Making Carbon Neutrality Everyone’s Responsibility at Microsoft

Microsoft has a long tradition of tackling tough challenges at a global scale. We have always focused on how our technology can enrich people’s lives, build businesses, and inspire and change the world.

Working on the issues of energy use and environmental change provides another opportunity to make a difference in the world. It’s the right thing to do. And it’s also an opportunity to promote positive change, as the world transitions to new ways of using energy and managing natural resources. That’s why today, Microsoft is taking a significant step to further reduce our environmental footprint.

Beginning in fiscal year 2013 (which starts this July 1), Microsoft will be carbon neutral across all our direct operations including data centers, software development labs, air travel, and office buildings. We recognize that we are not the first company to commit to carbon neutrality, but we are hopeful that our decision will encourage other companies large and small to look at what they can do to address this important issue.

In addition to our commitment to carbon neutrality, the part I’m most excited about is our plan to infuse carbon awareness into every part of our business around the world. To achieve this goal, we have created an accountability model which will make every Microsoft business unit responsible for the carbon they generate – creating incentives for greater efficiency, increased purchases of renewable energy, better data collection and reporting, and an overall reduction of our environmental impact.

To put this into action, we’re creating a new, internal carbon fee within Microsoft, which will place a price on carbon. The price will be based on market pricing for renewable energy and carbon offsets, and will be applied to our operations in over 100 countries. The goal is to make our business divisions responsible for the cost of offsetting their own carbon emissions.

The carbon price and charge-back model is designed to provide an economic incentive for business groups across Microsoft to reduce carbon emissions through efficiency measures and increased use of renewable energy. Business operations impacted by the new carbon price include data centers, software development labs, office buildings, and business travel. For emissions not eliminated through efficiency measures, Microsoft will purchase renewable energy and carbon offsets. 

The carbon fee is another step in our broader company commitment to environmental leadership, from our facilities and data centers, to our supply chain, to the efficiency of our software products and services. We are continually looking for opportunities to advance these efforts. Here are just a few examples of steps we’ve taken recently:

• A smarter buildings pilot on Microsoft’s Redmond campus that uses software solutions to make our buildings more energy efficient, projected to achieve energy savings of approximately $1.5 million dollars in fiscal year 2013, and earn back our investment in only 18 months.

• Microsoft is working with CarbonSystems  to implement an Enterprise Sustainability Platform, which automatically captures and extracts environmental data from multiple sources, uncovering more opportunities to identify how we can reduce our carbon footprint.

• We are challenging ourselves and our industry to think about where energy is used and potentially wasted in IT. We have published a whitepaper which we hope will catalyze a stronger focus on the large range of opportunities throughout our industry to drive for greater efficiency.

Earlier this month, the U.S. Environmental Protection Agency recognized Microsoft as the third largest purchaser of green power in the U.S., purchasing more than 1.1 billion kilowatt-hours (kWh) of green power annually. This is enough green power to offset 46 percent of our electricity use, and is the annual equivalent to taking more than 150,000 passenger vehicles off the road.

We believe climate change is a serious challenge requiring a comprehensive and global response from all sectors of society. This carbon charge-back model is one way we seek to both reduce our impact and test new approaches which we hope are broadly useful for other organizations.

For more information on our carbon neutral strategy, read our whitepaper, “Becoming Carbon Neutral: How Microsoft is Becoming Lean, Green, and Accountable.”  You can also read more about this and our other environmental efforts on Microsoft’s blog Software Enabled Earth.

Posted by Kevin Turner
Chief Operating Officer, Microsoft

Editor’s Note: An earlier version of this blog post misstated the amount of green power Microsoft buys on an annual basis. The post has been updated with the correct amount.