REDMOND – In the latest move by Big Tech to address climate change, Microsoft has promised to be “carbon negative” within the decade and to use its technology, money and influence to drive down carbon emissions across the economy.
Microsoft’s initiative, rolled out Thursday morning, commits the company by 2030 to removing more carbon from the environment than its own operations and its supply chain emit each year. By 2050, Microsoft says it will have eliminated as much carbon as the company has generated since its founding 45 years ago.
Microsoft says it also will push suppliers, customers and policymakers into more carbon-cutting actions and will invest $1 billion over the next four years to speed the development of technology that can remove carbon from the atmosphere — “technology that doesn’t fully exist today,” President Brad Smith said Thursday during the company’s presentation at its Redmond campus.
Microsoft’s carbon “moonshot,” as Smith called it, puts the software and cloud-computing giant at the head of the tech sector on climate policy. Rival Amazon, for example, has given itself until 2040 to become merely “carbon neutral.”
That moonshot didn’t satisfy some climate policy advocates. Greenpeace reacted to Thursday’s announcement by pointing to Microsoft’s cloud-computing contracts with oil and gas companies and other carbon-intensive businesses.
“Teaming up with Exxon, BP, Chevron and others to extract more oil and gas is a major disconnect” with its carbon targets, the environmental group said in a statement.
Although Microsoft has adopted other climate initiatives — the company has been purchasing so-called carbon credits to offset all its emissions since 2012, and it penalizes its internal divisions for all the carbon they generate — its latest move represents a substantial step-change in reach, some climate experts say.
For starters, instead of relying primarily on offsets to reduce its carbon footprint, Microsoft will ramp up efforts to physically reduce emissions produced directly and indirectly by its operations. One example: by 2025, it plans to use only renewable energy for the global network of data centers that supports Microsoft’s cloud service, which is second in market share only to Amazon’s.
Microsoft will also expand its carbon-reduction efforts into its supply chain, which, as Smith noted, accounts for most of the 16 million metric tons the company is responsible for emitting each year.
Microsoft’s commitment to use its technology, political influence and “balance sheet,” as Smith put it, may be the most significant elements of the initiative, some experts say.
For example, Microsoft will offer its suppliers new data tools to measure their own carbon emissions so they can meet Microsoft’s new supply-chain requirements. The company will also lobby for policies — such as national laws that mandate a per-ton price on carbon emissions — that could help drive deeper carbon reductions.
With its $1 billion climate innovation fund, Microsoft hopes to spur the development of nascent cutting-edge technologies that could slow global warming.
“It’s a unique capability we have as a long-term investor to be able to participate in more risky scenarios,” said Chief Financial Officer Amy Hood, who joined Smith, CEO Satya Nadella, and Chief Environmental Officer Lucas Joppa at the presentation.
These broader moves, observers say, could have a much larger effect on overall carbon reduction than anything Microsoft does internally.
Microsoft’s “own emissions, in the grand scheme of things, are relatively very small,” said Elizabeth Sturcken, who works with companies on environmental initiatives at the Environmental Defense Fund. “So it matters more, in terms of creating the changes that the planet needs, that [Microsoft] is using their money to spark new technology, [and] that they influence their customers and push their suppliers to lead.”
Thursday’s announcement adds to a growing movement by the tech sector to get more involved in tackling climate change and other social issues, such as affordable housing and cybersecurity — and comes amid stepped-up scrutiny of the sector by policymakers and activists.
In September, Amazon CEO Jeff Bezos announced a plan to make the company carbon neutral by 2040, which he said would be a decade earlier than the 2050 deadline set by climate scientists working to avoid a catastrophic increase in global temperatures.
“We’re done being in the middle of the herd on this issue,” Bezos said at a news conference announcing the initiative.
Google has rolled out a series of environmental initiatives, including providing analytical tools to cities that let them calculate their own carbon emissions.
As with other business-backed climate initiatives, Big Tech’s carbon-cutting strategies are often met with skepticism.
Some industry analysts worry that ambitious efforts to cut emissions could hurt tech firms’ profitability or ability to grow. That’s an important concern for Microsoft at a time when it is rapidly expanding its lucrative cloud-computing business as it competes with Amazon and other tech giants.
“It’s a very tough balancing act,” said Daniel Ives, a Wedbush Securities analyst who follows Microsoft. “They need to make sure that they target a date [for carbon reductions] that gives them room and flexibility and doesn’t negatively impact their business model.”
Some environmental activists — including many of the tech firms’ own employees — have complained that the industry’s carbon initiatives often don’t go far enough. By selling services to the oil and gas industry, activists say, Microsoft, Amazon, and other data companies are encouraging the production of hydrocarbons, which many climate experts say must be dramatically curtailed to avoid catastrophic global warming.
Although Microsoft’s announcement Thursday largely ignored questions about the company’s relationship with oil and gas companies, Smith addressed the issue in an interview afterward. By working with oil and gas companies, Smith said, Microsoft is “helping [these] companies transition from producing one kind of energy product to producing new or additional kinds of energy products” that are less carbon intensive.
If critics fear that Microsoft’s cloud technology will help oil companies keep the price of oil low, thereby encouraging consumers to burn more of it, he said, there are plenty of ways to counteract that — for example, by charging consumers for every ton of carbon they emit.
“If somebody wants to see an increase in the price of oil, there’s about 10 ways that you can do it,” Smith said. “And, you know, cutting off technology doesn’t even make the list of the top 10.”
Nardia Haigh, an associate professor at the University of Massachusetts-Boston and an expert in corporate climate initiatives, said that Microsoft deserved praise for its goals, especially its promises to push for stronger policies and to invest $1 billion in new climate technologies.
“Jointly, these could have a lasting effect on societal climate mitigation and adaptation,” Haigh said.
But Haigh, author of “Scenario Planning for Climate Change,” wanted more details about how Microsoft aims to achieve its ambitious goals. For example, Haigh wondered if Microsoft will link bonuses and other executive compensation to the company reaching its climate targets.
Although that topic wasn’t raised during Microsoft’s presentation — a company spokesperson said later that it had “nothing to share on this at the moment” — Haigh said such a policy would impact Microsoft as well as its corporate peers.
“A company as powerful as Microsoft has the opportunity to change executive incentives — and corporate priorities —throughout the industry,” she said.