Chasing Microsoft’s climate goals runs into headwinds
Microsoft has an ambitious plan to cut its carbon emissions. But on Thursday, the company reported a large increase in greenhouse gases emitted from its operations and its products, a reminder of the challenges companies face trying to clean up their businesses.
After small declines in 2020 and 2019, Microsoft’s carbon emissions increased by 21.5 percent in the 12 months to June 2021. The growth was driven almost entirely by emissions from the energy used to build data centers and to build devices — such as the Xbox and Surface tablets — and from the power that Microsoft estimates its products consume when people use them. use.
Microsoft tries to show that with committed leaders and adequate funding, companies can effectively reduce their net emissions to zero in the coming years, while bolstering international efforts to limit global warming. . But the rise in Microsoft’s emissions suggests it and other companies may have trouble meeting their targets. And since strong demand for the products has resulted in growth, it’s a reminder that strong business growth can often mean pumping more greenhouse gases into the atmosphere.
Still, Microsoft leaders say they could be “carbon negative” by the end of the decade by cutting emissions and using a variety of measures to remove carbon from the atmosphere. “We are still fully committed – and absolutely sure – of our ability to meet our 2030 commitment,” said Lucas Joppa, Microsoft’s chief environmental officer.
Many large companies have plans to cut their emissions, and are under pressure from shareholders to do more. Investors have also pressured oil and gas companies to move from fossil fuels to renewable energy.
Microsoft is the first major tech company to report on the progress of 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 larger distribution network and a much wider supply chain, has a target of 2040.
In a new move, Microsoft indicated on Thursday that it will not take special actions for energy companies involved in extracting fossil fuels unless they have a “net zero” target. The term means no carbon emissions overall, a goal companies typically hope to achieve through a combination of emissions reduction and carbon removal.
And Dr. Joppa said the recent disruptions in the oil and gas markets have not convinced him of the need to slow down the move toward renewable sources of energy. “I would say I haven’t seen anything that would have convinced me that we should be doing anything other than moving fast,” 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 corporate climate change disclosures could be standardized, Microsoft said it would support the commission’s development of such disclosure rules.
The government’s moves to push companies to adopt climate policies may meet some resistance in Washington – especially since rising energy prices due to Russia’s invasion of Ukraine have prompted calls to ramp up oil and gas production. has done.
“Private companies are free to pursue net-zero policies regardless of their understanding – as long as they are following the law, it is not a matter of public policy,” said Katie Tubb, senior policy analyst for energy and environment. ” The Heritage Foundation, a conservative policy group, in an email. “More worrying is that policy makers are trying to use government coercion to pressure or even require such efforts in the private sector.”
In theory, Microsoft’s huge profits give it the means to achieve its goals. And the company has had success cutting emissions from its own operations and from the electricity that powers the operations, which are known in industry jargon as Scope 1 and Scope 2 emissions. These fell 17 percent in the 12 months through June, and with more purchases of clean electricity and efficiency measures, the company aims to bring those emissions closer to zero by 2025, a goal that Dr. Joppa said Microsoft still hopes to achieve.
It’s very hard to reduce Scope 3 emissions — those from the company’s supply chains and those from its customers. Microsoft’s Scope 3 emissions are about 50 times as large as that of Scopes 1 and 2 combined, and after a small decline in previous years, grew 23 percent in the year through June. The jump came from three main sources: the energy used to build the data center; electricity consumed by suppliers; And energy is spent when customers use Microsoft devices, which as the pandemic spurred Xbox use.
Still, 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 on a net basis. decade.
An important factor will be the rapid development of carbon removal technologies, which are small-scale and costly. Deforestation is currently Microsoft’s main method of carbon removal. The company said it has contracts to remove 2.5 million metric tons of carbon, but that reflects only 18 percent of its carbon emissions in the year through June. Dr. Joppa said Microsoft can meet its goals even if the technology that removes carbon directly from the air doesn’t work.
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