  • Creating Markets: Leveraging Microsoft's purchasing power to boost demand for sustainable solutions is a strategic move. By committing to buy from suppliers who use 100% carbon-free electricity, Microsoft is fostering a market for greener products.

  • Advocating for Policy Changes: Pushing for regulatory changes to support climate goals. Microsoft is actively engaging with policymakers to create an environment that promotes sustainable practices across the industry.

Carbon Reduction and Renewable Energy

In fiscal year 2023 (FY23), Microsoft contracted a portfolio of renewable energy assets totaling more than 19.8 gigawatts (GW) in 21 countries. Additionally, the company secured 5,015,019 metric tons of carbon removal to be retired over the next 15 years. Microsoft has also implemented a requirement for select high-volume suppliers to use 100% carbon-free electricity by 2030.

Significant Milestones

Operational Emissions Reduction

Microsoft has made significant progress in reducing its direct operational emissions (Scope 1 and 2). The company reported a 6.3% decrease from its 2020 baseline, keeping it on track to meet its carbon negative goals by 2030.

Water Sustainability

The company aims to become water-positive by reducing its water use and replenishing more water than it consumes in data center operations. In FY23, Microsoft provided over 1.5 million people with access to clean water and sanitation solutions and achieved significant milestones in water replenishment projects.

Circular Economy Initiatives

Microsoft has achieved an 89.4% reuse and recycle rate for servers and components across all cloud hardware, diverting over 18,537 metric tons of waste from landfills and incinerators. The company continues to innovate in circularity by designing and optimizing new data centers to support AI workloads while consuming zero water for cooling.

Tackling Future Challenges

Microsoft's 2024 Environmental Sustainability Report provides a transparent and comprehensive overview of the company's sustainability journey. While significant progress has been made in areas like operational emissions reduction and water sustainability, the rise in Microsoft Scope 3 emissions presents ongoing challenges. Through strategic initiatives and partnerships, Microsoft remains committed to its climate goals, aiming to create a more sustainable future.

Brad Smith, Vice Chair and President of Microsoft, and Melanie Nakagawa, Chief Sustainability Officer, wrote:

“Even amid the challenges, we remain optimistic. We’re encouraged by ongoing progress across our campuses and datacenters, and throughout our value chain. Even more, we’re inspired by the scores of executives and employees across Microsoft who are rolling up their sleeves and identifying new and innovative steps that are helping us to close critical gaps. We all recognize the same thing: There is no issue today that connects everyone on the planet more than the issues around climate change. We all need to succeed.”

By focusing on improving measurement, increasing efficiency, and advocating for policy changes, Microsoft is taking a holistic approach to address its environmental impact. The company's efforts highlight the importance of innovation and collaboration in achieving global sustainability goals.

For more detailed insights and specific data, readers are encouraged to review Microsoft's 2024 Environmental Sustainability Report


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