Software giant will also join corporate push for US carbon tax
Microsoft has today unveiled a raft of new green commitments, including plans to double its internal company carbon price, as it set out its "tech-first" approach to tackling climate change and delivering a "sustainable, just and prosperous future".
The software giant said it will hike its internal carbon fee to $15 per metric tonne on CO2 emissions from its core business, including electricity consumption and staff air travel, with the funds raised from the levy reinvested in green measures such as energy efficiency, renewable energy generation, and carbon offsets.
Microsoft first introduced an internal pollution price in 2012 at around $7-8 per tonne, and in 2015 estimated the measure had delivered $10m in annual energy savings. The tax has also slashed annual emissions by 7.5 million metric tonnes since its inception, and helped fund 10.2 billion kWh of renewable energy.
The multibillion dollar company also announced plans to join the Climate Leadership Council, the broad coalition of major corporates set up in 2017 to lobby for a federal carbon tax on CO2 emissions in the US. Under the proposals, revenues raised would be returned directly to American citizens.
Microsoft will be the first tech firm to join the group, which also includes major oil firms ExxonMobil, Shell, BP, Total and ConocoPhillips, alongside companies such as Unilever, General Motors and Allianz.
Lucas Joppa, Microsoft's chief environmental officer, said the firm's "transformational" green commitments would help embed sustainability into "every corner of the company". At the same time, he said the firm was stepping up its climate advocacy externally ahead of a crucial Presidential election set for late 2020.
"I think we have to have an eye on the prize, which is putting a price on carbon that incentivises different sectors of the economy to make the right decisions," Joppa told BusinessGreen. "The year 2020 is obviously a big year here in the US from a policy and politics perspective. I personally and professionally would love to see climate and how we deal with carbon, and particularly policies that have the backing of the world's most senior economists behind them - I would love to see those as part of the conversation."
Progress on emissions
Microsoft has claimed to be 'carbon neutral' across its global operations since 2012, partly through the purchase of carbon credits to compensate for emissions "in regions where we cannot procure renewable energy", and 100 per cent powered by renewables across its core business since 2014.
The company aims to cut its actual operational carbon emissions by 75 per cent by 2030 from 2013 levels, which it estimates will help avoid more than 10 million metric tonnes of CO2 by the end of the next decade.
Microsoft declined to reveal precise progress towards that goal to date to BusinessGreen, but Joppa insisted it is "well on track" and emphasised that it was slashing its carbon footprint while also significantly growing its business.
"The best way to think about this is emissions that we're avoiding through our forthcoming investments in energy efficiency and renewable energy," he explained. "Our business continues to grow year over year, and that requires more energy which means more emissions. This target gives us a path to manage that growth in a sustainable, low-carbon way."
Water, buildings and datacentres
Microsoft also today announced a new water replenishment strategy, with the aim of replacing all of the water consumed across its operations in water-stressed regions by 2030.
Meanwhile, at its headquarters in Redmond, Washington, the tech giant has started work to construct 17 zero carbon new buildings totalling 2.5 million square feet. Using smart building technology and a new online tool, it aims to reduce the amount of carbon associated with the construction materials of these buildings by at least 15 per cent, with a longer-term goal of reaching 30 per cent.
The campus will also use 100 per cent carbon-free electricity, with all other fossil fuels removed from building operations, including the elimination of gas ovens in kitchens, the company said.
And, as part of its "tech first" approach to sustainability, the company said it would continue to focus on improving its energy efficiency and ramping up renewable energy to power its rapidly growing number of datacentres worldwide.
Microsoft revealed it is on course to power its datacentres with 60 per cent renewable electricity before the end of this year. It set a new goal today to hit 70 per cent by 2023, and 100 per cent by 2030.
"Our datacentre business today is completely transformed from where it was in 2013, and by 2030 it will be again by many orders of magnitude," said Joppa. "So we're committing to making those reductions across a significantly growing volume. It's baselined against a business that was much smaller in 2013."
Harnessing AI for sustainability
Microsoft is also launching a new data-driven, smart circular cloud initiative that will use Internet of Things (IoT), blockchain, and Artificial Intelligence to monitor datacentre performance and streamline the reuse, resale and recycling of its datacentre assets, including servers.
In a blog post today, Microsoft President Brad Smith said data is a "critical part" of the company's work and the world's transition to a low carbon economy, helping to boost understanding of planetary health across air, water and land as well as the wellbeing of wildlife.
Microsoft aims to capture this vast amount of environmental data and "convert it into actionable intelligence", pledging to host the "world's leading environmental data science sets" on its cloud platform Azure.
This data will be open source and available to the public, explained Smith. "These large government datasets contain satellite and aerial imagery, among other things, and require petabytes of storage," he wrote in a blog post today. "By making them available in our cloud, we will advance and accelerate the work of grantees and researchers around the world."
The move will also aid its 'AI for Earth' grant programme, through which Microsoft is set to funnel $50m of funding over the next five years to environmental tech projects around the world.
"Microsoft is looking to double its ambitions and its actions in environmental sustainability and in particular doing that through a technology first approach," Joppa said. "As one of the world's biggest technology companies that is particularly the special attribute that we have to bring to the problem."
Boosting GDP and cutting carbon
Alongside its sustainability roadmap Microsoft released the findings of new research carried out by consultancy giant PwC which underscores the role of AI in emissions reductions.
The research found greater adoption of AI across four key sectors of the economy - transport, agriculture, energy and water - could boost global GDP by up to 4.4 per cent by 2030, while also cutting greenhouse gases by as much as four per cent.
The cut in emissions would equate to around 2.4 gigatonnes of CO2, or the equivalent of reducing the annual emissions of Australia, Canada and Japan combined to zero by 2030. It would also boost productivity by creating an estimated 38.2 million net new jobs worldwide, the research found.
According to Joppa, there are significant environmental and economic gains from harnessing greater use of AI across the economy, while the economic costs of not acting to tackle climate change would be much greater.
But while he hailed Microsoft's green ambitions as "transformational and sincere", he admitted more must still be done to raise the bar. "The science is clear - we're running out of time - the actions that need to be taken are pretty significant and they need to be taken now," Joppa said. "There is an outstanding question: is what we're doing enough? We came to the conclusion that the answer is 'no'. What we have done is a necessary but entirely insufficient criterion to moving the world to where it needs to go on this topic. We need to show greater leadership and investment, and across all of that we need to continue our commitments to transparency and accountability."
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