Microsoft — full event log

Scope 3 Cat 4 (upstream transportation and distribution) was 305,000 tCO2e in FY23, up from 243,000 tCO2e at the FY20 base. As of FY23, Microsoft adopts the GLEC Framework for its Devices and Cloud business groups to improve accuracy. In addition, Microsoft implemented a mode-shift initiative from air to ocean freight, delivering an estimated 95,000 tCO2e annual savings. SAFc are also applied to air cargo emissions (Cat 4). 97% of Cat 4 emissions are calculated using supplier data.

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To address Cat 2 (capital goods, 38.24% of total emissions), Microsoft pilots net-negative embodied carbon limestone-alternative concrete derived from algae cultivation, achieving ~65% embodied carbon reduction vs conventional. 37 datacenters meet LEED Gold globally. New construction standards prohibit combustion for daily use in new offices and require high-efficiency electric kitchens/HVAC, non-fossil backup power. Using Building Transparency's EC3 tool, shifted to process-based methodology with third-party verified data for tracking embodied carbon.

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Reuse and recycle rates for servers and components reached 89.4% in FY23 (target 90% by 2025). Six Circular Centers operational (Amsterdam, Dublin, Boydton, Singapore, plus new Quincy and Chicago in 2023); two more planned for England/Australia. Developed patent-pending IDARS (Intelligent Disposition and Routing System) using Dynamics 365 to optimize disposition path for every cloud hardware part. Microsoft servers found to be 86% recyclable vs 67% industry average. New Sustainable Rack Packaging system estimated to divert 100,000 metric tons of waste from landfill.

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Long-term agreement with Orsted for bioenergy with carbon capture and storage (BECCS), adding carbon capture to existing heat and power plant. Also signed long-term offtake with Mombak for Amazon reforestation removal.

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As of FY23, 15,849 acres designated as permanently protected vs goal of 11,000 acres by 2025. Added 3,579 acres in US in 2023 plus 12,270 acres in Belize previously.

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76.5% of FY23 emissions originated from suppliers. Microsoft piloted ESG value chain solution in Sustainability Manager to collect granular supplier emissions. Partnered with 3Degrees to launch Supplier REach portal helping smaller suppliers procure carbon-free electricity. 59 suppliers transitioned to renewable energy in FY23 (six to 100%), contributing 105,000 mtCO2e avoidance. New requirement announced: select scale, high-volume suppliers must use 100% carbon-free electricity for Microsoft-delivered goods and services by 2030. 99.4% of suppliers responded to CDP climate change questionnaire in 2023.

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Single-use plastic in product packaging reduced from 5.7% (FY20) to 2.7% (FY23); packaging recyclability at 93.9% (target 100% by 2030); post-consumer recycled content in device packaging at 53.8%. Surface Thunderbolt 4 Dock uses 20% ocean-bound plastic. Expanded repairable Surface portfolio (Go 4, Laptop Studio 2, Laptop Go 3). Xbox is first carbon-aware gaming console — schedules updates when grid carbon intensity is low; Shutdown mode cuts power 20x vs Sleep. Surface Laptop Studio 2 uses 65% less energy than ENERGY STAR limit.

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Microsoft sources 100% of its electricity from renewable sources globally, achieved and maintained in FY23. The primary mechanism is long-term power purchase agreements (PPAs and virtual PPAs) that Microsoft views as driving new, additional renewable capacity — with a contracted portfolio exceeding 19.8 GW across 21 countries as of 2023. These are supplemented by unbundled energy attribute certificates (RECs, GOs, REGOs, I-RECs, LGCs, J-Credits, NFCs, TIGR, GEC, NZECS) in markets where direct PPAs are not yet feasible. Microsoft is targeting carbon-free PPAs to cover 100% of carbon-emitting electricity consumed by datacenters, buildings and campuses by 2025. The firm is a RE100 signatory and this target (Low1) is part of its SBTi commitment. In FY23, 22,676,208 MWh (94.5% of total energy) was from renewable sources, with 3,341 MWh from on-site solar generation.

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In FY23, Microsoft contracted 5,015,019 metric tons of carbon removal to be retired over next 15 years, retiring 605,354 tCO2e in-year. Building a balanced portfolio across low, medium, and high durability solutions. Key 2023 deals: Mombak (Amazon reforestation), Orsted (BECCS in Europe — adding carbon capture to existing heat/power plant with geological storage), Heirloom (direct air capture from limestone, up to 315K tons over multi-year), and novel pathways with UNDO and Lithos for enhanced rock weathering. Target is to remove more carbon than emitted by 2030 and remove all historical operational emissions by 2050. Contracts signed as of Dec 2023 will provide ~875,000 tCO2e toward the 2030 goal of >5M tons/year.

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Microsoft is among the world's largest corporate renewable energy purchasers. In 2023, Microsoft increased its contracted renewable energy portfolio to over 19.8 GW across 21 countries, signing new PPAs with AES (Brazil 154 MW), Constellation Energy (Virginia), Powerex (Washington — first commercial entity to use 24x7 Clean Load Service matching hourly datacenter demand with carbon-free hydro/solar/wind), Contact Energy (NZ), and Lightsource bp (Poland). Target is 100/100/0: 100% of electricity consumption matched by zero-carbon energy purchases 100% of the time by 2030, with 100% renewable energy by 2025. Total renewable electricity use in FY23 was 23.6 million MWh. Also signed agreement with Helion for first fusion power plant (50 MW+) targeted by 2028.

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As of FY23, Scope 3 Category 1 values now incorporate emissions calculated using LCA coefficients for the portion associated with the manufacture of Microsoft devices. This increases data quality and accuracy for the purchased goods category.

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As of FY23, Scope 3 Category 4 incorporates GLEC Framework for Devices and Cloud business groups. Additionally, SAFc-based emissions reductions (well-to-tank + tank-to-wake) are applied against air travel emissions in Cat 4 and Cat 6.

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The Nuance acquisition completed March 2022 is included in FY23 (the reporting year) data, consistent with Microsoft's policy to begin including acquired entity data the year following close. Emissions from M&A completed during FY23 are excluded until the following year.

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Microsoft recalculated base year and past years' Scope 3 emissions following LCA methodology changes for Cat 1 and GLEC framework adoption for Cat 4, in line with its significance-threshold recalculation policy.

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All Scope 1, 2 and 3 emissions have annual third-party limited assurance under AICPA AT105 standards, performed by Deloitte & Touche LLP. 100% of reported emissions verified. Covers energy consumption, renewable electricity, water, and net GHG within carbon neutral boundary.

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Microsoft contracted 5,015,019 metric tons of carbon removal in FY23, building a balanced portfolio across low-, medium- and high-durability solutions including improved forest management (IFM), afforestation/reforestation, mangrove restoration (Delta Blue Carbon), bioenergy with carbon capture and storage (BECCS), and direct air capture (DAC). The firm has published high-quality CDR criteria and uses a Climate Innovation Fund ($1B total, $761M allocated) to accelerate removal technologies. Microsoft intends to neutralise all residual Scope 1, 2 and 3 emissions with permanent removals by 2030. Cancelled credits in FY23 totalled ~605,000 tCO2e across 16 forestry projects. By 2050, Microsoft aims to remove an amount equivalent to all CO2 emitted since its founding in 1975.

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Datacenters account for the vast majority of Microsoft's Scope 1 and location-based Scope 2 emissions (Scope 1: 87,154 tCO2e; Scope 2 location-based: 7,779,660 tCO2e in FY23). Microsoft pursues energy efficiency improvements to reduce the number of datacenters needed overall and is electrifying its global campus operations fleet by 2030. In FY23, energy efficiency and electrification measures delivered ~4,680 tCO2e of Scope 1+2 reductions, while company car fleet average emissions fell from 95.72 g/km (FY22) to 81.65 g/km (FY23). Microsoft also operates on-site solar (560-kW canopy at LinkedIn Omaha providing ~20% of building electricity) and has deployed sustainable aviation fuel certificates (SAFc) contracts with United Airlines, Alaska Airlines, and IAG to reduce air travel emissions.

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Scope 3 Cat 1 (purchased goods, $5.6M tCO2e) and Cat 2 (capital goods, $5.9M tCO2e) dominate Microsoft's value chain footprint. Microsoft's strategy has five prongs: (1) improving measurement through LCA coefficients and supplier-reported data (51% of Cat 1 from supplier data, 70% Cat 2); (2) increasing efficiency by reducing datacenters needed and reimagining circularity of cloud hardware; (3) forging partnerships; (4) building markets through low-carbon materials procurement; and (5) advocating for policy change. In FY23, supplier emissions reductions driven by the Supplier Code of Conduct requirements delivered an estimated 638,000 tCO2e annual savings in Cat 2. The SBTi-validated Int1 target requires a 30% Scope 3 intensity reduction per USD revenue by 2030 — 97.9% achieved by FY23.

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Scope 3 Cat 11 (use of sold products) was 2,158,000 tCO2e in FY23, down from a FY20 base of 2,600,000 tCO2e. Microsoft measures this via telemetry from Xbox consoles and Surface devices currently in use by end-users. The reduction strategy focuses on improving energy efficiency of devices, increasing the share of renewable electricity in customer grids (to reduce location-based emission factors), and the circular reuse of hardware. Third-party devices running Microsoft software are currently outside the carbon commitment scope. Deloitte provides limited assurance on this metric under management's criteria (gross emissions and gross emissions net of renewable electricity).

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Business travel (Cat 6) was 124,000 tCO2e in FY23, down sharply from the FY20 base of 385,000 tCO2e. Employee commuting (Cat 7) was 187,000 tCO2e vs 317,000 tCO2e at baseline. Microsoft applies sustainable aviation fuel certificates (SAFc) to reduce air travel emissions on a well-to-tank and tank-to-wake basis, having contracted SAFc with United Airlines, Alaska Airlines, and IAG in FY23. Microsoft also maintains carbon neutrality for its Scope 1 + market-based Scope 2 + business air travel boundary (Abs4, achieved and maintained since FY22) through a combination of energy efficiency, renewable electricity procurement, and carbon removal offsets.

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Adapted approach to shift from spend- to process-based methodologies for measuring embodied carbon impact of construction materials, using Building Transparency's EC3 tool with third-party verified data.

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Microsoft committed to improve water use efficiency by 40% across global owned datacenter operations by 2030 from a 2022 baseline. New datacenters designed to consume zero water for cooling.

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FY23 Scope 3 emissions increased 30.9% from 2020 baseline driven by construction of more datacenters, embodied carbon in building materials, and hardware components (semiconductors, servers, racks). Overall Scopes 1-3 up 29.1%.

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In FY23, met 2030 water access target of providing 1.5 million people with access to clean water and sanitation solutions in Brazil, Chile, India, Indonesia, and Mexico.

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Includes a new requirement for select scale, high-volume suppliers to use 100% carbon-free electricity for Microsoft delivered goods and services by 2030. Builds on company-wide initiative with >80 discrete measures to reduce Scope 3.

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Shifted from a spend-based approach to using product-specific carbon footprints to account for emissions of devices. Enhanced LCA approach moving from generic model based on secondary data to a more detailed model including more supplier data.

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In 2023, Microsoft joined the WateReuse Association's Coalition for Water Recycling as founding member to advance water reuse adoption across the United States.

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Launched two new Circular Centers in Quincy, Washington and Chicago, Illinois in 2023. Servers/components reuse and recycle rate reached 89.4% (target 90% by 2025).

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Datacenters delivered a design rating of 1.12 PUE in FY23. Deployed low-power server states across ~1 million servers (up from a few thousand in 2022), reducing unallocated server energy use up to 25%. Power-aware workload allocation and SLA-driven harvesting cut datacenter power infrastructure ~7% in 2023. CPU oversubscription reduced Azure hardware needs ~1.5% (3x improvement vs 2022). New datacenters designed to consume zero water for cooling on AI workloads.

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Signed 10-year contract with World Energy for SAF certificates aiming to replace 43.7M gallons of fossil jet fuel; co-funded large-scale SAF purchase with International Airlines Group; joined Sustainable Aviation Buyers Alliance (SABA) and Roundtable on Sustainable Biomaterials. Cloud Logistics applied GLEC framework, saving over 90,000 mtCO2e via shifting cargo to more carbon-efficient transport, consolidation, network design. Launched initiative to build first electric interstate trucking corridor in the US.

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Microsoft set a goal to be water positive by 2030, with targets to replenish more water than consumed (focus on 41 water-stressed watersheds), reduce water intensity by 40% at datacenters, and provide 1.5M people with WASH access. In FY23 contracted >25.4M cubic meters lifetime water replenishment benefits.

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Four years ago, Microsoft committed that by 2030 we would become carbon negative, water positive, zero waste, and protect more land than we use.

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Microsoft announced January 2020 a target to reduce absolute Scope 1+2+3 emissions by more than half by 2030 from a FY2020 base year. This is an SBTi-related target and covers all material Scope 3 categories.

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Microsoft announced on 16 January 2020 its goal to be carbon negative by 2030 (annually removing more emissions than total S1+S2+S3 combined) and by 2050 to remove all CO2 emitted since founding in 1975. Target NZ1 covers S1, S2 and S3. To be achieved via reductions (Abs1-3) and a portfolio of NETs including forestry, soil carbon, BECCS and DAC.

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SBTi certified Microsoft's target to reduce Scope 3 GHG emissions intensity per unit of revenue by 30% by 2030 from a 2017 base year. As of FY23, 97.90% of target achieved (0.0000784 vs 0.0001110 mtCO2e/USD). Alongside Low1 (100% renewable electricity), identified as ambitious by SBTi.

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In 2017 Microsoft set a target to reduce absolute Scope 1 plus Scope 2 (market-based) emissions by 75% by 2030, against a 2013 baseline. As of FY23, 55.36% of target achieved.

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Microsoft set a target (Low1) to reach 100% renewable electricity by 2030 from a 2014 base year of 70%. Target achieved and maintained in FY23. Part of RE100 and SBTi commitments. Achieved through PPAs, vPPAs, unbundled EACs.

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