Microsoft's Four Pillar Approach Towards Sustainability

"Sustainability is no longer about doing less harm. It's about doing more good" -- Jochen Zeitz

These words aptly depict Microsoft’s (MSFT) new goals towards protecting the sustainability of our planet. The four announcements Microsoft made since January focus on carbon, water, ecosystems, and waste. Starting from reducing and removing carbon footprint to becoming water positive, Microsoft has laid out a roadmap to achieve these goals over the next 10 years by using technology. Here’s an overview.

Carbon Footprint

Over the years, the concentration of greenhouse gases (GHG) in the atmosphere has increased, resulting in catastrophic changes in the climate. GHG emissions are traced in the form of a carbon footprint, and for the last ten years, Microsoft has made significant investments to reduce its footprint. In January 2020, Microsoft announced its goal to be carbon negative by 2030, and ultimately remove all its carbon footprint since its foundation (emitted either directly or by electrical consumption) by 2050. Starting in 2021, the company will make carbon reduction an explicit aspect of its procurement processes for its supply chain.

By 2025, Microsoft will shift to a 100% supply of renewable energy. Its global campus operations vehicle fleet will be electrified by 2030. Microsoft has created a Climate Innovation Fund which will commit to invest $1 billion over the next four years to accelerate the development of carbon reduction and removal technologies.

Ecosystem

The damage to our ecosystem is alarming. According to a UN report, there are around 1 million animal and plant species are now threatened with extinction. The report points out that more than 40% of amphibian species, almost 33% of reef-forming corals and more than a third of all marine mammals are threatened. These numbers are grim and can have catastrophic implications on our ecosystem.

In April 2020, Microsoft announced the second step in its sustainability efforts, focusing on preserving and protecting the biodiversity and health of the world’s ecosystems. Microsoft’s AI for Earth program launched two-and-a-half years ago was a step in this direction. The program combines the power of Artificial Intelligence (AI) and expertise of leading ecologists and conservation technologists, and organizations around the world.

With its new announcement, Microsoft aims to put data and digital technology to work, “including through an ambitious program to aggregate environmental data from around the world and put it to work in a new Planetary Computer.” This would involve a lot of learning and collaboration with grantees and organizations worldwide. Microsoft will be working closely with Esri, a leader in geographical information system software.

Waste

Worldwide, each year, around 11.2 billion tons of solid waste are collected according to the United Nations Environment Programme. This is a result of our day-to-day activities at different levels—individual, company, sector, or country. This waste not only pollutes our land, harms other species, clogs waterways, contaminates air but also produces 5% of GHG emissions. 

In August, Microsoft announced its goal to achieve ‘zero waste’ for its direct operations, products, and packaging by 2030. The company plans to divert at least 90% of the solid waste headed to landfills and incineration from its campuses and datacenters. It further aims to manufacture 100% recyclable Surface devices, use 100% recyclable packaging (in OECD countries), and achieve, at a minimum, 75% diversion of construction and demolition waste for all projects.

To tackle the problem of e-waste, Microsoft plans to repurpose and recycle these devices through new Microsoft Circular Centers. The company will be using machine learning to process servers and hardware that are being decommissioned onsite which will help in decision making with regards to repurposing and reuse. Microsoft expects the Circular Centers to increase the reuse of its servers and components by up to 90% by 2025. In addition, Microsoft will be investing to digitize waste data across the company to identify opportunities to improve waste data collection. 

Water

“The third world war is at our gate, and it will be about water if we don’t do something about this crisis,” said Rajendra Singh, known as the “waterman of India.”

The growing shortage of water is a global concern. Only 2.5% of the water on Earth is fresh water, and nearly all of that water is frozen. According to the UN report, more than two billion people lack access to safe drinking water. According to the World Bank, climate-induced reduction in freshwater availability, coupled with increased demand, could reduce water availability in cities by more than 66% by 2050.

In September, Microsoft announced its goal to be water positive for its direct operations by 2030. Microsoft targets to replenish more water than it consumes on a global basis by 2030. According to Brad Smith, President, “As a global technology company, Microsoft is prepared to act on both accounts, taking responsibility for our own water use and partnering on technology platforms to help others do the same.”

Microsoft will be tackling water consumption by reducing water use intensity and replenishing water in stressed regions. Using technologies such as IoT and AI, Microsoft working to provide solutions like the Azure IoT Central government app templates, which includes remote, real-time water quality monitoring and water consumption monitoring, geared toward reducing water consumption. Globally, there are 4,717 “highly stressed” basins, which means that the amount of water withdrawn exceeds 40% of the renewable supply. Microsoft plans to replenish roughly 40 such basins. The company’s website reads, “Microsoft is taking responsibility for our own water use and partnering on technology platforms to help others do the same.”

Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. The report provides a glimpse of numerous initiatives and projects taken up by Microsoft in each of these four areas.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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