Microsoft Strengthens Commitment to Sustainability with New Carbon-Free Electricity Policy for Key Suppliers

Microsoft has announced a pivotal new policy requiring some of its principal suppliers to utilize 100% carbon-free electricity. This initiative is part of a broader suite of actions aimed at realigning the company with its ambitious environmental goals.

This policy was unveiled in Microsoft’s 2024 Environmental Sustainability Report, which evaluates the company’s progress on its critical sustainability objectives. Since 2020, Microsoft has committed to becoming carbon-negative, water-positive, and zero waste by 2030, in addition to pledging to conserve more land than it uses by the same year.

The report indicates that while Microsoft has made significant strides in several areas, such as reducing operational emissions, accelerating carbon removal, minimizing waste, enhancing biodiversity, and conserving land, it still faces substantial challenges. Notably, the company is struggling with reducing Scope 3 emissions, which are indirect emissions from the entire value chain, and achieving its goal of reducing water use and replenishing more water than it consumes in its data centre operations.

One of the most daunting tasks identified in the report is curbing value chain emissions. Despite a target to slash Scope 3 emissions by more than half by 2030 from 2020 levels, Microsoft reported a 30% increase in these emissions by 2023. Microsoft President Brad Smith and Chief Sustainability Officer Melanie Nakagawa attribute this rise to the expansion of data centres, which involves significant embodied carbon in construction materials and hardware components.

Scope 3 emissions constitute over 96% of Microsoft’s total emissions footprint. This surge in Scope 3 emissions has led to a 29% increase in the company’s overall emissions since 2020, despite reductions in direct Scope 1 and 2 emissions.

Smith and Nakagawa stated, “Our challenges are in part unique to our position as a leading cloud supplier expanding its data centres. But, even more, we reflect on the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips. These are the biggest drivers of our Scope 3 challenges.”

In response, Microsoft has initiated a comprehensive company-wide effort to tackle Scope 3 emissions. The company has developed over 80 significant measures to mitigate these emissions. Key initiatives include the new mandate for 100% carbon-free electricity for select high-volume suppliers, improving emissions measurement and efficiency at data centres, forging partnerships for technological breakthroughs in greener steel, concrete, and fuels, leveraging purchasing power to drive demand for innovative technologies, and advocating for climate-focused public policy reforms.

Additionally, Microsoft is accelerating its water sustainability efforts by reducing water use intensity, optimizing data centres to support AI workloads without water for cooling, engaging in water advocacy, finalizing a water policy strategy this year, and developing replenishment projects in areas with high water stress where the company operates datacenters.

Smith and Nakagawa concluded on an optimistic note, “Even amid the challenges, we remain optimistic. We’re encouraged by ongoing progress across our campuses and data centres, 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.”

Source: ESGtoday

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