Microsoft’s Pursuit of Climate Goals Runs Into Headwinds

Microsoft has ambitious plans to reduce its carbon emissions. But on Thursday, the company reported a large increase in greenhouse gases emitted from its operations and its products, a reminder that companies face challenges when trying to clean up their businesses.

Microsoft’s carbon emissions rose 21.5 percent in the 12 months to June 2021, after small declines in 2020 and 2019. The increase was driven almost entirely by emissions from the energy used to build data centers and devices – such as the Xbox and Surface tablets – and the power that Microsoft uses in its products when people use them.

Microsoft has tried to show that with committed leaders and adequate funding, companies can effectively reduce their net emissions to zero in the coming years by promoting international efforts to limit global warming. But the increase in Microsoft’s emissions suggests that it and other companies may have difficulty meeting their targets. And as strong demand for products has increased, it is a reminder that strong business growth can often mean pumping more greenhouse gases into the atmosphere.

However, Microsoft leaders say they could be “carbon negative” by the end of the decade by reducing emissions and using various measures to remove carbon from the atmosphere. Lucas Joppa, Microsoft’s Chief Environmental Officer, said: “We are still fully committed – and confident in our ability to meet our 2030 commitments.

Many large companies have some sort of plan to reduce their emissions, and they face pressure from shareholders to do more. Investors have also pushed oil and gas companies to move from fossil fuels to renewable energy.

Microsoft is the first major tech company to report progress on its sustainability efforts this year. Apple, Google and Facebook’s parent, Meta, all aim to reduce their net carbon emissions to zero by 2030. Amazon, which has a wider delivery network and more extensive supply chain, aims to do the same by 2040.

In the new move, Microsoft indicated on Thursday that it would not do special work for energy companies involved in fossil fuel extraction unless they have a “net zero” target. The term means no carbon emissions overall, a goal companies typically expect to achieve through a combination of reducing emissions and eliminating carbon.

And Drs. Joppa said recent disruptions in the oil and gas markets have not convinced him of the need to slow down the process towards renewable energy sources. “I would say I haven’t seen anything that convinces us that we should do more than just keep moving forward,” he said.

Microsoft is also active in advancing its climate agenda beyond its own business. When the Securities and Exchange Commission asked the public for input on how to certify corporate climate change disclosure, Microsoft said it would support the commission’s development of such advertising rules.

The government’s move to force companies to adopt climate policies will meet some resistance in Washington – especially as Russia’s invasion of Ukraine has led to rising energy prices and increased demand for oil and gas.

“Private companies are free to pursue net-zero policies regardless of their understanding – as long as they comply with the law, this is not a matter of public policy,” said Katie Tubb, senior policy analyst for energy and the environment. Heritage Foundation, a conservative policy group, in an email. “Of greater concern is whether policymakers try to use government force to coerce or whether such efforts are needed in the private sector.”

Theoretically, Microsoft’s huge profits give it the means to achieve its goals. And the company has succeeded in reducing emissions from its own operations and from the electricity that powers those operations, known in industry jurgen as Scope 1 and Scope 2 emissions. This is down 17 percent in the 12 months to June, and with more purchases of clean power and efficiency measures, the company aims to bring those emissions closer to zero by 2025, which Dr. Joppa said Microsoft still expects to achieve.

Scope 3 is more difficult to reduce emissions – from the company’s supply chain and its customers. Microsoft’s Scope 3 emissions are about 50 times larger than the Scope 1 and 2 combined, and it grew 23 percent year-over-year in June, after small declines in previous years. The jump came from three main sources: the energy used to build the data center; Power consumption by suppliers; And when consumers used Microsoft devices, there was an increase in energy, which led to the use of Xbox due to the epidemic.

Nevertheless, Microsoft aims to halve its Scope 3 emissions by 2030. And by removing millions of tons of carbon a year from the air, it hopes to reduce its total emissions to zero or low. Air. Decades.

An important factor will be the rapid development of carbon removal technologies, which are small scale and expensive. Recycling is currently Microsoft’s main carbon offset. The company said it has contracts to remove 2.5 million metric tons of carbon, but it represents only 18 percent of its carbon emissions in the year to June. Dr. Joppa said Microsoft could accomplish its goals, even if the technology removes carbon directly from the air.

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