A wide-ranging environmental initiative unveiled by Microsoft this week represents some of the most aggressive goals that climate experts say they’ve seen.
Microsoft on Thursday pledged to become “carbon negative” by 2030, removing more carbon than it emits. And by 2050 it has vowed to erase a volume of carbon equal to all of the greenhouse warming gas that the company has emitted since launching in 1975.
This “raises the bar for corporate climate commitments,” said Sue Reid, vice president of climate and energy for Boston-based Ceres, a nonprofit that promotes corporate environmental sustainability. “What is brand new here is a major company committing to counterbalancing all of its emissions over its entire history.”
In addition, Microsoft is creating a Climate Innovation Fund through which it plans to invest $1 billion over four years to boost the development of new technologies globally to capture carbon, reducing its release and removing it from the atmosphere.
The company is also putting increased focus on the sizeable emissions that are not directly related to the company’s actions, but that comes from indirect activities. That includes carbon generated by its product supply chain, the materials in its buildings, employee business travel and even the electricity its customers use when plugging in Microsoft products.
“No one company can solve this macro challenge alone, but as global technology company, we have a particular responsibility to do our part,” said Microsoft CEO Satya Nadella at event Thursday morning at the company’s headquarters.
Experts internationally continue warning that drastic carbon-reducing actions are needed to stave off the worst environmental and societal damages. They connect increasingly frequent catastrophes, including the current fires searing Australia and a melting Arctic, to long-term changes in the climate.
The initiative “sounds quite holistic, and on that level is a standout,” said Paula DiPerna, a special advisor to the CDP, an international organization that helps track carbon emissions.
The announcement comes at a time that Amazon — Microsoft’s Northwest neighbor and one of its greatest rivals — has taken steps to burnish its environmental record and become more engaged in battling climate change.
“We’re done being in the middle of the herd on this issue — we’ve decided to use our size and scale to make a difference,” Bezos said at the time.
Amazon is the first signatory of the pledge, and Bezos urged other companies to sign on. The company declined to say who has joined them.
But while Amazon was praised for stepping up on the issue and setting carbon targets a decade earlier than what’s called for in the international Paris Agreement, its pledge is less ambitious than Microsoft’s initiative.
However, important distinctions set the two tech giants apart: Microsoft is predominantly a software and cloud company, and while two-thirds of Amazon’s operating profits come from its cloud division, the company’s massive online sales and shipping are more difficult to tame in terms of climate impact. Some also point to the relative age of the two companies — Microsoft launched in 1975 while Amazon started in 1994 — as contributing to their levels of engagement in environmental and social issues.
Here’s how the two companies roughly stack up:
- Microsoft reached carbon neutrality in 2012, while Amazon is aiming to be carbon net zero by 2040.
- Both companies are aiming to use 100% renewable power for their facilities; Microsoft’s goal is 2025, Amazon’s is 2030.
- Microsoft will be carbon negative by 2030, and aims to remove the equivalent of all of its historic emissions by 2050.
- Amazon is investing $100 million in reforestation; Microsoft is contributing $1 billion to the Climate Innovation Fund.
University of Washington political science professor Aseem Prakash gave Microsoft kudos for its actions — and for its PR savvy in the move.
“In terms of positioning itself vis-à-vis Amazon…. they have very clearly, categorically positioned themselves,” he said.
Microsoft’s announcement came two weeks after Amazon was criticized for threatening to fire employees for speaking publicly about the company without getting pre-approval. The company targeted two workers who have been leaders in a campaign calling for Amazon to take action on climate change.
Climate also took a more prominent role in this week’s debate among the Democratic presidential candidates.
When it comes to the timing of the news, “politically it’s absolutely brilliant,” said Prakash, who is the founding director of the UW Center for Environmental Politics.
Microsoft has put itself out in front on social and policy issues in the past. Its announcement last year of a $500 million affordable housing plan for the Seattle region, was followed by larger housing affordability initiatives from Apple and Facebook. Microsoft this week announced it will spend an additional $250 million on the housing plan.
Brad Smith, Microsoft’s president, told GeekWire that he hopes to see others follow the company’s approach to the climate, as well.
“I think it’ll be good for the world if companies that have strong balance sheets put some of their balance sheet to work to advance climate solutions,” he said.
He added, “For us there was some real learning gained on the housing side that we brought to the carbon side of this issue. One thing we learned is that the world needs to spend more money to address some of these problems. The second thing we learned was that the key to spending money effectively is to make sure the money flows where it’s not flowing already.”
But Microsoft and other cloud computing companies — Amazon included — have been called out for marketing their tools to petroleum companies whose products are contributing to climate change.
“The big elephant in the room is if you are pitching cloud computing business to oil and gas companies, what is the point of all the song and dance” about carbon reductions, said Prakash.
Microsoft for many years has been a leader on climate change issues. In 2012, the year that the company became carbon neutral, it also self-imposed a tax on its own carbon emissions to internally discourage actions that created the release of planet warming pollution.
Microsoft’s focus on putting a price on carbon is a key piece of its strategy, DiPerna said. Particularly when applying the price, or tax, to the indirect emissions.
“Recognizing that in order to reduce emissions you really need to price them, the fact they are doing it, an internal carbon tax, that’s a very significant development,” she said.
There are other companies taking notable action on climate change. They include:
- Intuit, the maker of TurboTax and other consumer software, pledged in September to be carbon negative by 2030, and then went even further, pledging to reduce its emissions 50-fold compared to its 2018 footprint. Those reductions should eventually cancel its carbon debt.
- Furniture maker IKEA has vowed become carbon negative, which they’re calling “climate positive,” by 2030.
- The electrical company Xcel Energy has committed to delivering 100% carbon-free electricity to customers by 2050, with an interim goal of reducing carbon emissions 80% percent from 2005 levels by 2030. Xcel operates in eight states.
While Microsoft is certainly a leader in climate action, as a producer of software, cloud services and video games, it’s a business with a somewhat easier task relative to other corporations when it comes to reducing its carbon footprint. Amazon, for example, has the challenge of addressing the impact of internationally shipping billions of packages a year.
Reid, of Ceres, applauded Microsoft for its ambition and transparency in how it’s accounting for emissions and tackling reductions. But she is anxious to see how some of the implementation plays out, particularly when it comes to unproven and even undeveloped technology for capturing carbon pollution that will be required to meet some of the goals.
DiPerna agreed. “There are [carbon capture technologies] that are on the horizon and we have to hope that they develop,” she said, “and they may not.”
Overall, the climate experts gave credit to Microsoft for pushing into new areas of climate commitment.
“This is fantastic. They are industry leaders,” Prakash said. “But our job is to keep the pressure on. They are doing this because we are all watching them.”
With reporting by GeekWire’s Todd Bishop from Redmond.