Melanie Nakagawa, Chief Sustainability Officer, and Brad Smith, Vice Chair and President
Today, Microsoft published the 2022 Environmental Sustainability Report. 2022 was a year of innovation, partnership, and progress against our commitments, all while helping our customers, partners, and the world move toward a more sustainable future. You can read the foreword below and the explore the report in its entirety here.
2022 marked the sixth warmest year in history. Extreme weather caused devastating droughts, wildfires, famine, floods, and heat waves with alarming frequency. We felt the effects of climate change like never before, and as the planet warms, we’ll continue to see and feel the negative impacts on ecosystems and communities around the world. The most recent report from the Intergovernmental Panel on Climate Change (IPCC) underscores the severity of the climate crisis, and the urgent need for global collective action. Meaningful climate action requires an enduring commitment from both government and business, with the private sector playing an increasingly important role in the transition from pledges to progress. As we reflect on the seriousness of the climate crisis, we have expanded our ambition to meet this urgent climate need by investing in a broad range of initiatives, technologies and approaches that support a net zero future.
Microsoft’s approach to addressing the climate crisis starts with the sustainability of our own business. In 2020, we made a bold set of commitments: to be a carbon negative, water positive, zero waste company that protects ecosystems – all by 2030. Three years into this journey, we remain steadfast in our commitment. 2022 was a reminder that to mitigate the most severe impacts of climate change, our commitments need to extend beyond our four walls, and we must continue to accelerate investments that will enable progress for decades to come.
In 2022, we launched Microsoft Cloud for Sustainability, a comprehensive suite of enterprise-grade sustainability management tools. We also helped to advance a set of global sustainability initiatives that aim to benefit every person and organization on the planet. These include accelerating the availability of new climate technologies through our Climate Innovation Fund, strengthening our climate policy agenda, helping to develop a more reliable and interoperable carbon accounting system, advocating for skilling programs to expand the green workforce, and working to enable a just transition for the vulnerable populations of the global south.
We believe that Microsoft has an important role to play in developing and advancing new climate solutions, but also recognize that the climate crisis can’t be solved by any single company, organization, or government. The global community needs partnerships, new innovations, policies, and global commitment to ensure a healthy future for all.
Microsoft’s own sustainability is our first sphere of influence, and we remain focused on getting our own house in order and delivering on our 2030 commitments. We made ambitious commitments in 2020 and we knew that progress would not always be linear. These commitments are rooted in science and take the necessary steps to protect our ecosystems and prevent the most severe impacts of climate change. We are firmly focused on achieving our 2030 commitments and making the right long-term investments that support the sustainability of our business for decades to come. In addition to our long-term focus, it’s important to pause and evaluate our progress in 2022.
In 2022, our business grew by 18% and our overall emissions declined by 0.5%. This in part is a result of a reduction in our direct operational (Scope 1 and 2) emissions by 22.7%. At Microsoft, Scope 1 and 2 emissions account for less than 4% of total emissions, while indirect emissions, or Scope 3, account for more than 96%. Our Scope 3 reported emissions increased slightly in 2022, by 0.5%, despite a 25% increase in purchased goods and services due to business growth. The more positive outcomes in 2022 are the result of improvements in our operations, real-time device telemetry-based measurement, renewable energy investments, sustainable aviation fuel (SAF) purchases, and procurement of unbundled renewable energy certificates (RECs).
While we continue to work to reduce our Scope 1 and 2 emissions to near zero, Scope 3 is the ultimate decarbonization challenge. It necessitates the coevolution of best practices for business, technology, and policy among thousands of global stakeholders. When we made our carbon negative commitment in 2020 it wasn’t just a challenge to support the sustainability of our business, it was also an invitation to the world to participate in this journey, translating ingenuity into action, and action into impact. In addition to our carbon negative commitment, we’ve also made encouraging progress toward our 2030 commitments in water, waste, and ecosystems:
We contracted for replenishment projects that are estimated to provide more than 15.6 million m3 in volumetric water benefits, increasing our running total of replenishment projects to 35 million m3. Additionally, we provided more than 850,000 people with access to clean water and sanitation solutions, including 163,000 in Brazil, India, Indonesia, and Mexico.
We increased our reuse and recycle rates of all cloud hardware to 82% and continue to pace toward our 2030 reuse and recycle goal of 90%. We also reduced single-use plastics across all Microsoft packaging to 3.3% and are on track to eliminate their use by 2025. In total, we have diverted 12,159 metric tons of solid waste from landfills.
We continue to maintain our commitment to protect more land than we use. In 2022, 12,000 of the over 17,000 acres of contracted land were officially designated as protected. The amount of land protected in 2022 exceeds the approximately 11,200 acres of land we currently use.
Our second sphere of influence is customer sustainability. As a technology company, we have a role to play with the thousands of corporate customers who put their trust in Microsoft technology. The majority of our customers have already made a climate pledge and Microsoft is working to help them move from pledges to progress.
While Microsoft’s emissions footprint is a tiny percentage of global emissions, we also have a role to play in helping reduce or remove the other 99.97% of global emissions. It’s important that our approach to sustainability extends beyond our own four walls and supports the sustainability needs of our customers.
Companies can only manage what they can measure, and Microsoft is committed to helping our customers measure their environmental impact in a timely and accurate manner. In June 2022, we launched Microsoft Cloud for Sustainability, a comprehensive environmental sustainability management platform that includes Microsoft Sustainability Manager. These new digital tools can interoperate with virtually any business system and unify data intelligence for organizations at any stage of their sustainability journey. Sustainability Manager enables organizations to record, report, and reduce their Scope 1, 2, and 3 emissions.
Azure customers also benefited from significant upgrades to the Emissions Impact Dashboard (EID), which helps customers to understand the emissions impact that results from their use of the Microsoft Cloud. The EID estimates Microsoft’s direct and indirect emissions related to a customer’s cloud usage, as well as the emissions customers have avoided by running workloads in the cloud rather than on-premises.
In 2022, we also released a preview version of the Microsoft Planetary Computer to enable customers to measure, monitor, and subsequently to manage ecosystems that may be affected by their operations, and to make important decisions related to climate risk. The Planetary Computer draws on more than 60 petabytes of open-source geospatial data. This data, when combined with the analytic capabilities of our AI for Good Lab, delivers a new level of planetary insights to corporations and governments around the world.
Finally, our third sphere of influence is to impact global sustainability. Just as the reach of Microsoft technology extends to almost every country in the world, so should the impact of our sustainability programs.
In November 2022, the world’s climate leaders convened for COP27. There were important conversations at COP27 focused on the uneven impacts of climate change and how the least developed countries in the world are disproportionately affected. For example, the nations of Africa together account for less than 5% of global emissions but have experienced far more than their share of the negative impacts of climate change. At Microsoft, we are focused on climate policies and programs that will have a positive impact on all eight billion inhabitants of planet Earth.
Microsoft is deeply committed to using our voice to influence sustainability policies around the world. We support public policy initiatives to accelerate carbon reporting, reduction and removal, the transition to clean energy, water access and stress reduction, and the ability to measure, manage, and protect ecosystems. In 2022, we further committed to shaping public policy by releasing policy briefs on carbon and electricity.
In February 2022, Microsoft, ClimateWorks Foundation, and over 20 leading organizations launched an important new initiative called the Carbon Call. The objective of this program is to unify the world around a carbon accounting system that is more reliable and interoperable. ClimateWorks Foundation is building this program to a global scale. The Carbon Call now has over 80 signatories, and released its initial roadmap at COP27.
We believe that innovation is a critical component to solving the climate crisis, and that the investment of capital plays an important role in accelerating the availability of new solutions. Microsoft is investing in accelerating climate innovation through our $1 billion Climate Innovation Fund (CIF). We invest in innovative technologies and business models that have the potential for meaningful, measurable climate impact by 2030. Since the founding of the CIF in 2020, Microsoft has allocated more than $600 million into a global portfolio of more than 50 investments, including sustainable solutions in energy, industrial, and natural systems.
In November, we announced an expansion of our AI for Good Lab into Egypt and Kenya, building a new team of data scientists on the ground in Africa that will work to improve climate resilience. The work of these data labs will be informed by a new Africa AI Innovation Council comprised of representatives from leading African organizations.
Delivering on the ambition of the Paris Agreement will require a global initiative focused on the proliferation of sustainability skills throughout the labor market. In November 2022, Microsoft and BCG released a new report, Closing the Sustainability Skills Gap: Helping Businesses Move from Pledges to Progress. This report reinforces the need for employers and governments to invest in upskilling the current workforce through learning initiatives focused on sustainability knowledge and skills, to prepare the next generation for sustainability jobs of the future. Microsoft is working with partners to develop and share new sustainability learning materials to accelerate the development of the sustainability workforce of the future.
As we look toward 2030 – and beyond – we remain optimistic about our collective ability to decarbonize the global economy while continuing to grow and prosper as a global community. We will continue investing in three key areas that will enable the scale of sustainability solutions needed to address the climate crisis:
This will be a decade of innovation and decisive action, from expanding the use of AI to address sustainability to forging new public and private sector partnerships. To move from pledges to progress, we cannot be deterred by near-term challenges, and must remain focused on developing innovative new solutions and, in many cases, accelerating our actions. At Microsoft, we’re deeply committed to sustainability as a company, as a technology provider, and as citizens of planet Earth.
Tags: Africa data lab, Carbon Call, climate change, Climate Innovation Fund, Cloud for Sustainability, Environmental Sustainability, net zero, Paris climate agreement, Skills, sustainability, water positive
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