Microsoft celebrated its Cloud for Sustainability program's first birthday with the addition of new features. On a briefing call with journalists, executives said these enhanced capabilities will further Microsoft's sustainability goals, including to become carbon negative, water positive and zero waste by 2030.
Launched last June, Microsoft Cloud for Sustainability provides a set of environmental, social and governance (ESG) capabilities across Microsoft’s cloud portfolio in partnership with water sustainability leader EcoLab.
Speaking on a briefing call last week, Satish Thomas, Microsoft’s CVP of Industry Clouds, said while the company is undertaking its own green transformation, “Microsoft Cloud for Sustainability is our vehicle to productize and get [ESG capabilities] in the hands of our customers to help with their own journeys as well."
He added: “From a platform perspective, [Microsoft Cloud for Sustainability] supports the ability to unify the ESG data intelligence, building a sustainable IT infrastructure, and then of course, all towards the furtherance of minimizing the environmental footprint for the operational systems and more.”
What’s new in sustainabil-la-la land? Hint: complete scope 3!
The initial release of Microsoft Cloud for Sustainability focused solely on carbon emissions, but it will now also include both water and waste measurement models. The product will also incorporate the final five Scope 3 emissions — completing all fifteen Scope 3 categories — in addition to the available Scope 1 and 2 capabilities.
Scope 1 refers to emissions a company is directly responsible for, while Scope 2 refers to indirect emissions. Scope 3 encompasses emissions from a company’s activity. So, for instance, Scope 3 would include emissions from a company’s supply chain partners.
“Many organizations are currently tracking carbon emissions, but not doing it holistically,” said Thomas. “To help customers achieve that, I'm happy to share that we will be completing all fifteen Scope 3 categories, meaning customers can track it all with the Microsoft Cloud for Sustainability, which is huge.”
Scoop 3 emissions are infamously tedious to track. “It's challenging to collect and manage the Scope 3 data, because it relies on a lot of the inputs across the customer’s organization supply chain, but it's critical, because a large portion of these emissions are in Scope 3,” said Thomas.
Microsoft’s Cloud for Sustainability’s latest release also updates its Emissions Impact Dashboard, so organizations can track Scope 3 emissions related to cloud service use, while also tracking greenhouse gas emissions associated with Microsoft 365 services, according to a Microsoft press release.
Microsoft Chief Sustainability Officer (CSO) Melanie Nakagawa noted challenges related to tracking Scope 3 emissions are “nearly universal.”
“Today there are very few organizations that have the ability to truly source and analyze the range of data that is needed to accelerate our progress,” she said. “So we're investing to help create the data lakes needed to help to begin to address many of these challenges.”
CSRD: a quick back story
“Like a lot of our customers and partners, we're all operating amid growing regulatory pressure,” said Nakagawa. The European Corporate Sustainability Reporting Directive (CSRD) is one of many sustainability regulation entities, which as soon as next year, will require sustainability reporting.
Nakagawa said across the globe, there’s greater “demand for transparency into the progress for all of these companies across environmental, social and governance indicators.”
A new CSRD directive that went into effect in January of this year could affect up to 50,000 companies, an estimate given by the European Union. Microsoft’s Cloud for Sustainability is working to make reporting easier for customers while staying on track with regulation entities like CSRD.
“One of the new capabilities that we're working on is Project ESG lake. So essentially, what that does is it helps customers get their data set ready for quicker insights and simplified reporting,” explained Thomas. The ESG data lake can be used for advanced analytics, artificial intelligence (AI), and large language models (LLM) .
Collaboration is critical
Back in 2020, Microsoft set out to be carbon negative, water positive and zero waste by 2030, releasing its own Sustainability report every following year. In fact, in its most recent report, businesses grew 18% in 2022 while reducing overall emissions by 0.5%, according to Microsoft.
Nakagawa said collaboration between Microsoft teams has allowed it to pioneer steady advances in Microsoft Cloud for Sustainability.
“We have a really productive relationship with the commercial sustainability team,” Nakagawa said on the call. “We are actively feeding new product requirements to the engineering team to continue to improve the suite of tools that Microsoft offers, but also to help inform on the solutions to address a lot of these regulatory requirements like CSRD.”
Still, it will take more than just Microsoft’s efforts to clean up emissions and steam forth on the sustainability train.
“We really need a partnership among customers, governments and civil society…we've been focused on ‘how do you decarbonize our grids, clean up our supply chains and catalyze supply for low carbon materials and fuels as well as carbon removal’…,” concluded Nakagawa. “I see this cross collaboration from all these different stakeholders just so vital on this global journey that we're all on for sustainability. It really isn't about one company, one sector, but it's really about all of us doing this together.”