2021
Environmental
Sustainability
Report
From pledges to progress
Contents
Overview
Foreword 4
2021 progress 6
How we work 7
Feature story:
Employee engagement
9
Commitments and progress 11
About this report 13
Carbon negative
Our approach 16
Getting to carbon negative 20
Reducing Scope 1
and 2 emissions
21
Feature story:
100/100/0 carbon-free energy
23
Reducing Scope 3 emissions 25
Removing carbon 30
Driving transformation 31
Enabling systems change 34
Key trends 41
What’s next? 42
Resources 43
Water positive
Our approach 45
Getting to water positive 48
Reducing our water footprint 48
Replenishing water 50
Improving access to water 52
Driving transformation 53
Enabling systems change 55
Key trends 58
What’s next? 59
Resources 60
Zero waste
Our approach 62
Getting to zero waste 65
Driving transformation 69
Enabling systems change 71
Key trends 74
What’s next? 75
Resources 77
Ecosystems
Our approach 79
Taking responsibility for our
land footprint
81
Driving transformation 82
Enabling systems change 84
Key trends 87
What’s next? 88
Resources 89
Appendix
Appendix A:
How we report 91
Appendix B:
Commitments 92
Partnerships 93
Memberships 93
Recognitions 94
EPEAT 95
Appendix C:
Endnotes 96
Appendix D:
Section 1: Our
environmental data
97
Independent accountant’s
review report
112
Section 2: Additional
environmental indicators
113
Appendix E:
Policy 117
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This report is part of the Microsoft
CSR and sustainability reporting suite.
Visit the Microsoft
reports hub
2.5Mmetric tons of carbon
removal contracted in FY21
and FY22
1.3Mcubic meters of water replenishment
projects funded in FY21
15.2Kmetric tons of waste diverted
from landfills
24petabytes of environmental
data now available
2Overview Carbon Water Waste Ecosystems Appendix
Overview Contents
Foreword 4
2021 progress 6
How we work 7
Feature story:
Employee engagement
9
Commitments and progress 11
About this report 13
3Overview Carbon Water Waste Ecosystems Appendix
Foreword
Microsoft’s sustainability
commitments: two years into
our ten-year journey
By Brad Smith, President and Vice Chair and
Dr. Lucas Joppa, Chief Environmental Officer
As we look towards 2030, the world will need all the
ingenuity it can muster. Because as significant as
COVID-19 is, it’s not the only challenge our world faces.
Climate change presents environmental, social, and
economic crises on a whole new level. For nearly two
millennia humans have been carbonizing our planet and
we need to act together to decarbonize.
Our first annual sustainability report, released in January
2021, showed early progress on our commitments to
become a carbon negative, water positive, zero waste
company by 2030 and protect ecosystems by building
a Planetary Computer.
2021 was a year of both successes and challenges.
While we continued to make progress on several of our
goals, with an overall reduction in Scope 1 and Scope
2 emissions, our Scope 3 emissions increased year
over year, due in substantial part to significant global
datacenter expansions and the growth in Xbox sales and
usage as a result of the pandemic.
A closer look at 2021
During our most recent fiscal year, we grew business
revenue by 20 percent while continuing to reduce our
operational emissions, as represented by Scope 1 and 2
combined, with a decrease of approximately 17 percent
through our purchasing of renewable energy.
However, as our business has grown and we’ve seen
increased use of our devices and cloud services, our
total Scope 3 emissions (comprising the company’s
entire value chain) have increased by about 23 percent
year-over-year. These emissions include, among other
things, the carbon emitted from electricity generation to
power devices at home or at work and for producing the
concrete and steel we use in construction.
We work to limit these emissions when we design and
manufacture our products, and work with our suppliers
to report and reduce their emissions—but still saw an
increase. This serves as an important reminder that Scope
3 emissions are the most difficult to control and reduce.
This year has highlighted the challenges of reducing
Scope 3 emissions and we’re committed to sharing our
learnings to help other organizations who are wrestling
with these same challenges.
One Scope 3 category that saw an annual increase
was capital equipment. This category includes the
emissions to produce equipment we bought this year
(and will use for a long time) as well as the carbon
emissions associated with the construction of new
buildings including both datacenters and office space.
For example, as the Microsoft Cloud business expands,
construction of new datacenters and new server
equipment is needed to support growing customer
demand. The emissions associated with the capital
equipment category accounted for about 30 percent
of our Scope 3 total this year.
Another Scope 3 category that saw an increase was the
use of our products, specifically the estimated emissions
associated with powering products we sold including
Xbox and Surface devices. This category accounted for
about 29 percent of our Scope 3 total this year.
Around the world, the electricity used to power devices
today largely comes from grids reliant on carbonintensive
sources such as coal or gas, so Microsoft must
account for that carbon for the lifetime of our devices
to accurately track our Scope 3 emissions. And, because
every part of the world has a different mix of electricity
generation sources, we calculate a device’s climate
impact based on where the device was sold.
The journey to net zero
Despite these Scope 3 increases, we remain dedicated to
building a world better than the one we found, and to
helping our customers and partners achieve the same.
The impact of this work will not all be felt immediately,
and our experience this year highlights a few takeaways
relevant to many organizations executing against their
sustainability commitments.
1. Progress won’t always be linear. The rate at which
we can implement emissions reductions is dependent
on many factors that can fluctuate over time, ranging
from our own business growth and supplier mix
to the rate of growth of green infrastructure, such
as the supply of and transition speed to renewable
energy. Additionally, different sources of emissions
will be addressed on different time frames as climate
technologies and renewable alternatives advance.
And as measurement methodologies improve and
new standards emerge, companies like ours may see
emissions rise or fall year-over-year.
Nonetheless, the challenge remains: we must
continuously improve on our efforts to decouple our
emissions from our growth until we reach our carbon
negative commitment in 2030. Some of this will happen
through the completion of specific goals such as our
shift to a 100 percent electric campus vehicle fleet, our
move away from diesel fuel as a backup energy source
for our datacenters, and the carbon benefits of our
waste reduction improvements due to our expanding
fleet of Circular Centers. Other progress will happen
through the expansion of our renewable energy
purchasing program to cover the energy consumption
of our consumer devices, through advances by our
suppliers in reducing their own emissions, and through
increased purchasing of new materials as they enter the
markets, including green steel, low carbon concrete,
and other infrastructure components of a future net
zero carbon economy.
4Overview Carbon Water Waste Ecosystems Appendix
Foreword (continued)
2. Progress relies on us all counting carbon
consistently. There are several external factors or
bugs in the world’s net zero carbon program that
if addressed will help us all make greater progress
toward our net zero goals. The world lacks a common
meaning of the term net zero and a common unit
of measurement for assessing the climate impact of
various net zero approaches, and we must all focus on
maturing the markets needed to achieve a net zero
carbon economy by 2050. We explored these topics
in greater detail through the lens of our work on
carbon removal.
We will continue to innovate and invest to meet our
ambitious commitments and we’ll do so in a principled
way. We will also continue to be transparent about our
progress, our challenges, and our learnings to help
others on their journey. As we look to the future we are
committed to:
• Counting everything, including challenging Scope 3
emissions. We are putting programs in place to help
lower them, from working with our suppliers to help
them decarbonize to continuing to innovate with
our company-wide internal carbon tax to incentivize
emissions reduction and continuing to invest in
carbon removal.
• Only investing in carbon removal offsets instead of
traditional avoided emissions offsets because removal
is an underdeveloped and critical tool to solve the
world’s climate challenge. You can only get to net
zero when you’ve reduced all that you can and your
remaining carbon emissions are completely balanced
by long-term carbon removal. Last year, we made
the world’s largest purchase of carbon removal at
1.4 million metric tons and in this fiscal year we are on
track to top that by procuring 1.5 million metric tons.
From pledges to progress
While 2021 presented us with some new learnings, we’ve
also made some great progress that we share in more
detail in this report. A few examples that illuminate the
diversity of our work include the following.
• Four datacenters are Zero Waste certified, with new
certifications for the San Antonio, Texas and Quincy,
Washington datacenters and renewed certifications for
our Boydton, Virginia and Dublin, Ireland locations.
• We announced the Microsoft Cloud for Sustainability
to provide comprehensive, integrated, and automated
sustainability management for organizations at any
stage of the sustainability journey.
• Through an investment from our Climate Innovation
Fund, we’re helping LanzaJet complete their
sustainable fuels plant in Georgia—a move that
will help decarbonize our datacenters as well as the
airline industry.
• While overall device emissions grew because of higher
sales and usage, we reduced the carbon footprint
for several of our products. Surface Pro 8 is one of
the most energy efficient Surface Pros ever and we
introduced Energy Saver, a new low-power standby
mode for Xbox consoles.
• We granted $100 million to Breakthrough Energy
Catalyst to accelerate the development of climate
solutions the world needs to reach net-zero across four
key areas: direct air capture, green hydrogen, long
duration energy storage, and sustainable aviation fuel.
We are committed to becoming a carbon negative, water positive, zero waste company by 2030.
With net zero becoming the new normal—more than
1,500 companies with total net revenue of $11.4 trillion
have pledged that they will become carbon neutral or
net zero—the world must move from climate pledges to
climate progress.
As a leading technology provider of sustainable
solutions, Microsoft stands ready to support our
customers, partners, and the world in the move towards
a net zero, environmentally sustainable future. And while
the shape of what the future holds is unknown, we
will continue to build the foundations needed today
and do the work that needs to be done to deliver on
our commitments.
It’s what the world needs us all to do.
Brad Smith
President and Vice Chair
Dr. Lucas Joppa
Chief Environmental Officer
5Overview Carbon Water Waste Ecosystems Appendix
2021 progress
$571MAllocated $471 million to date via our
Climate Innovation Fund to accelerate
our carbon goals, as well as water and
waste. We also donated $100 million to
Breakthrough Energy’s Catalyst initiative.
6
Carbon Water Waste Ecosystems
2.5Mtons
In FY21 and FY22, Microsoft successfully
contracted to remove 2.5 million mtCO2,
meeting our cumulative two-year goal.
1.3Mm³
In FY21, Microsoft invested in
replenishment projects that are expected
to generate over 1.3 million cubic meters
of volumetric benefits.
CircularCenters
We have planned five Circular Centers, with
Amsterdam open, construction underway
in Boydton, Virginia, and three more to be
added in 2022.
>17,000acres
In FY21, we contracted to
protect more than 17,000
acres of land.
5.8GW
In FY21, we signed new power purchase
agreements (PPAs) for approximately
5.8 gigawatts (GW) of renewable energy
across 10 countries around the globe.
670MOur programs with Water.org
account for over 670 million
liters
9
of water benefit
per year.
>15,200tons
In FY21, we diverted more than 15,200 metric
tons of solid waste otherwise headed to
landfills and incinerators.
>500users
The Planetary Computer private preview
released as planned in April 2021, with more
than 500 users signed up and using the APIs
and scalable compute.
87%supplier reporting
In July 2021, 87 percent of our in-scope
suppliers reported their emissions to CDP,
up 12 percent from 2020.
>95Kpeople
Through our partnership with Water.org,
we provided more than 95,000
10
people
with access to safe water or sanitation.
ZeroWaste
Four datacenters are Zero Waste certified,
with new certifications for the San Antonio,
Texas and Quincy.
24petabytes
We have made available 24 petabytes of
data with more than 30 key environmental
and Earth observation datasets to Azure
in consistent, analysis-ready format that is
freely available for use by anyone.
Microsoft Cloud for
Sustainability
In July 2021, we launched the Microsoft
Cloud for Sustainability to provide
comprehensive, integrated, and automated
sustainability management.
U.S. Water Prize
In 2021, Microsoft was awarded the U.S.
Water Prize for Outstanding Private Sector
Organization for adopting our water positive
program and committing to being water
positive by 2030.
18%reduction
We reduced single-use plastics in our
Microsoft product packaging by 18 percent.
850+grants
Since its inception in 2017, our AI for Earth
program has provided more than 850 grants
to organizations working in 110 countries
around the world, granting more than
$20 million in Azure credits.
Overview Carbon Water Waste Ecosystems Appendix
How we work
Make it central
to the business
while making it
relevant at business
group levels
Set the
tone from
the top
Hold everyone
accountable for
progress and a
governance structure
to track progress
in real time
Take steps
to accelerate
markets,
ecosystems,
and global
progress
Scale strategy
to achieve
ambitions
by using the
“whole of
the business”
Set ambitions
based on
the science
Report on
everything,
not just
progress
Microsoft’s commitments to become
carbon negative, water positive, and
zero waste by 2030 while building a
Planetary Computer are well known.
To guide the progress across the company on those
goals, we have changed the way our sustainability
strategy and accountabilities are set and how progress
is evaluated. In the interest of transparency and also to
help other organizations get started, we are sharing how
we work first, prior to our commitments and progress on
them—sustainable digital transformations require both
strategic frameworks and cultural buy-in to be successful.
Set ambitions based on the science
The best available science and policy indicate that every
organization needs to do even more in far less time than
previously thought. As we saw the science in 2019, it was
clear that our carbon neutral goal was not what the world
needed—the world needs to reach net zero by or before
2050. That meant we needed to set goals aligned to the
science and language of the science, and we needed to be
more ambitious. In 2020, we made a series of environmental
sustainability commitments, including being carbon
negative, water positive, and zero waste by 2030.
Scale strategy to achieve ambitions by
using the “whole of the business”
At Microsoft, we think about the positions of influence
that we can use. We start by taking accountability for our
operations as a company, but we expand this significantly
as we think about the different roles that we play as a
customer, supplier, investor, employer, policy advocate,
and partner in innovation to customers, organizations,
and institutions around the world. The challenge is to
find where our organization can have the most impact
across our positions of influence.
Microsoft looked at our commitments based on our
operational footprint across carbon, water, waste, and
ecosystems, the technology that we provide to our
customers and partners to power their sustainability
initiatives, and larger influence that we can have on the
world with research, investments, strategic partnerships,
and policy and advocacy.
Set the tone from the top
Sustainability is no longer just a corporate social
responsibility (CSR) function or a way to mitigate
risk—it must be mainstreamed into every part of the
business. That starts with making sustainability part of
the brand commitment and embraced by all leaders.
At the heart of our culture is the understanding that for
Microsoft to do well, we need the world to do well and
that we are a company that pursues profit by solving
the problems of people and the planet. This belief is
deeply held by the leadership of Microsoft—the CEO,
CFO, and President—the entire company sees the
commitment and it sets the tone across the company
that sustainability is at the core of our business.
Make it central to the business
while making it relevant at business
group levels
Corporate commitments give your company a north
star, but you need to embed the strategy and build
operational commitments across your business.
At Microsoft, we knew we needed a way to implement
and execute on our strategy across the entire company,
in every business group. For each focus area (carbon,
water, waste, and ecosystems), we set commitments in
each business group and developed roadmaps to reach
these commitments. We are also committed to enabling
our suppliers with capacity-building tools and resources,
as well as sustainable supply chain financing.
How
we work
7Overview Carbon Water Waste Ecosystems Appendix
How we work (continued)
Hold everyone accountable for
progress and a governance structure
to track progress in real time
Governance and accountability are critical to ensuring
alignment and prioritization across your business.
At Microsoft, we hold our business groups accountable
for their carbon emissions via an internal carbon fee of
$15 per metric ton. In January 2021, we expanded the
carbon fee so that it includes Scope 3 emissions from
our supply and value chain, in addition to Scope 1 and
Scope 2. We set measurements and scorecards for each
business group’s sustainability commitments across the
company and review progress twice a year. We have
established a Climate Council that includes senior
business leaders from every business group to provide
sustainability advice, collaborate, drive alignment,
prioritize resources and funding, and review progress on
our commitments. We also tie a portion of our executive
incentive plan to our carbon reduction goals.
Take steps to accelerate markets,
ecosystems, and global progress
If the world is going to meet net zero goals by 2050,
companies need to use their entire ecosystem and all
of their positions of influence. In addition to taking
accountability for our operational footprint across
carbon, water, waste, and ecosystems, Microsoft is
deploying capital, supporting innovation, and advocating
for larger policy change. We led the largest corporate
carbon removal RFP last year, spending our dollars to
drive the carbon removal market forward and to address
our own needs.
Our $1 billion Climate Innovation Fund is investing in
organizations across our areas of commitment to build
a larger, more robust ecosystem of effective companies
and solutions. Our sponsorship at COP26 and numerous
engagements with governments at the city, regional,
state, and national levels are aimed at creating policy
environments that further accelerate the impact of this
work and the transition to net zero.
Report on everything,
not just progress
Transparency is both embedded in each step and a
specific commitment. In this report, as well as other
white papers, methodology papers, and speaking
engagements, Microsoft is committed to sharing our
learnings with the world. When things go well, we will
share that as well as the playbooks to follow to achieve
similar results outside our organization. And if things
go less well, we will share that too so we can all learn
and grow together. We are also delivering innovative
technology and services to help our customers and
partners power environmental sustainability. And we go
beyond that with our biggest bets in policy, investment,
catalytic partnerships, and research and development.
Sustainable digital transformations require both strategic frameworks and cultural buy-in to be successful.
8Overview Carbon Water Waste Ecosystems Appendix
Employee engagement
Feature story
Empowering
our global
workforce
We recognize that our employees
are the most important asset and
resource in advancing innovation
in sustainability and are creating
opportunities for them to contribute
to our efforts.
Empowering our global workforce is the center of our sustainability strategy.
At Microsoft, empowering our global workforce is the
center of our sustainability strategy. Both Microsoft
and LinkedIn have employee communities who drive
bottom-up sustainability initiatives to educate, inspire,
and activate every employee to advance the company’s
sustainability goals. The Microsoft Sustainability
Connected Community is an employee-led group
of 5,000 members and 32 regional chapters whose
mission is to make sustainability part of everybody’s
job. The LinkedIn Go Green sustainability engagement
program includes one out of every eight employees and
its 26 chapters are focused on empowering employees
to take green action at home, in the office, and in their
communities. Both groups engage employees on our
sustainability commitments while using Microsoft and
LinkedIn technology to innovate real-world solutions to
the climate crisis through the following activities.
Ecochallenges
Microsoft and LinkedIn employees participated in virtual
Ecochallenges for three weeks around Earth Day 2021 to
gamify personal sustainability. Seven thousand people
prepared 31,000 meatless or vegan meals, saved 197,000
pounds of CO2, diverted 227,000 plastic containers and
bottles from landfill, saved 392,000 gallons of water, and
spent 239,000 minutes learning about sustainability.
Run an ecochallenge to give your employees the
opportunity to learn and practice habits that support
them on their personal sustainability journey.
Find out more at
Ecochallenge.org
Hack for sustainability
Microsoft employees self-organize into working groups
all year long and “hack for sustainability” by partnering
with each other to create innovative solutions to realworld
environmental challenges. In 2020, Microsoft had
125 projects with 879 participants, and 93 percent of
participants indicated their interest in continuing the
work beyond the Hackathon. One award-winning project
from the Microsoft Global Hackathon, Soil as a Service,
created a way to lower the cost of measuring organic
carbon in soil using a sensor hooked up to Microsoft
Azure IoT. This innovative solution lowers the cost of
measurement significantly, incentivizing farmers to
change their land management practices and helping
nascent carbon marketplaces to quantify their impact.
The project has been picked up by a business group for
further research and exploration.
Ongoing sustainability ideating and hacking
The Microsoft Garage provides a platform for
hackathons and ideathons all year long, including
our month-long Sustainability Ideathon for Earth
Day 2021 and the year-round Sustainability program
using our HackBox platform for employees to collect
ideas, share concepts, create projects, form teams, and
inspire colleagues globally to participate in Microsoft’s
sustainability journey.
Employee-led sustainability projects
Employees from every facet of Microsoft and LinkedIn
are empowered to lead collaborative cross-company
sustainability projects at any time. This year, our platform
has facilitated 200 projects from more than 1,000
employee “hackers,” with projects ranging from digital
foresting, to smart bird feeders, to building software that
will help retrofit the world’s coal power plant fleet with
modular nuclear reactors.
9Overview Carbon Water Waste Ecosystems Appendix
Employee engagement (continued)
10
Sustainable disposition of IT assets
The Sustainability Community not only helps Microsoft
lower its own operational carbon and waste footprint,
but also creates a way to share these best practices
with external organizations so they can do the same.
A Microsoft employee noticed a gap in our internal
processes: as customers migrate from on-premises IT
assets to the cloud (Azure), the on-premises hardware,
like servers and racks, becomes e-waste, which can
create serious environmental hazards if it’s not properly
disposed of. The issue was raised to the Azure leadership
through the community, and a new resource was
developed to guide customers on how to ensure the
sustainable, secure, and compliant disposition of IT
assets. This guide is being used by our Azure Migrate
& Modernize Program (AMMP) customers, through
which 20,000 virtual machines and 2,000 databases
have been migrated.
Learn more about the
IT Asset Disposition Guide
Sustainability training
In October 2021, we launched the Sustainability in Action
badge. This is the first all-employee learning course
focused on sustainability, with four hours of content on
carbon, water, waste, and ecosystems. Within the first
two months, more than 3,000 employees completed
the course, and can serve as sustainability champions
in their daily work as well as personal lives.
Employee-led education
In April 2021, to celebrate the 51
st
anniversary of
Earth Day, the Microsoft Sustainability Community
organized three days of learning sessions to educate,
inspire, and activate employees on the importance
of sustainability. Volunteers coordinated more than
40 sessions and generated 30 hours of evergreen
learning content covering topics from green software
engineering to how to live a zero waste lifestyle at
home. More than 3,600 people from 56 countries
participated. LinkedIn celebrated Earth Day with over
61 global experiences and participation from nearly
2,900 employees at the virtual events.
Our employee communities drive bottom-up sustainability initiatives to educate, inspire, and activate employees.
3,0003,000 employees completed
Sustainability in Action training
within the first two months.
Overview Carbon Water Waste Ecosystems Appendix
Commitments and progress
Carbon negative
Microsoft is committed to be a
carbon negative company by 2030.
To achieve this, we are improving
efficiency in our operations, devices,
and supply chain; we are delivering
technology to help our customers
measure and manage their carbon
emissions more effectively; and we
are breaking new ground with carbon
removal purchases and investments
to help develop the crucial, nascent
carbon reduction market.
Find out
more here
Our commitments
Carbon negative
By 2030, we will be carbon negative, and by 2050,
we will remove our historical emissions since we
were founded in 1975.
Reduce direct emissions
We will reduce our Scope 1 and 2 emissions to near
zero by 2025 through energy efficiency work and
by reaching 100 percent renewable energy.
Replace with 100/100/0 carbon free energy
By 2030, 100 percent of our electricity consumption
will be matched by zero carbon energy purchases
100 percent of the time.
Reduce value chain emissions
By 2030, we will reduce our Scope 3 emissions by
more than half from a 2020 baseline.
Remove the rest of our emissions
By 2030, we will remove more carbon than we emit.
By 2050, we΄ll remove an equivalent amount of
carbon to all our historical emissions.
Our progress
2.5M tons
Contracted for 2.5M metric
tons of carbon removal in
FY21 and FY22
5.8 GW
Signed new PPAs for
5.8 GW of renewable
energy in FY21
New tools
Launched the Microsoft
Cloud for Sustainability
87%
87% of in-scope suppliers
reported emissions to CDP
Water positive
Microsoft is committed to be a water
positive company by 2030. To achieve
this, we will continue our water
stewardship work across our operations,
building on the steps taken to reduce
the water consumption in our
datacenters and campuses over the
past decade. In addition to reductions,
we aim to become water positive
through expanding access to clean
water and replenishment projects.
Find out
more here
Our commitments
Water positive
By 2030, we will replenish more water than we use.
We will reduce the water intensity of our direct
operations and replenish in water-stressed regions
where we work.
Reduce water waste in datacenter operations
By 2024, we will reduce water waste in our datacenter
operations by 95 percent.
Increase access to water
We will provide 1.5 million more people with access
to clean water and sanitization services.
Our progress
1.3M m3
Invested in replenishment
projects expected to
generate 1.3M cubic
meters of water benefits
>95K
Provided 95K people with
access to water via our
partnership with Water.org
U.S. Water
Prize
Awarded U.S. Water Prize
for Outstanding Private
Sector Organization
670M
Delivered 670M liters of
water benefits per year via
programs with Water.org
11
Water positive
Microsoft is committed to be a water
positive company by 2030. To achieve
this, we will continue our water
stewardship work across our operations,
building on the steps taken to reduce
the water consumption in our
datacenters and campuses over the
past decade. In addition to reductions,
we aim to become water positive
through expanding access to clean
water and replenishment projects.
Find out
more here
Overview Carbon Water Waste Ecosystems Appendix
Zero waste
Microsoft is committed to become
a zero waste company by 2030.
We are taking an increasingly circular
approach to materials management
to reduce waste and carbon emissions.
Our approach includes design and
material selection, responsibly
sourcing materials for our operations,
products, and packaging, and
increasing the use of recycled content.
We keep products and materials in
use longer through reuse, repair,
and recycling programs.
Find out
more here
Commitments and progress (continued)
Our commitments
Zero waste
By 2030, we will be zero waste across our direct business.
Increase reuse of servers and
components through Circular Centers
By 2025, 90 percent of servers and components within
our regional datacenter networks will be reused.
Eliminate single-use plastic
By 2025, we will eliminate single-use plastics in all
Microsoft primary product packaging and all IT asset
packaging in our datacenters.
Make fully recyclable products and packaging
By 2030, we will design Surface devices, Xbox products
and accessories, and all Microsoft product packaging
to be 100 percent recyclable in OECD countries.
Drive to zero waste operations
By 2030, we will achieve 90 percent diversion of
operational waste at datacenters and campuses
and 75 percent diversion for all construction and
deconstruction projects.
Our progress
Circular
Centers
Planned 5 Circular Centers
in FY22
>15K tons
Diverted more than
15,200 metric tons of
solid waste across direct
operations in FY21
18%
Reduced single-use plastics
in product packaging by
18% in FY21
ZeroWaste
Certified four datacenters
as Zero Waste with
new certifications
Ecosystems
Microsoft is committed to protect
more land than we use by 2025 while
also building a Planetary Computer.
We need a strong, efficient, scalable
way to monitor, understand, measure,
and ultimately manage the impact
of our actions or inactions on
ecosystems—both globally and
locally. Microsoft is well on our way
to providing access to the world’s
critical environmental datasets and
delivering a computing platform to
measure, monitor, model, and manage
healthy ecosystems.
Find out
more here
Our commitments
Build a Planetary Computer
We will aggregate environmental data from around
the world and put it to work through computing
and machine learning in a new Planetary Computer.
Take responsibility for our land footprint
We will take responsibility for the ecosystem impacts
of our direct operations by protecting more land than
we use by 2025.
Our progress
>17K acres
Invested to protect more
than 17,000 acres of land
in FY21
>500 users
Released the Planetary
Computer and have over
500 users signed up
24
petabytes
Made available 24
petabytes of data available
in the Planetary Computer
850+
grants
Our AI for Earth program
has provided more than
850 grants since 2017
12Overview Carbon Water Waste Ecosystems Appendix
About this report
Transparent and
accountable
reporting on
progress
Systems change
Transformation
Operations
Carbon
Waste
Water
Ecosystem
A key principle of our work is transparency.
This report, published annually, includes our
strategy, progress against our goals, and key
challenges and trends we see in this work. We
also publish our environmental data, which is
included in Appendix D. Deloitte & Touche LLP
performed a review relating to specified
information within Section 1 of Appendix D.
We continue our work to provide leading
transparency, visibility, and reliability in our
non-financial reporting.
Read about how we report in
Appendix A
Read about our environmental
data in Appendix D
How we think about sustainability
Layers of increasing impact
We think about Microsoft’s approach to
sustainability in layers of increasing impact
and have structured this report accordingly in
chapters across our commitments in carbon,
water, waste, and ecosystems. Each chapter
follows this approach, as outlined here and
on the following page.
Operations
We start with taking accountability for our
own operational footprint, which is relatively
small. For example, we account for less than
.03 percent of carbon emissions globally.
Transformation
We then look at how Microsoft technology
can help our customers and partners power
their environmental sustainability.
Systems change
We also look at Microsoft’s biggest bets in
policy, investments, catalytic partnerships,
and research and development.
Endnotes are used throughout the report;
all references are hyperlinked and a full text
explanation of all endnotes can be found in
Appendix C.
13Overview Carbon Water Waste Ecosystems Appendix
How to read this report
About this report (continued)
Our
approach
An explanation of why this program is
a focus, what our commitments are, and
what our progress and accomplishments
were for the past year.
Operations
A look at our approach to reduce, replace, or
remove our footprint across how our products
and facilities are sourced, manufactured,
operated, and managed at end of life.
Campuses and datacenters
In each building at every campus and datacenter, sustainability
is a key priority for Microsoft across all phases of a project—
from site selection to design and construction to operations
and decommissioning.
Reducing Scope 1 & 2 emissions
see page 21
Reducing Scope 3 emissions
see page 25
Reducing our water footprint
see page 48
Getting to zero waste
see page 65
Ecosystems—Taking responsibility
for our land footprint see page 81
Devices
Sustainability in our devices means looking at the impact
that we have on our planet as we design, manufacture, and
ship our devices, software, games, and operating systems,
as well as product usage and end of life.
Reducing Scope 3 emissions
see page 27
Getting to zero waste
see page 67
Supply chain
Our operational commitments extend into our supply
chain. We work with our suppliers to report their
emissions, design plans and new approaches to reduce
their emissions, and track progress over time.
Reducing Scope 3 emissions
see page 29
Transformation
A review of the latest innovations from
Microsoft to help our customers and partners
power environmental sustainability through
our learnings, technology, and services.
Systems
change
A look at how we’re driving global change
with our biggest bets in policy, investment,
catalytic partnerships, and research
and development.
Key trends,
what’s next,
and resources
A recap of key trends we’ve observed this
year, what’s coming next for Microsoft,
and resources for organizations on their
sustainability journeys.
14Overview Carbon Water Waste Ecosystems Appendix
Carbon
negative
“The key to addressing
climate change at a company
like Microsoft is to partner
with every industry to
understand how it functions,
discern the elements vital to
its success, share and adapt
solutions, and help our
customers chart an informed
path to decarbonization.”
Brad Smith, President and Vice Chair
Contents
Our approach 16
Getting to carbon negative 20
Reducing Scope 1
and 2 emissions
21
Feature story:
100/100/0 carbon-free energy
23
Reducing Scope 3 emissions 25
Removing carbon 30
Driving transformation 31
Enabling systems change 34
Key trends 41
What’s next? 42
Resources 43
-
15Overview Carbon Water Waste Ecosystems Appendix
Our approach
A commitment
to a carbon
negative future
The context
The consequences of climate change are increasingly
apparent, from wildfires to devastating flooding.
The scientific reality of climate change is more accepted
than ever before—to avert the worst effects of the
rapidly changing climate, the world needs to transition
to a net zero carbon emissions economy by 2050.
But we still lack key strategies to avoid catastrophic
climate change.
The world needs agreement on the meaning of global
net zero emissions, measurement to track our progress
toward net zero, and mature markets for carbon
reduction and removal that are necessary to get us there.
Through our operations, technology, and advocacy,
Microsoft is addressing these three areas to help drive
the change that society needs.
Our strategy to reach carbon negative by 2030 is
relatively simple—we will reduce our Scope 1 and 2
emissions to near zero by improving efficiency, adopting
new solutions, and purchasing zero carbon energy.
1
We are engaging suppliers and our business groups to
cut our Scope 3 emissions by more than 50 percent and
we’ll rely on carbon removal to reach carbon negative.
This year, we took strides forward on zero carbon energy,
continued progress on carbon removal, and improved
our methodologies and measurement of emissions data
across the company. We will continue to further refine
how we measure and approach these categories as we
move forward. We also took new steps to accelerate
the work of others via the launch of a new solution, the
Microsoft Cloud for Sustainability, to help our customers
measure their carbon emissions more effectively, and
created resources to help decarbonize our supply chain.
Our commitment: carbon negative by 2030
and by 2050 to remove from the atmosphere an equivalent amount of all the carbon dioxide our
company has emitted either directly or by our electricity consumption since we were founded in 1975.
Reducing direct emissions
We will reduce our Scope 1 and 2 emissions to
near zero by the middle of the decade through
energy efficiency work and reaching 100 percent
renewable energy by 2025.
Replacing with 100/100/0 carbon
free energy
By 2030, 100 percent of our electricity consumption
will be matched by zero carbon energy purchases
100 percent of the time.
Reducing value chain emissions
By 2030, we will reduce our Scope 3 emissions
by more than half from a 2020 baseline.
Removing the rest of our emissions
By 2030, Microsoft will remove more carbon
than it emits. By 2050, we΄ll remove an equivalent
amount of carbon to all our historical emissions.
Empowering customers and partners
We will help our suppliers, customers, and partners
around the world to reduce their carbon footprints
through our learnings and with the power of data,
AI, and digital technology.
Using our voice on carbon-related
public policy issues
We will support new public policy initiatives to
accelerate carbon reduction and removal opportunities.
Investing in the future
We have created a $1 billion Climate Innovation Fund to
accelerate the global development of carbon reduction
and removal technologies, as well as related climate
solutions to reduce water and waste.
16Overview Carbon Water Waste Ecosystems Appendix
Our progress
Reduced Scope 1
and 2 by 16.9%
We reduced our Scope 1 and 2 (marketbased)
emissions by 58,654 metric tons of
carbon dioxide equivalents (mtCO2) in FY21.
Scope 3 emissions increased by 22.7 percent.
5.8 GW of
renewable
energy
In FY21, we signed new power purchase
agreements (PPAs) for approximately
5.8 gigawatts (GW) of renewable energy
across 10 countries around the globe, totaling
more than 8 GW of renewable energy via
PPAs or long-term contracts.
Supplier
reporting tools
We released a set of in-depth capacitybuilding
tools and resources, developed
in partnership with ENGIE Impact, WSP,
and CDP to help companies, especially
our suppliers, report their greenhouse
gas (GHG) emissions and set strategies
to reduce emissions from electricity.
87% supplier
reporting
In July 2021, 87 percent of our in-scope
suppliers reported their emissions to CDP,
up 12 percent from 2020. This data informs
suppliers’ baselines for reduction targets and
gives Microsoft a more accurate picture of its
Scope 3 emissions. Following the CDP cycle,
Microsoft built out action plans with suppliers
to assess and report emission reductions
through 2030.
2.5M tons
carbon removal
In FY21 and FY22, Microsoft successfully
contracted to remove 2.5 million mtCO2,
meeting our cumulative two-year goal.
This includes 1.4 million mtCO2
2
contracted
in FY21 and 1.1 million mtCO2 contracted
to date in FY22, on path to meet our goal
of 1.5 million mtCO2 in FY22.
$571M
Allocated $471 million to date via our
Climate Innovation Fund to accelerate
our carbon goals, as well as water and
waste. We also donated $100 million to
Breakthrough Energy’s Catalyst initiative.
Launched the
Microsoft Cloud
for Sustainability
In July 2021, we launched the Microsoft
Cloud for Sustainability to provide
comprehensive, integrated, and automated
sustainability management for organizations
at any stage of the sustainability journey.
Our approach (continued)
Improved device
efficiency
While overall device and console use phase
emissions grew as a result of higher sales and
usage during the pandemic, we reduced the
carbon footprint for several products and
usage scenarios:
• Surface Pro 8 is one of the most energy
efficient Surface Pro devices ever.
• The new Surface Laptop Studio has a
30 percent smaller carbon footprint than
its predecessor, the Surface Book 3 13”.
3
• Energy-saving mode, a new
low-power standby mode for Xbox
consoles, uses as little as 0.5W.
A year of progress and impact to get to carbon negative by 2030.
17Overview Carbon Water Waste Ecosystems Appendix
Microsoft emissions Avoided emissions Carbon removalA B C Scope 1 Scope 2 Scope 3
Performance
Carbon negative
by 2030
A company is carbon
negative when it
removes more carbon
than it emits each year.
12M
10M
8M
6M
4M
2M
-2M
-4M
-6M
-8M
FY17 FY18 FY19 FY30FY21FY20
Current
year
Base
year
Target
year
0
14M
16M
A
A A A
A
A
B B BB
MetrictonsCO2
e
C
C
Base
year
2M 4M 6M 8M 10M 12M 14M
Metric tons CO2
e
16M0
FY18
FY17
FY20
FY21
FY19
Current
year
10,662,000
139,066
107,452
11,745,000
183,329
99,008
11,466,000
275,420
117,956
11,239,000
13,785,000
163,935
123,704
228,194
118,100
Carbon Table 1
Tracking our yearly progress toward carbon negative by 2030
In FY21 we procured the removal of 1.4 million metric tons of carbon as one of our initial steps towards achieving
our 2030 commitment.
a. Chart has been updated to reflect latest actual values which incorporate latest methodology and structural change
adjustments. A portion of the 1.4 million metric tons of removal will apply to future years.
b. Overall increase in emissions is driven mainly by the growth of our cloud services business and an increase in sales
and usage of our devices.
Carbon Table 2
Tracking our yearly emissions across Scopes 1, 2, and 3
Our approach (continued)
In FY21, we reduced our Scope 1 and 2 (market-based) emissions by 16.9 percent. We saw an increase in Scope 3
emissions driven by growth of our cloud services business and an increase in sales and usage of our devices.
a. Scope 2 and 3 values are market-based.
17
18Overview Carbon Water Waste Ecosystems Appendix
Our approach (continued)
19
Carbon Table 3
Breaking down of our FY21 Scope 3 emissions by source
Scope 3 represents the majority of Microsoft’s emissions, and we are committed to reducing these emissions by more than 50 percent by 2030. Tracking and reporting against this
category of emissions is critical for net zero progress.
0.88%
Scope 1
1.16%
Scope 2
97.96%Scope 3
9
6
1
2
10
11
3
8
5
7
4
Scope 3 Categories
1 Purchased Goods & Services 35.03%
2 Capital Goods 29.70%
3 Fuel- and Energy-Related
Activities (Market-Based) 2.20%
4 Upstream Transportation 1.60%
5 Waste 0.04%
6 Business Travel 0.16%
7 Employee Commuting 0.57%
8 Downstream Transportation 0.32%
9 Use of Sold Products 28.07%
10 End of Life of Sold Products 0.14%
11 Downstream Leased Assets 0.13%
See appendix for more data
on our carbon emissions
a. Scope 2 and 3 values are market-based.
b. Overall increase in emissions is driven mainly by the growth in the categories
of purchased goods and services, capital goods, and use of sold products.
5.8GWIn FY21, we signed new
PPAs for approximately
5.8 GW of renewable
energy across 10 countries
around the globe, totaling
more than 8 GW of
renewable energy via PPAs
or long-term contracts.
Overview Carbon Water Waste Ecosystems Appendix
Getting
to carbon
negative
It is critical that companies take a
rigorous approach to achieving net
zero. This begins with recording and
reporting emissions with better data
collection and automation, reducing
emissions as much as possible,
replacing electricity consumption
with renewables, and removing
the remaining emissions.
In January 2020, Microsoft announced its intention to
be carbon negative, which will see us cut our greenhouse
gas (GHG) emissions across our operations to nearly
zero and by over half by 2030 across our value chain
with improvements in energy efficiency, replacing
with renewable energy for Scope 2, and removing
the remainder of emissions. We will also remove the
equivalent amount of our historical carbon emissions
by 2050.
Implementing these commitments is a journey.
At Microsoft, we have come to see this as a “5-R Journey”
that begins with recording and reporting emissions with
better data collection and automation, then reducing as
much as possible with that data-informed roadmap first,
then replacing fossil fuels in our electricity consumption
with renewables, and finally removing what remains.
Our total company emissions (market-based) in 2021
were approximately 14 million mtCO2. Of this total,
about 120,000 mtCO2 were Scope 1 emissions at
Microsoft datacenters and campuses. Taking into
account our renewable energy purchases, our Scope 2
emissions were approximately 160,000 mtCO2. The bulk
of our emissions—more than 97 percent—are in Scope 3,
which includes emissions from our supply chain, the
lifecycle of our hardware products and devices, travel,
and other indirect sources.
While our combined Scope 1 and 2 emissions
decreased this year, we did see an increase in Scope 3
emissions, driven mainly by the growth of our cloud
services business and an increase in sales and usage
of our devices.
>50%We are committed to cutting our GHG emissions by
over half by 2030 across our value chain, removing
the residual emissions, and removing the equivalent
amount of our historical carbon emissions by 2050.
It is critical that companies take a rigorous approach to achieving net zero. We have come to see this as a “5-R Journey”.
20Overview Carbon Water Waste Ecosystems Appendix
Getting to carbon negative (continued)
Reducing Scope 1 and 2 emissions
across our operations
In each building at every campus and datacenter,
sustainability is a key priority for Microsoft across all
phases of a project—from site selection to design
and construction to operations and decommissioning.
By the middle of the decade, we are committed to
reducing our Scope 1 and 2 emissions to near zero.
Reducing carbon emissions
with efficiency solutions
Ensuring our campuses and datacenters are energy
efficient is a key first step in reducing our emissions.
We are changing the way we build and operate facilities,
using all-electric efficient system designs like the use
of geothermal energy and thermal energy recovery,
and improving the efficiency of our cloud.
Scopes explained
Scope 1
Direct emissions created
by your activities
Examples include the exhaust that comes
from the vehicles on your campus, natural gas
that your buildings directly consume, and the
generators you might run.
Scope 2
Indirect emissions from
the consumption of the
electricity or heat you use
Examples include energy sources that power
your office buildings or your home.
Scope 3
Indirect emissions from all
other activities in which
you΄re engaged
This is by far the largest category of emissions
and covers all parts of your value chain (upstream
and downstream). Upstream examples include
supply chain, materials in buildings, business
travel, and manufacturing. Downstream examples
include the electricity customers consume using
your products.
Scope 3 measurement poses a significant
opportunity for improvement.
Building for Zero Carbon and LEED certifications
We are pursuing Zero Carbon certification for
our Silicon Valley campus and Redmond campus
modernization project with International Living
Futures Institute. We have committed to certifying our
Microsoft datacenters and major offices to LEED Gold
or Platinum—with a focus on the categories of energy
and atmosphere, water efficiency, materials and waste,
location and transportation, sustainable sites, and indoor
environmental conditions. Four of our datacenters
are LEED Gold certified and 74 projects are going
through certification.
Deploying AI to improve energy efficiency
Microsoft is using Bonsai, a low-code AI platform that is
part of the Autonomous Systems suite from Microsoft,
to improve the efficiency of its Redmond campus chiller
plants. These chiller plants provide the air conditioning
within an HVAC system and typically represent a
substantial portion of the energy footprint of buildings.
We have seen a 12 percent increase in median efficiency
based on energy estimates and plan to implement Bonsai
in the 12 remaining chiller plants this fiscal year. In the
past, energy conservation measures (ECM) projects took
more than 12 months. Bonsai enabled us to build a model
and test recommendations in two to four weeks with
comparable results.
Designing and operating highly efficient datacenters
All future datacenters will be LEED Gold certified with
emphasis on water and energy conservation. All lighting
is high-efficiency LED with motion detection to minimize
use of space light. Cooling systems are integrated with
the servers, providing cooling only when the servers
require it.
21
Avoiding emissions with kinetic energy for
backup power
At the Bengaluru Cosmo office site, we installed an
uninterruptible power supply (UPS) with flywheel to store
kinetic energy to provide backup power without the
need for lead acid batteries typically used in conventional
UPS. The UPS flywheel has the additional benefit of
avoiding thousands of metric tons of carbon emissions
over its 20-year lifecycle and avoiding 1,500 lead acid
batteries treated as hazardous waste at end-of-life.
Increasing carbon awareness and lowering carbon
in cloud operations
We are piloting new approaches that lower the carbon
footprint of our code as well as large-scale workloads for
Microsoft and our customers’ benefit. We piloted a new
feature called Start/Stop VMs, which can automatically
turn off VMs during idle hours. Our engineers have
also created more transparency inside Azure Machine
Learning, displaying resource metrics (including GPU
energy, utilization, and computational cost) to help data
practitioners assess and mitigate the hidden costs of
their machine learning workloads, and partnered with
the Allen Institute for AI to develop a set of best practices
and tools in this space. We developed the Carbon Aware
Core, which helps schedule workloads in times and
regions with the lowest carbon footprint, which is being
piloted by Microsoft 365 and Microsoft Research and will
be provided as an open-source toolkit through the Green
Software Foundation. Engineers are also testing and
deploying novel approaches like Kubernetes Scheduler
to take advantage of grid-level fluctuations in carbon
intensity to minimize carbon.
Overview Carbon Water Waste Ecosystems Appendix
Transitioning to 100 percent renewable energy
By 2025, we expect to power our datacenters and
facilities with 100 percent additional, new renewable
energy generation that matches our electricity
consumption on an annual basis.
Already, we’ve contracted for more than 8 GW of
renewable energy. In addition to these purchases,
we’re using our campuses as living laboratories for
energy innovation.
See our full approach to renewable energy on the
next page.
On-site zero carbon energy solutions
We have installed on-site renewables at select campuses
as well. At our Silicon Valley campus, a solar panel
system will offset energy consumption up to 15 percent.
Our Beijing and Shanghai Zizhu campuses have made
similar efforts, installing photovoltaic (PV) solar panels
on empty roof space in FY20 which are expected to
generate 15,450 MWh of electricity over the next
25 years to power the campus. LinkedIn’s new campus in
Omaha features an on-site solar array over the parking
structure. The system has an estimated annual output
of approximately 750,000 kWh/year of electricity,
equivalent to about 15 percent of all site energy usage,
and is being integrated with on-site battery storage to
help reduce peak demand and address any intermittent
excess solar generation produced by the array.
Harnessing thermal energy to halve energy
consumption on campus
In 2021, we unveiled our plans for a new, hyper-efficient
thermal energy center for our Puget Sound campus,
which utilizes geothermal wells to heat and cool our
buildings—resulting in a 50 percent reduction in energy
usage compared to the typical utility plant. In our Silicon
Valley campus, thermal energy storage tanks will support
the closed loop water system that provides all heating
and cooling needs for the campus.
Removing fossil fuels from our campuses
and datacenters
We are leaving no stones unturned in our quest to reach
net zero. We are eliminating our dependency on diesel
fuel at our datacenters, electrifying our campus fleet,
and moving to all electric kitchens.
Eliminating diesel fuel in datacenters
Cloud providers around the world rely on diesel-powered
generators for backup power to support continuous
datacenter operations. Microsoft has committed to be
diesel-free by 2030. Innovations include the following.
Renewable fuels: Our datacenter region in Sweden
will be one of Microsoft’s first sites to use lower-carbon
renewable fuel for backup power. The datacenter’s
generators run on Preem Evolution Diesel Plus, the
world’s first Nordic Eco-labelled fuel, which contains at
least 50 percent renewable raw material, and nearly an
equivalent reduction in net carbon dioxide emissions
compared with standard fossil diesel blends. This solution
is being expanded to other datacenters across the world
with other suppliers.
Getting to carbon negative (continued)
Batteries as backup power: We are assessing the
long-term feasibility of deploying large batteries as
backup power for critical infrastructure via our strategic
collaboration with TOTAL and are continuing research
and development in this area. We are also implementing
an extended battery solution for datacenters that
operate on highly reliable grids. Our Swedish campuses
are slated to pilot a battery energy storage system (BESS)
solution to remove reliance on generators.
Hydrogen fuel cells: We are also piloting hydrogen
fuel cells as viable green energy for backup power at
our datacenters. We announced a worldwide first in
2020—hydrogen fuel cells powering a row of datacenter
servers for 48 consecutive hours. This successful pilot
provided a proof of concept for supporting backup
power needs that could be implemented once batteries
reach their capacity. Our primary power supply to an
operating datacenter is now a hydrogen fuel cell.
Electrifying our fleet
We are committed to fully electrifying our global campus
operations vehicle fleet of over 1,800 vehicles by 2030.
Since announcing this target, we have spent the last
year developing regionally specific implementation
strategies, analyzing the vehicles, and determining the
infrastructure needed to support operations. In the
coming year, we will launch a series of pilots appropriate
to each region to keep us on track to goal.
Powering all electric kitchens with renewable energy
In our Puget Sound campus modernization project,
we have removed natural gas from campus, including
cooking over 15,000 meals a day with only renewable
electricity. LinkedIn’s updated design and build
guidelines call for all-electric kitchens powered by
renewable energy, designed to cook over 5,000 meals
a day on clean power.
1,800We are committed
to electrifying
our global campus
vehicle fleet
of 1,800 vehicles
by 2030.
Electrifying our global campus operations vehicle fleet.
22AppendixEcosystemsWasteWaterCarbonOverview
Feature story
100/100/0:
a new
approach to
carbon-free
energy
Our commitment is that by 2030,
100 percent of Microsoft’s energy
supply, 100 percent of the time, will
come from carbon-free resources.
This commitment completes the link
between carbon-free resources and
our facilities in both space and time.
Hourly renewable supply and demand matching strategies can help lay the groundwork for a decarbonized grid.
23
Getting to carbon negative (continued)
A path to carbon negative via energy
The vast majority of Microsoft’s direct carbon emissions
footprint comes from electricity, and as such, our work
on carbon reduction has centered on using less of it,
while at the same time ensuring we support the
adoption of more carbon-free energy in the grids
where we operate. While our goal has remained
consistent—to get to an energy supply that is entirely
carbon-free—our approach has evolved as the supply
of renewable energy has increased, markets have
matured, and data has become more granular.
A journey towards 100 percent
Our initial commitment, set in 2012, was to cover
100 percent of our energy consumption with renewable
energy certificates (RECs). We achieved our goal that
same year by purchasing enough RECs to cover our
annual energy consumption. However, a REC purchase
is not always a direct contract with new renewable
generation and does not always mean that the
renewable generation is on the same grid as where
we are consuming electrons. Put simply, pursuing
“unbundled” RECs de-linked energy production and
consumption in both geography and time, reducing
the overall impact.
Recognizing the importance of linking our renewable
purchases to new impactful and additional renewable
energy projects, Microsoft began engaging in
renewable energy procurement through power purchase
agreements (PPAs). PPAs are a direct contractual
relationship between a purchaser and a supplier for
new renewable energy via a project or several projects;
that is, the execution of the PPA provides the necessary
revenue stream for new renewable energy projects to
be built. The direct contract establishes greater investor
confidence in renewable projects and paves the way for
more renewable generation on the grid.
We formalized our commitment to procuring energy
from new impactful renewable energy projects in 2016
and updated it in 2020. In 2016, Microsoft announced a
commitment to increasing proportion of PPA purchases,
on a path towards 100 percent renewable energy.
We pledged to procure enough renewable energy to
offset 50 percent of our energy consumption by 2018
and 60 percent in the next decade, and further specified
that we’d aim to secure new renewable energy in the
geography where our offices and datacenters are,
bringing a stronger geographic connection between our
contracted renewables and our electricity consumption.
In 2020, as part of our carbon negative announcements,
we committed to bring our commitment up to 100
percent by 2025. Like our earlier commitments, this was
on an annual basis, requiring us to sign renewable energy
offtake agreements to cover our energy needs; simply put,
we will match every electron we consume on an annual
basis with renewable energy.
Moving beyond 100 percent to 100/100/0
While we are proud of this progress, the global shift to
net zero carbon energy is not happening quickly enough.
The International Energy Agency (IEA) suggests that
the path to net zero emissions is very narrow and will
require the deployment of all available clean energy
technologies between now and 2030. For solar power,
it is equivalent to installing the world’s largest solar
park roughly every day.
4
This reality is due to the fact
that most electrons flowing onto grids today come
from carbon-intensive sources, requiring large-scale
replacement to meet our energy needs. Currently,
energy storage is not deployed at scale, and the grid
infrastructure of today is old and inadequate to meet
the balancing needs of new renewable energy resources
and the integration of net zero carbon resources, nor
to the increasing consumption demands of a rapidly
electrifying society.
Overview Carbon Water Waste Ecosystems Appendix
Getting to carbon negative (continued)
That is why we set a new 100/100/0 goal in 2021.
Our commitment is that by 2030, 100 percent of
Microsoft’s energy supply, 100 percent of the time,
will come from zero carbon resources on grids where
we operate. The 100/100/0 commitment completes
the link between zero carbon resources and our
facilities in both space and time.
Our 100/100/0 commitment provides a vision and
roadmap to pair our operational goals with our
research, technologies, and investments to drive
global change. We are bringing new research to
bear, including a white paper authored by RMI
that highlights the potential for hourly energy
monitoring tools to provide transparency into supply
and demand for zero carbon energy. The paper
illustrates that hourly renewable supply and demand
matching strategies can help lay the groundwork for
a decarbonized grid.
The impact of our 100/100/0 commitment will be
significant. Matching zero carbon resources in both
space and time will reduce Microsoft’s emissions to
zero at all times and also bring benefits to the broader
grid since the zero carbon resources we contract
for will also be available to serve the grid when our
consumption is lower or zero carbon energy output is
higher. Moreover, we will be driving early deployment
of advanced resources like hydrogen and longduration
storage to fill in the gaps when renewable
energy sources are not generating. And finally, the
energy transition will affect all and needs to benefit
all, which is why we have built climate equity into our
purchasing commitments.
Our impact to date
Our renewable and zero carbon commitments to date
are having real-world impact. Microsoft is one of the
largest purchasers of renewable energy in the world.
Across 2020 and the first part of 2021, Microsoft signed
new purchase agreements for approximately 6 GW of
renewable energy across 10 countries around the globe.
This includes over 35 individual deals, with 15 of those
deals in Europe spanning Denmark, Sweden, Spain, the
United Kingdom, and Ireland. This latest procurement
brings our operating and contracted renewable energy
projects to 7.8 GW globally and we are positioned to
continue to grow our renewable resource portfolio.
In addition to these PPAs, Microsoft partnered with Volt
Energy, the only national African American owned solar
development company, for a 250-MW portfolio of solar
projects with the intent to create new opportunities for
under-resourced communities and to help support a
more diverse renewable energy industry. This builds on
our progress on our community purchasing and skilling
work with Sol Systems, which began a year ago.
We’re also taking our learnings from our operational
work and building new products to help accelerate
global decarbonization. For example, our research led
to the co-creation and adoption of the first commercial
round-the-clock hourly energy-matching solution with
our utility partner Vattenfall. Building on this work,
we’re announcing a new around-the-clock pilot in the
Netherlands with energy provider Eneco and FlexiDAO,
a technology supplier, which will match one of our
Amsterdam datacenter’s hourly energy consumption
with the Dutch offshore windfarm Borssele.
We know that our actions alone will not decarbonize the
grids, but we are committed to taking ambitious action
to drive market demand signals that will influence the
speed and scale at which the transformation happens.
As Microsoft builds the tools and markets to meet our
zero carbon commitments, we are mindful of the need
for products, purchases, and policy that will enable a
carbon-free energy system for all.
“Every net zero scenario shares a
common, and essential, element: a
massive increase in electrification.
Electricity holds the promise of
wiping out vast sections of the global
emissions portfolio, but this only
happens if the electrons supplying
the electricity are generated from
zero carbon energy sources.”
Dr. Lucas Joppa
Chief Environmental Officer
Our Sweden datacenter will be fully supplied with hourly energy consumption with an offshore windfarm.
24Overview Carbon Water Waste Ecosystems Appendix
25
Getting to carbon negative (continued)
Reducing Scope 3 emissions
We are committed to reducing our Scope 3 emissions
by more than half by 2030. While we do not have direct
control over most emissions in the Scope 3 category
because they are generated by third parties, they
represent more than 97 percent of our total emissions.
Our carbon negative commitment includes reducing
these emissions and removing what we cannot reduce,
which we do through a reduction strategy in campuses
and datacenters, rethinking the design of our devices,
and engaging with our supply chain. This year, we saw
an increase in Scope 3 emissions, driven mainly by the
growth of our cloud services business and an increase
in the sales and usage of our devices.
Campuses and datacenters
Changing the way we work begins with measuring our
impact on the planet. This includes looking at embodied
carbon in each material that goes into our buildings,
as well as the future of how we work, travel, and think
about events.
Designing embodied carbon out
of our buildings
We’re committed to reducing not just operational
carbon but also embodied carbon—the carbon emitted
during the manufacture and transport of building
materials—which accounts for at least 11 percent of
global emissions and has historically been harder to
track and reduce. We have taken a number of steps
to address and lower our carbon footprint.
We are committed to reducing our
Scope 3 emissions by more than
half by 2030. We will achieve this
through reduction strategies in
campuses and datacenters,
rethinking design of our devices,
and engaging with our supply chain.
Our Silicon Valley campus includes the largest mass timber building in the United States.
Data-driven decision-making and emissions tracking
Microsoft partnered with other industry leaders to
create a new open-source, Azure-hosted tool, the
Embodied Carbon in Construction Calculator (EC3), to
track the embodied carbon of the raw building materials.
We used the EC3 tool in designing 17 new buildings
(3 million square feet) in our Puget Sound campus
modernization project, where we are on track to reduce
embodied carbon emissions by at least 30 percent.
We are now using the EC3 tool around the world in both
our campuses and our datacenters to track and reduce
embodied carbon and have found opportunities to
reduce concrete and steel embodied carbon by 30 to 60
percent in our datacenters.
5
Understanding construction emissions to reduce them
Microsoft and our general contractors are creating
a baseline for construction process emissions, which
include transportation of materials to the construction
site and construction installation. To date, there has
been little data and no established, industry-consistent
methodology for creating a baseline, making it difficult
for design teams to know if their emissions are better or
worse than a typical construction project. We piloted the
tracking of construction activity emissions in our Puget
Sound campus modernization project, starting with the
demolition phase (including site excavation), as well as
how much water we used.
Overview Carbon Water Waste Ecosystems Appendix
Getting to carbon negative (continued)
26
Leading the way on low-carbon building materials
We are innovating and investing in low-carbon building
materials across our global campuses and datacenters
with the aim to achieve net zero embodied carbon,
including the following.
Mass timber: At our Silicon Valley campus, we are using
mass timber, resulting in the largest mass timber building
in the United States. In addition to using this lower
carbon building material, we elected to keep two of the
existing buildings on the site, providing 36 percent of the
new campus footprint and accounting for a 28.6 percent
reduction in total embodied carbon.
5
With two floors
of mass timber, the embodied carbon savings increases
to approximately 36 percent with an estimated total
of 372 kg CO2e per square meter.
5
With over 345,000
square feet, or 2,400 tons, of 100 percent Forest
Stewardship Council (FSC) certified mass timber, the
wood reflects biophilic principles and a reduced carbon
mission. We continue to incorporate mass timber on our
campuses and are now testing the suitability of mass
timber in datacenter environments and investigating
sites to pilot these new materials.
Cement: Cement accounts for approximately 8 percent
of global emissions. We are testing and piloting lowGHG
cement innovations like CarbonCure to reduce
the carbon footprint of our buildings. LinkedIn is using
low-carbon and carbon-sequestering concrete mixes
for our new Silicon Valley headquarters and is now using
these materials in our LinkedIn Dublin campus. In our
datacenters, we are reducing how much cement we use
by utilizing longer 56-day cure times in lieu of typical
28-day cure times. We are also specifying the use of
cement replacement products such as fly ash and slag
that reduce the carbon footprint of concrete.
Low-carbon materials: We also completed research
on low-carbon materials in collaboration with Carbon
Leadership Forum (CLF), a nonprofit industry academic
organization at the University of Washington.
The research explores six low-carbon materials—earthen
slabs, non-Portland cement concrete slabs, algae-grown
bricks/panels, mycelium (mushroom) structural tubes,
purpose-grown fiber, and agricultural waste panels—
that can help reduce carbon emissions and change the
climate profile of building constructions. We are piloting
the use of these materials for our datacenters.
We are innovating and investing in
low-carbon building materials across
our global campuses and datacenters
with the aim to achieve net zero
embodied carbon.
This year, we became a founding member in SABA.This year, we became a founding member in SABA.
Rethinking how we travel
Although emissions related to business travel
represented less than 5 percent of our total emissions,
we know that we can have a larger impact with our
investments and partnerships. We have made two
investments in SAF with airline partners KLM and
Alaska. This year, we expanded this work by becoming
a founding member in the Sustainable Aviation Buyers
Alliance (SABA) and participating in the World Economic
Forum’s “Clean Skies for Tomorrow.” We are actively
supporting the development of an SAF certificate which
will set GHG accounting standards for the use of SAF to
reduce emissions by both customers and airlines in the
future. We are also looking to reduce emissions in other
areas where our learnings in SAF can be applied, from
freight and logistics to the fuel used in our datacenter
backup generators.
AppendixEcosystemsWasteWaterCarbonOverview
Devices
Over the past year, devices became even more essential
as they kept us connected, working, and learning
through the pandemic. This year, higher-than-anticipated
demand translated to higher sales and greater usage,
which caused our absolute emissions to grow. We are
committed to reducing the carbon intensity of our
devices and our efforts have also grown this year.
We have made significant investments to expand our
data-driven lifecycle assessment (LCA) and telemetry
approach to better measure, inform, and prioritize top
reduction opportunities to reduce our device carbon
intensity across the full lifecycle of our devices.
These efforts include carbon-conscious design, reducing
supply chain emissions, innovating energy-efficient
hardware and software in use, and enabling product
repairability, reusability, and recyclability. This will allow
us to deliver the best product experience with lower
carbon intensity, while also partnering with our users to
minimize carbon footprint when using our products.
Building a data-driven platform for
product design
In 2020, we began working on a platform to allow
engineers to make real-time design and material
selection decisions based on carbon impact, a key
enabler in modeling and reducing our future device
emissions. To generate our device carbon footprints,
we conduct LCAs in accordance with ISO 14040 and
ISO 14044 which enable us to estimate emissions from
manufacturing our devices down to the individual
component level. Further, we are upgrading our audit
management sourcing tool to ensure supplier carbon
reduction initiatives are fully reflected in these product
carbon footprints. We pair this with improved product
usage and distribution data. For example, the most
recent iterations of the Xbox Series X|S have improved
our awareness of full ecosystem energy usage from
consoles, information which is critical to future energy
efficiency improvements and emissions reductions.
These investments allow us more control over our
product emissions across their full lifecycle.
Sustainable Product Lifecycle
Experimenting with lower carbon design
As informed by our LCAs, a significant lever in product
development is the engineering of low-carbon design
alternatives, such as using recycled materials and
designing for a smaller manufacturing footprint.
Reduced waste
We designed our Surface Laptop Studio to allow for
“stamping,” a lower-waste manufacturing technique
that reduced our aluminum scrap rate for the product’s
base by at least 25 percent, a key contributor to an
overall product carbon reduction of 30 percent versus
its predecessor, the Surface Book 3 13”.
6
Metals
We are developing opportunities to reuse manufacturing
scrap in aluminum production, allowing us to use lowercarbon,
100 percent post-industrial recycled closed
loop aluminum for future Surface computer housings.
For neodymium in magnets, a rare earth material, we are
also exploring post-industrial scrap as a manufacturing
feedstock, enabling us to produce 100 percent recycled
neodymium in magnets for future products.
Circuit boards
In our labs, we are working to engineer a lower-carbon
and reduced-waste flax-based wiring board and
experimenting with 3D printing; we have started to
explore 100 percent post-industrial recycled tin in our
soldering paste; and we are aiming to reduce overall
materials needed through new spacing guidelines that
can shrink our circuit boards in size by up to 25 percent.
30%Reduction in total carbon
emissions of 30 percent
for Surface Laptop Studio
versus its predecessor,
Surface Book 3 13”.
Getting
to carbon negative (continued)
27
Product
design
Raw
materials
sourcing
Packaging
and
distribution
Product
use
Product
manufacturing
End-of life
Repair, refurbishment, and recycling
-
AppendixEcosystemsWasteWaterCarbonOverview
Surface Pro 8 running Windows 11.
17%Total energy
consumption for
the Surface Pro 8 is
17 percent smaller
than Pro 7.
>80%Energy-saving mode
can reduce Xbox power
usage in standby mode
by over 80 percent.
Reducing the footprint of distribution
Microsoft is an active member in the Global Logistics
Emissions Council (GLEC), an industry collaboration
through Smart Freight Centre, committing to
reducing logistics emissions through sustainable
freight initiatives. Microsoft uses this framework to
calculate and measure the carbon impact of its Scope 3
transportation emissions.
7
For shipping, we have an intelligent platform to measure
our emissions impact down to individual shipments,
and a carbon emissions budget has been developed
utilizing the same methodology. In our distribution
network, this year we finished a complete conversion of
our primary distribution center in Europe to 100 percent
renewable energy. This facility now generates 1.3 million
kWh from solar energy and avoids 690 mtCO2 annually.
Through FY22 we will plan to convert our US distribution
centers to 100 percent renewable energy through solar
panel installations and using green renewable sources.
We are also building more sustainable shipping options,
such as the delivery option launched in December 2021 to
avoid higher-carbon air freight, to give customers a choice
of more sustainable options when ordering from Microsoft.
Boosting efficiency of devices in use
For Microsoft devices, energy efficiency is a balance of
hardware and software innovation. This year, overall
device and console use phase emissions grew as a result
of higher sales and usage from customers reliant on
these products during the pandemic. That being said,
several of our newest products launched in 2021 were
designed to be the most energy efficient devices in their
product lines, including the Surface Pro 8 and Surface
Laptop 4 running Windows 11. The most recent iterations
of the Xbox Series X|S have improved our awareness of
full ecosystem energy usage from consoles, information
which is critical to future energy efficiency improvements
and emissions reductions.
Software design can also increase efficiency. We are
focused on offering low-emissions usage options such as
Energy-saving mode on Xbox, which can reduce power
usage during standby mode from 15 W down to 0.5–2 W,
as well as Xbox Cloud Gaming, which will be powered by
Azure datacenters running on 100% renewable energy
by 2025. With the release of energy-saving mode, we
are updating the initial bootup experience for users to
provide clear messaging to enable user understanding
of power modes, while encouraging them to implement
energy-saving mode on their consoles. This will be
paired with a reduction in idle and shutdown timers to
continue to improve power consumption during console
idle periods.
Providing transparency for customers
To increase transparency for customers and stakeholders,
we publish LCA results for our Xbox consoles and Surface
devices. The LCA results are contained in our Ecoprofiles,
along with information about the product’s material
composition, energy consumption, packaging, ecolabels,
product recycling, and other environmental attributes.
We have also developed a new, dynamic way for
commercial customers to gain insight into the
carbon footprint of their entire Surface device fleets.
The Microsoft Surface Emissions Estimator enables sellers
to work with customers and estimate the carbon impact
of the Surface devices and key accessories they purchase
from us.
Getting to carbon negative (continued)
28AppendixEcosystemsWasteWaterCarbonOverview
Getting to carbon negative (continued)
Supply chain
In July 2020, Microsoft added additional sustainability
requirements to its Supplier Code of Conduct to support
the company’s bold carbon ambitions. This new language
requires suppliers to disclose their own carbon footprints
and develop plans to reduce them. Microsoft has spent
the past year rolling out these requirements to a subset
of its suppliers and building a program to support them.
Engaging with suppliers on
reduction roadmaps
In July 2021, 87 percent of Microsoft’s in-scope suppliers
reported their emissions to CDP, up 12 percent from
2020. Following the closure of the CDP cycle, we worked
with suppliers to build action plans of emission reduction
activities leading up to 2030. This included educational
webinars and one-on-one meetings with suppliers to
dive into their individual footprints and discuss relevant
reduction levers. Microsoft also provided suppliers with
resources to aid in their reduction efforts. We continue to
believe that for Microsoft to reach our reduction goals,
collaboration with suppliers is fundamental and we look
forward to continuing the journey together.
In 2021, we released a set of in-depth
capacity-building tools and resources
to help our suppliers report their
GHG emissions, develop clean energy
strategies, and reduce their energyrelated
emissions.
Providing new tools and training for
supplier reporting
When Microsoft rolled out emission reporting and
reduction requirements in our Supplier Code of Conduct,
the top feedback from suppliers was the need for simple
yet comprehensive resources to walk them through the
carbon accounting process. In response, we released a
set of in-depth capacity-building tools and resources,
developed in partnership with ENGIE Impact, WSP, and
CDP to help companies, and particularly our suppliers,
report their GHG emissions, develop clean energy
strategies, and reduce their energy-related emissions.
In September 2021, LinkedIn released a new course,
Fundamentals of Sustainable Supply Chain Management,
to help organizations and professionals more effectively
engage with their suppliers.
Building new forms of financing for suppliers
Based on our engagements with suppliers, we knew
more technical resources were necessary but insufficient
to drive change. Our suppliers need access to new
forms of finance to invest in new solutions. This year,
we launched a new partnership with the International
Finance Corporation (IFC), a member of the World Bank
Group. IFC will work with designated Microsoft suppliers
in emerging markets, starting in Asia, to identify
technical solutions reducing GHG emissions, provide
implementation assistance, and offer financing solutions
to help them make investments in more efficient and
low-carbon operations.
Reimagining circularity in our supply chain
We have taken a first-of-a-kind approach towards
designing and implementing Circular Centers in
our datacenter campuses, aligning our end-of-life
dispositioning processes with an integrated plan across
the entire supply chain. From sustainable design at
the start of an asset lifecycle to sustainable sourcing,
manufacturing, delivery, and use, towards a diversified
approach after decommissioning, this integrated
plan ensures that assets are dispositioned to optimize
value, security, compliance, and sustainability. Over the
past year, we have engaged with new suppliers who
are able to remanufacture assets and components,
effectively enabling new lifecycles for our assets.
We have successfully demonstrated takeback/buyback
models with our original asset suppliers, closing the
loop on assets and enabling suppliers to repurpose or
reuse assets and components, resulting in significant
sustainability outcomes for emissions reduction and
material recovery. Our Circular Center program will
enable 90 percent reuse of datacenter computing
assets, significantly contributing to our goal of reducing
emissions by more than 50 percent by 2030. In FY21, our
overall reuse of assets was 78 percent.
Using lifecycle assessments for targeted
hardware improvements
As we outline in Chapter 4 of our Responsible Sourcing
2021 Report, we are executing an ambitious plan to
empower all strategic device suppliers to commit to
science-based carbon reduction activities specifically
targeted to reduce emissions associated with hardware
manufacturing. We have used LCAs to prioritize supplier
categories that contribute the greatest emissions as well
as the types of actions suppliers can take to make the
biggest shifts in decarbonization, including powering
their operations with renewable energy, increasing
process and energy efficiencies, and reducing material
use and waste onsite.
To learn more, see Chapter 4 of the
Responsible Sourcing 2021 Report
29Overview Carbon Water Waste Ecosystems Appendix
Removing carbon
In January 2021, Microsoft announced that we had made
the world’s largest purchase of carbon removal in history.
Our focus on removals instead of avoided emissions
offsets is aligned to our carbon negative commitment but
is also motivated by what climate science tells us is needed
to reach net zero—specifically the IPCC’s projection that
the planet could need as much as 10 gigatons of carbon
dioxide removal by mid-century, depending on the scale
and pace of decarbonization. With our purchases as well
as our investments, we are working to help build this new
market with integrity and quality.
It hasn’t been easy. As we documented in our September
2021 Nature article, high-quality carbon removal is scarce
for three reasons. First, there is not a clear common
definition of net zero and the role that removals play in
net zero goals. Second, removals are not well accounted
for in the practice of carbon measurement, which itself
is still evolving. And third, the removal market is very
young, especially for truly permanent carbon removal,
which is prohibitively expensive.
We know that we’re among the early entities to do
homework on this topic, and that’s why we are committed
to sharing lessons learned, as documented in our 2021
white paper and high-quality removal criteria. We are
actively working with our Climate Innovation Fund to
invest in promising carbon removal companies. We have
contributed comments to policy frameworks that set the
standards for carbon removal, such as a carbon removal
certification program by the European Commission, and
efforts by the United States federal government (both
the Department of Agriculture and the Department of
Energy) to specify high-quality removal. And we continue
to evolve our own removal portfolio mix to be a balance
of low-durability and high-durability volumes.
Carbon removal projects
In our first year, we chose projects that will help meet our commitment while
supporting innovation in the market, including the following.
Community-based reforestation
Taking Root’s CommuniTree reforestation in Nicaragua
—the largest such project in the country—partners
with farming families to help develop sustainable
livelihoods by growing native tree species on marginal
farmland. The United Nations and the European Union
have used this project as a model for reforestation.
Biochar
We invested in a portfolio from Puro.earth Oy,
including from Carbon Cycle, Carbofex, and ECHO2,
small operations in Germany, Finland, and Australia
that use biomass residue (for example, wood chips
and forest waste) to sequester carbon dioxide in
biochar for use in soil amendment and other products.
Direct air capture
We are actively working with our Climate Innovation
Fund to invest in promising carbon removal companies
and projects. Climeworks’ Orca direct air capture
plant in Iceland removes carbon dioxide from the
atmosphere and stores it permanently underground
using a mineralization technology developed by the
Icelandic company Carbfix.
Our FY22 aspiration was even larger, aiming for
1.5 million mtCO2. We launched a new request for
proposals in July 2021, seeking the highest quality
of projects on the market, both nature-based and
engineered. We are on a path to fulfilling that goal,
with 1.1 million mtCO2 contracted to date in FY22.
Getting to carbon negative (continued)
1.1M
mtCO2
removal contracted to
date in FY22.
Looking ahead, we know that the market needs to
improve the quality of carbon removal accounting,
and that we need to have a clearer line of sight to
affordable supply. That’s why in 2021 we undertook
the following projects.
• In partnership with Carbon Direct, we published our
carbon dioxide removal guidance. These criteria are
our minimal viable specifications for the most common
project types that we will consider for procurement.
We will continue to expand on our criteria as the
market adapts and see this as part of our market
development work.
• We funded research by CarbonPlan to produce their
lessons learned and analysis from a systematic review
of 14 protocols for soil carbon offsets for buyers from
projects in the voluntary market today.
• We commissioned a report from Lawrence Livermore
National Laboratory on likely carbon removal supply
and cost projections for 2030, which will be available in
Q1 of 2022.
• We collaborated with researchers from the University
of Vermont, University of Minnesota, Concordia
University, and Simon Fraser University to develop and
explore the climate implications of temporary carbon
storage in nature as a means to inform our carbon
removal strategies.
• We co-founded the Business Alliance for Scaling
Climate Solutions and the carbon removal workgroup
of the World Economic Forum’s Alliance of CEO
Climate Leaders.
30AppendixEcosystemsWasteWaterCarbonOverview
Driving
transformation
Microsoft and our partners have been
investing in technologies across every
industry and region to help companies
face new and shifting market conditions.
The rapid pace of this transformation
has the potential to change the world
for the better.
The world’s climate experts agree that people,
companies, industries, and nations must take urgent
action to reduce carbon emissions. Reducing carbon
emissions and addressing environmental equity
require collective measures to understand and mitigate
environmental impacts.
Organizations need to be able to record their
environmental footprint, report to stakeholders, reduce
their resource usage, remove their footprint through
carbon offsets or recycling, and replace high-footprint
resources with low-footprint ones.
Product
Microsoft is leading new product innovations for the
benefit of our planet. With new offerings ranging
from providing transparency on the footprint of
our devices and services, to digital supply chains
that improve business processes and reduce carbon
footprints, to IoT sensors streaming real-time telemetry
for predictive analytics, there is no shortage of
examples of how technology can enable ambitious
sustainability outcomes.
The Microsoft Cloud for Sustainability enables companies to record, report, and reduce emissions.
Microsoft Cloud
for Sustainability
Microsoft launched the Microsoft Cloud for
Sustainability in July 2021. The Microsoft Cloud for
Sustainability provides comprehensive, integrated,
and automated sustainability management for
organizations at any stage of the sustainability
journey. It is designed to streamline the process for
organizations to collect data, analyze data, and turn
data into insights. Companies can more effectively
record, report, and reduce emissions on a path to net
zero, and we plan to support water and waste tracking
in the future. Since the announcement, we’ve brought
the Microsoft Cloud for Sustainability into a public
preview period, with several customers using it to guide
their sustainability strategies. Microsoft is also serving
as “customer one,” shaping product requirements
and beginning to adopt this for our own
emissions reporting.
31Overview Carbon Water Waste Ecosystems Appendix
Driving transformation (continued)
Delivering transparency on
Microsoft product emissions
While the Microsoft Cloud for Sustainability may be
the first standalone sustainability-focused product at
Microsoft, it’s not our first work on emissions tracking
and reporting. For more than two years, we have
pioneered tools and features to provide a close to realtime
view of our products’ footprint, and we continue to
deliver more transparency to customers.
The Emissions Impact Dashboard provides customers
with transparency into their carbon emissions resulting
from their cloud usage, making Microsoft the only cloud
provider to provide full transparency to customers
across all three scopes of emissions. Using AI and
advanced analytics, the Emissions Impact Dashboard
shows reduction trends for customer cloud usage over
time, providing the ability to forecast cloud emissions
and simplify carbon reporting. It uses consistent and
accurate carbon accounting to quantify the impact of
Microsoft cloud services on customers’ environmental
footprint and can compile the information into reports
for voluntary or statutory reporting requirements.
This solution became generally available in Q3 2021.
Find out more on the
Emissions Impact Dashboard
The Microsoft Surface Emissions Estimator is a new,
dynamic way for commercial customers to gain insight
into the carbon footprint of their entire Surface device
fleets. The Estimator uses state-of-the-art carbon
assessment technologies to enable customers to get
more accurate estimations of the carbon impact of
the Surface devices they purchase from us. Taking the
customer on a journey through a Surface product’s
lifecycle, the Estimator provides a visual indication of
improvements over previous product models, highlights
some of the changes made to reduce carbon emissions,
and estimates carbon reductions associated with
deployments of new Surface models. Customers can
learn more about the impact of Surface products
on their Scope 2 and 3 emissions from the Microsoft
support team, who started to use the Estimator to
provide reports to commercial customers in late 2021.
The Microsoft Teams Carbon Avoidance Screen posts
a remote meeting summary of avoided carbon based on
the distance between the organizer and the participant.
The goal is to encourage people to use Teams’ remote
capabilities rather than travel for meetings. This will pilot
with a few select customers in 2022.
For Windows energy usage, we are co-innovating with
third parties to help inform customers about the carbon
footprint associated with their computing. One partner,
elow (formerly CSN Energy), was able to reduce
use-phase carbon emissions up to 6 percent through a
co-innovated elow Carbon App by providing guidance
to users to charge their computers based on the realtime
carbon intensity of the electric grid. Another, AVOB,
provides more accurate energy consumption data to
office workstations as well as automated mechanisms
to optimize energy consumption, enabling up to a 50
percent reduction in energy usage while increasing
performance and computer lifespan.
Reflective of the innovation we continually pursue,
some of these tools have more advanced methodologies
than Microsoft currently uses for its corporate
carbon disclosure.
32
Providing solutions for specific sustainability
challenges
We have found new opportunities to use Microsoft
solutions to more sustainably manage operations.
We started with our own operations and are expanding
their use beyond our direct business activities.
Managing buildings and spaces
Microsoft is accelerating sustainability through Smart
Places, with IoT and AI to optimize the way buildings,
campuses, and cities consume and deliver resources
and create efficiencies. Based on Azure IoT, Smart Places
include data-driven technologies for monitoring and
managing carbon, water, and waste in buildings to turn
inefficiencies into opportunities to reduce environmental
impact. Organizations can optimize energy management
and reduce carbon emissions by using predictive
monitoring to help manage equipment performance
and energy consumption and to explore grid-interactive
efficient buildings and infrastructure.
Providing visibility across supply chain
Microsoft Dynamics 365 Supply Chain Insights breaks
down data silos by connecting and taking inputs from
enterprise resource planning and supply chain systems
across an organization. Using industry data models and
AI-powered weather and environmental risk signals from
Bing and third-party sources, operations can get a better
view of climate-related risk to build a more resilient
supply chain.
For more than two years, we have
pioneered tools and features to
provide a close to real-time view
of our products’ footprint, and
we continue to deliver more
transparency to customers.
Overview Carbon Water Waste Ecosystems Appendix
Driving transformation (continued)
Customers and partners
Matching the supply and demand of carbon
sequestration with AI and machine learning
Project Acorn, developed by Rabobank, is a global,
transparent, and technology-enabled marketplace and
ecosystem for carbon sequestration. The proposition
facilitates agroforestry projects among smallholder
farmers in developing countries that sequester carbon
in biomass through tree growth; the carbon removal
units that result from this represent actual sequestration.
To make small-size projects on an individual farmer level
economically viable, Project Acorn uses remote sensing
technologies, including the analysis of satellite imagery
by specialized partners. The architectural design was
built on a Dynamics 365 platform and uses customized
Azure functionality.
Optimizing offshore wind turbines with AI
Algo Engines and Microsoft helped Ørsted, the
world leader in offshore wind energy, to optimize the
performance of more than 1,300 turbines on its wind
farms, enabling it to fully phase out coal by 2023 and
increase offshore wind capacity to 15 GW (enough for
30 million people) by 2025. Ørsted uses Microsoft Azure
AI to determine where new turbines should be deployed.
Previously, the computations for the foundations alone
took weeks. With the cloud, that time is reduced to four
to eight hours. The company also uses drones to inspect
equipment and predictive maintenance to ensure all
equipment is running at peak performance.
8
1,300Microsoft helped
Ørsted optimize the
performance of more
than 1,300 turbines,
enabling it to fully
phase out coal by 2023
and increase offshore
wind capacity to 15 GW
by 2025.
Targeting carbon neutrality with
Azure Digital Twins
Vasakronan, Sweden’s largest real estate company,
manages a real estate portfolio worth SEK170 billion
(USD19.6 billion). To reduce operating costs for its
commercial properties, the company has adopted
ProptechOS, an Azure IoT-based solution that unlocks
the potential of connected, intelligent properties.
By adding Azure Digital Twins to this solution, in 2021
the company has saved upwards of 6 million krona
(USD700,000) in energy consumption cost alone.
By focusing on sustainability improvements, equally
important to tenants, the company has experienced
higher incomes through increased occupancy while
simultaneously driving higher asset values.
8
Improving service efficiency with
remote assistance
Mercedes-Benz USA chose Microsoft Dynamics 365
Remote Assist and HoloLens 2 technologies to improve
service technician efficiency, reduce time to diagnose,
and lower the cost and environmental impact of servicerelated
travel. With Dynamics 365 Remote Assist and
HoloLens 2, problems are typically resolved remotely
without having to wait for a Field Service Engineer to
visit the dealer. Travel has been cut by up to 40 percent,
significantly lowering their carbon footprint.
8
Enabling building decarbonization with AI
Nomad Go used the Co-Innovation Labs, recently
launched by Sony Semiconductor Solutions Corporation
and Microsoft, to build a version of its building
decarbonization solution using Azure Cognitive Services
for computer vision with Sony’s IMX500 intelligent vision
sensor. Nomad Go’s platform anonymously counts the
number of people within a space (such as conference
rooms or open areas), and then uses the real-time
data to precisely heat, cool, and ventilate rooms only
when occupied. This replaces set schedules, standard in
most commercial buildings, which condition rooms for
12 hours or more a day, even when no one is in the space.
The Nomad Go solution significantly reduces energy
usage and greenhouse emissions by up to 38 percent.
8
Vasakronan uses an Azure IoT-based solution for connected, intelligent properties.
33Overview Carbon Water Waste Ecosystems Appendix
34
Enabling
systems change
We know that our action alone will
not address the climate crisis. We are
focused on new ways to harness the
power of technology, partnerships,
investments, and policy to drive impact
at scale and pace to help the world get
to carbon zero.
At Microsoft we know that our action alone will not
address the climate crisis, so we must help develop
the markets for carbon abatement approaches. This is
a partnership between our operational sustainability
program, Climate Innovation Fund, and Microsoft
Research to ensure that we are not only procuring
and funding the technologies we need to meet our
commitments, but also investing in the companies
that provide them—and supporting research and
development for pre-commercial solutions.
Research and development
Researchers at Microsoft tackle critical challenges that
will shape the future of the world and the company.
Given the significance of sustainability challenges for
our global future, research teams around the world are
developing new technologies and approaches to reduce
carbon, use compute resources more efficiently, and
bring AI to bear on problems from carbon emissions
modeling to improvements in renewable energy.
Improving reliability of carbon
removal projects
Afforestation (growth of net new trees) pulls carbon
from the atmosphere. Trees on farms can also improve
agricultural productivity and provide additional income
to farmers through the sale of carbon credits. Buyers of
such credits, however, want to ensure that the farmer is
properly incentivized to safeguard tree growth over time.
Using the lens of contract theory, Microsoft research
shows how to calculate the optimal stream of payments
over time to ensure incentive alignment. This research
can be applied to enlarge the supply of carbon reduction
credits, especially outside the developed world.
Trees on farms can provide additional
income to farmers through the sale of
carbon credits. Using contract theory,
Microsoft research shows how to
calculate the optimal stream of
payments to ensure farmers are
properly incentivized to safeguard
tree growth over time.
Reducing the energy impact of AI
Many AI tasks, like predicting the next word a person
will type, rely on machine learning with neural networks,
also known as deep learning. These neural networks
can unlock new sustainability solutions, but also
can consume a lot of energy. In a new effort, we are
building tools for AI developers to predict the energy
consumption of a neural network before deployment,
so that more compute- and energy-efficient networks
can be designed upfront. We have progressed on other
techniques enabling more efficient networks, including
factorizable neural operators (FNO), a compression
technique that affords reductions in compute and
memory requirements. Applied to large-scale language
models such as BERT, FNO reduced memory usage
by 80 percent and prediction time by 50 percent,
with less than a 5 percent reduction in accuracy.
Further improvements may be achieved by combining
FNO with other model compression methods, such
as distillation and quantization. Collaborating with
researchers at NVIDIA, we’ve developed a new method
to find neural networks that satisfy hardware constraints,
such as low power consumption for mobile devices.
This highly efficient method can find high-performing
architectures in minutes, enabling carbon savings
compared to previous methods. We also advanced AI
systems research to explicitly optimize for server power
reduction, in addition to capacity efficiency; this work
has resulted in a multi-GWh/year reduction of power
consumption for Azure and Microsoft 365.
Overview Carbon Water Waste Ecosystems Appendix
Predicting the efficacy of carbon
reduction strategies
By using deep learning methods, we have predicted
carbon reduction and other climate-related outcomes
with much faster turnaround times, and similar or better
predictive accuracy, than using traditional physical
simulation models. For example, with the University of
Tokyo, we developed a neural network-based model
that can simulate physical and chemical processes critical
to carbon storage, such as the formation of hydrates
that can fill cracks between sand and rocks under the
ocean floor, thus playing a critical role in ensuring safer
thousand-year storage of carbon. With this model, we
were able to accurately predict hydrate formation 1,000
times faster than with numerical models. With Tsinghua
University, we developed a neural network-based
atmosphere simulator that estimates carbon and other
pollutant emissions with better accuracy than widely
used numerical atmosphere models, while using only
1 percent of the computational cost. For simulations
of the behavior of fluids in the atmosphere to better
understand the diffusion of pollutants and the global
warming effect, we invented a neural network-based
model to solve the necessary partial differential
equations, delivering accuracy on par with traditional
numerical solvers while delivering results 50 to 100
times faster.
8
Solving solar manufacturing problems
before they start
Satisfying the growing global demand for renewable
energy requires reducing costs and better integrating
renewables into electricity and transportation grids.
In collaboration with one of India’s largest solar panel
manufacturers, Microsoft researchers developed a
machine learning-based computer vision system that
can accurately detect and classify defects in solar panels
as they are being manufactured. By fixing defects in real
time, solar panel manufacturers can achieve higher yield
and lower production costs, and solar energy operators
can produce more energy per panel.
Enabling systems change (continued)
Supporting new carbon reduction roadmaps
Carbon Insights is a visualization and analysis platform
that provides carbon neutralization roadmaps for
researchers, policy audiences, and other sustainability
decision-makers. Dashboards and maps combine local
detail with global consistency to show daily carbon
emission sources, sinks, and flux with near-global
coverage. The tool is based on data aggregated from
Tsinghua University research and public datasets.
It provides strategic insights for challenges such as
prioritizing local emissions reductions or estimating
impacts on economic growth.
1%We developed a
neural networkbased
atmosphere
simulator that estimates
carbon and other
pollutant emissions
with better accuracy
than widely used
numerical atmosphere
models, while using
only 1 percent of the
computational cost.
Deep learning to predict carbon reduction and other climate-related outcomes.
35Overview Carbon Water Waste Ecosystems Appendix
Funding innovation
To achieve net zero emissions globally, we must
reduce carbon emissions across every sector and
scale carbon markets as much as possible, as soon
as possible. From the outset, the Climate Innovation
Fund (CIF) has identified and prioritized investment
in sectors that have the largest carbon reduction and
removal potential globally and where Microsoft’s
carbon footprint is greatest. We also make strategic
philanthropic investments, like our $100 million donation
to Breakthrough Energy’s Catalyst initiative, to help
accelerate and scale new carbon solutions.
Our initial CIF investments included innovations in
market-enabling technologies such as climate impact
certification, forest carbon analytics, and carbon
transformation, plus industry-specific carbon reduction
via sustainable fuels, distributed energy integration, and
supply chain optimization technologies. Additionally, we
have made investment commitments in carbon reduction
solutions for global communities in emerging economies,
including India and Africa, as well as clean energy access
solutions for communities in the United States.
Enabling systems change (continued)
New CIF investments in 2021 include:
Market-enabling
Climate impact certification
SustainCERT is a software-enabled carbon emissions
accounting and verification platform reimagining a
future where issuance of high-quality carbon credits
and other impact claims becomes scalable with integrity.
SustainCERT has certified over 1,200 projects around
the world.
8
AI-enabled forest carbon exchanges
NCX (formerly SilviaTerra) is a science-driven forest
carbon marketplace delivering large-scale, immediate
impact for climate and communities. By using high
integrity data to generate carbon credits that connect
corporations to family forests, NCX is democratizing
access to markets while enabling real climate action.
In 2021, nearly 2,500 participating landowners with
4.3 million forested acres committed to defer their
timber harvest.
8
Transformation to low-carbon materials
Twelve is a carbon transformation company turning
carbon dioxide into valuable materials and products.
Its solution offers a pathway to replace fossil-derived
carbon in essential products ranging from detergents
to automotive parts. In 2021, Twelve produced the
world’s first jet fuel made from CO2 using electrolysis.
The CIF investment is supporting the scale-up of
Twelve’s system to industrial scale.
With NCX’s science-driven forest
carbon marketplace, nearly 2,500
participating landowners with
4.3 million forested acres committed
to defer their timber harvest in 2021.
Industry decarbonization
Sustainable fuels
LanzaJet is a sustainable fuels technology company
and producer dedicated to decarbonizing hard-toabate
sectors, such as aviation. LanzaJet is constructing
a renewable fuels plant in Georgia called Freedom Pines
Fuels that will produce 10 million gallons of SAF and
renewable diesel per year from sustainable ethanol,
including from waste-based feedstocks.
8
Distributed energy resources
AutoGrid delivers a suite of distributed energy
applications that allow utilities and energy service
providers to deliver clean, flexible power. In 2021,
AutoGrid enabled a set of unified demand response
and distributed energy resource programs totaling
165 MW in Texas, enabling peak plant flexibility for
both grid resilience and renewable integration.
8
Solar performance assurance
Omnidian provides solar system performance
management for residential, commercial, and industrial
clean energy generation. Omnidian’s network of assets
include 326 MW*, with incremental production from
Omnidian’s services resulting in 14,090 mtCO2 avoided
in 2020. (*These figures do not include Omnidian’s
systems under backup management.)
8
Emerging economies
Green growth in India
Eversource Capital’s Green Growth Equity Fund is
committed to accelerating India’s rapidly growing
climate innovation sectors, spanning electric mobility,
renewable power, and circular economy solutions.
To date, Eversource Capital’s portfolio companies have
generated 330 MWh of renewable power, resulting
in 290,000 mtCO2 avoided.
8
36Overview Carbon Water Waste Ecosystems Appendix
Enabling systems change (continued)
Other 2021 investments include:
• Just Climate, a global, climate-led investment business
focused on scaling capital towards the most impactful
climate solutions.
• Buoyant Ventures, a venture capital fund focused
on digital solutions for climate risk.
• Carbon Direct Fund, a growth equity fund dedicated
to investing in high-growth carbon removal and
utilization technology leaders.
• Earthshot Ventures, a climate technology venture
capital fund, spun out of Elemental Excelerator that
builds on their global network of customers, investors,
corporations, and policymakers. Earthshot Ventures
invests in hardware and software technologies in
energy, mobility, food, industry, and carbon.
• Energy Impact Partners Elevate Future Fund,
a venture capital fund focused on creating a more
diverse founder community and inclusive venture
capital ecosystem within the broader energy transition.
• Energy Impact Partners Frontier Fund, a venture
capital fund which invests in emerging technologies
providing solutions for the deep decarbonization of
asset-intensive industries.
Impact from our 2020 investments include:
Supporting clean energy in Asia
Via the Southeast Asia Clean Energy Facility (SEACEF), we
invested in Xurya, a clean energy company committed
to accelerating the rooftop solar market in Indonesia.
It executed the first wave of projects with 16.5 megawatts
peak (MWp) in operation and 16.6 MWp under contract
for construction as of November 2021, up from
0.8 MWp installed at the time of SEACEF’s investment.
In the 12 months following SEACEF’s investment, Xurya
produced 6,765 MWh resulting in 5,800 mtCO2 avoided.
8
Carbon savings from the deployment
of smart thermostats across
SmartRent’s portfolio in 2020 were
55,000 MWh of energy, 5.5 million
gallons of gasoline equivalent, and
a net carbon savings of 68,000 mtCO2.8
Saving energy with smart home automation
Energy Impact Partners (EIP) Fund II participated
in SmartRent’s $60 million Series C funding round.
SmartRent is a smart home automation platform
which provides property managers with visibility
and control over assets and delivers a smart home
experience to residents in the United States and
Canada. Environmental savings from the deployment
of smart thermostats across its portfolio in 2020 were
estimated to be 55,000 MWh of energy, 5.5 million
gallons of gasoline equivalent, and carbon savings
of 68,000 mtCO2.
8
Addressing air pollution and climate inequities
In September 2021, The Proceedings of the National
Academy of Sciences published a study that found that
Hispanic and Black people in the San Francisco Bay Area
experienced up to 30 percent higher air pollution than
average. Drawing from Aclima’s mobile measurements,
the authors including UT Austin, UC Berkeley, and
Aclima scientists found that substantial disparities
arise from regional and local differences in pollution.
These findings show that combining hyperlocal air
pollution data with demographic data is an important
way to identify disproportionate impacts that go unseen
using traditional methods and can help decision-makers
target emission reduction and mitigation efforts where
they are needed most.
8
Learn more
about CIF here
37
Aclima’s mobile measurements can help decision-makers target emission reduction and mitigation efforts.
AppendixEcosystemsWasteWaterCarbonOverview
low-res image
Enabling systems change (continued)
Investing in AI
Through our AI for Earth program, we are supporting
startups and nonprofits capitalizing on the cloud, data,
and AI to accelerate the pace of innovation in carbon.
Mapping forest carbon potential down
to individual trees
The University of Maryland is applying machine learning
algorithms on airborne lidar data, collected over the
entire state of Maryland, to identify individual trees
to measure forest carbon storage, thereby reducing
uncertainties in current carbon monitoring prototypes
used for measurement, reporting, and verification
purposes in forest management and climate initiatives.
Calculating carbon stocks with
AI-based monitoring
Jejak.in is applying AI to automatically classify and label
photos captured by drone cameras and satellites in the
Citarum Watershed area in West Java, Indonesia, for
a more effective and efficient method to identify trees
and vegetation, as well as calculate carbon stocks in
the area. This will be used to help monitor the success
of conservation programs and make better decisions
about future programs.
Machine learning to automatically distinguish and quantify Mexico’s mangroves from drone and satellite imagery.
Estimating mangrove
biomass and carbon storage
with remote sensing
and machine learning
The University of California San Diego is using
remote sensing technology and machine learning to
better characterize mangroves, guide management
of the habitat, and curb mangrove deforestation
by increasing the availability of reliable data on
mangrove coverage and extent. The Aburto Lab
and Engineers for Exploration are developing
a methodology that uses machine learning to
automatically distinguish and quantify Mexico’s
mangroves from drone and satellite imagery,
resulting in an improved understanding of how
mangrove distribution changes through time, as
well as the ability to estimate mangrove biomass
and calculate the carbon storage.
38AppendixEcosystemsWasteWaterCarbonOverview
Enabling systems change (continued)
Driving collective action
Getting to net zero is going to take more than
investments, technology, and commitments. We’ll
need to use all those together in sectoral and multistakeholder
organizations that drive full ecosystem
change. Microsoft participates in many of these
efforts and spearheads work across several, including
the following.
Transform to Net Zero
Transform to Net Zero (TONZ) is a cross-sector initiative
to accelerate the transition to a net zero global economy.
The group’s 2025 goal is for all Fortune Global 1000
companies to have targets backed up by transformation
plans to achieve net zero no later than 2050. TONZ’s
strategy is to achieve this through enabling business
transformation, taking collective action, and driving
systemic change. This includes a focus on demonstrating
the transformation of members’ own businesses
and inspiring transformation in other companies.
Since its initial launch in late 2020, TONZ has released
a position paper and action plan to define the group’s
position on net zero goals and their implementation,
formed decarbonization approaches across key supply
chain areas, and published two research reports
on the building blocks of net zero and key sectoral
challenges. In Q3 2021, TONZ published the first of a
set of transformation guides to share lessons learned
from TONZ companies on net zero implementation
across procurement, net zero goalsetting, and
policy engagement.
See TONZ Position Paper
and Action Plan here
Business Alliance to Scale Climate Solutions
(BASCS)
Launched in 2021, BASCS aims to bridge the gap in
climate finance by providing a central platform for
businesses and experts to meet, learn, discuss, and
act together. As a founding member of the alliance,
Microsoft is sharing our resources and experiences
as an early adopter of climate solutions, as well as an
investor providing catalytic capital for nascent and
first-of-a-kind climate solutions.
Carbon Removal Climate Action Group
Microsoft co-founded the Carbon Removal Climate
Action Group of the World Economic Forum (WEF)
CEO Climate Leaders Alliance to help raise corporate
awareness about the importance of carbon removal.
The alliance will also create a due diligence platform and
a joint purchasing strategy for carbon removal.
Sustainable Aviation Fuel Buyers Alliance
(SABA)
In April 2021, Microsoft was announced as one of
the founding members of SABA. Led by RMI and the
Environmental Defense Fund (EDF), SABA will work
to accelerate the path to net zero aviation by driving
investment in SAF, catalyzing SAF production and
technological innovation, and supporting member
engagement in policy-making efforts.
Playing for the Planet
Our gaming business has partnered with the United
Nations Environment Programme on the Playing for the
Planet initiative. Its goals are to reduce the impact of the
gaming ecosystem on the environment through better
carbon accounting and educating gamers everywhere
on sustainable causes. For example, the Minecraft Build
a Better World Initiative delivers in-game content about
the need to protect and conserve, and matching funds to
charitable organizations focused on conservation.
2025TONZ’s 2025 goal is
for all Fortune Global
1000 companies to have
targets backed up by
transformation plans to
achieve net zero no later
than 2050.
Green activations in games
Mojang have already established themselves in the
gaming community as world leaders in social outreach
and education. Minecraft: Education Edition has reached
millions of students with build challenges to create
sustainable cities of the future, and with curriculum
aligned lesson plans on climate and environmental
themes. Mojang is committed to continued innovation
in sustainability with new projects including the
UNESCO Global Build Challenge, Climate Futures in
partnership with Met Office, and the Sustainable City
Map. By integrating green activations in games and
supporting the global environmental agenda through
initiatives ranging from planting millions of trees to
reducing plastic in their products, we believe Xbox can
have significant impact in improving the world.
Green Software Foundation
Microsoft launched the Green Software Foundation
in May 2021 alongside Accenture, ThoughtWorks, and
GitHub to create green software industry standards, drive
awareness, grow advocacy, and accelerate innovation
to enable developers to reduce the carbon emissions of
the software platforms that they build. The foundation
has grown to 20 members and over 350 individual
contributors collaborating on standards, innovation,
and education. The first version of the Software Carbon
Intensity (SCI) standard, a methodology for scoring
software applications, was released in December 2021.
39AppendixEcosystemsWasteWaterCarbonOverview
Enabling systems change (continued)
Advocating for net zero
Future climate-related risks would be reduced by the
upscaling and acceleration of far-reaching, multilevel,
and cross-sectoral climate mitigation and by
both incremental and transformational adaptation.
Those efforts must be guided by policy that accelerates
carbon reduction and removal opportunities. Over the
past year Microsoft deepened its policy advocacy on
carbon and sharpened its focus on net zero goals,
energy grid decarbonization, measurement, and markets
in the United States and European Union through
direct lobbying, engagement, and groups such as the
Climate Leadership Council, CERES BICEP Network,
Advanced Energy Economy, Climate and Clean Energy
Solutions, and the Renewable Energy Buyers Alliance.
Microsoft initiatives include the following.
Net zero policies
Microsoft is encouraging countries to make net zero
carbon-aligned national commitments and develop
effective implementation plans. Microsoft advocated for
the United States’ reentry to the Paris Climate Agreement
which occurred in January 2021 and for a national US
climate target to cut emissions by 50 percent by 2030.
We also voiced Microsoft support of the European
Commission’s ”Fit for 55” package, a set of legislative
initiatives that will set the framework for the whole EU
to achieve the binding target of reducing GHG emissions
by at least 55 percent by 2030 (based on 1990 levels).
Grid decarbonization
Microsoft advocated for strong climate and clean
energy provisions in the 2021 US budget reconciliation
and infrastructure bills including new siting authority
for transmission lines, support for innovative
technologies and projects that remove carbon dioxide,
modernizing the grid, accelerating clean energy, and
strengthening resilience to the impacts of a changing
climate. Microsoft actively engages in decarbonization
and grid modernization policy efforts in Arizona,
Texas, Illinois, and Virginia, and encouraged FERC to
issue policy guidance on how to incorporate statedetermined
carbon prices in wholesale electricity
markets. In Europe, Microsoft engages actively with
the European institutions advocating for robust clean
energy rules and sustainability metrics for datacenters
and submitted comments in February to the European
Commission Public Consultations on the revisions of
the Renewable Energy Directive and Energy Efficiency
Directive. Microsoft engaged with the UK government
and energy regulator to inform the “Digitalising the UK
energy system for net zero” strategy published in July
and its implementation.
Carbon measurement
Microsoft is advocating for common accounting
and public disclosure of carbon and climate-related
information. In June, Microsoft submitted comments
to the US Securities Exchange Commission in support
of the development and adoption of disclosure rules
that will provide material, decision-useful information
for investors. In September, Microsoft filed an aligned
response to the UK Financial Conduct Authority’s
consultation on Carbon Measurement and provided
information to the US Department of Defense on
climate change disclosure practices to support
implementation of the Executive Order on Climate
Related Financial Disclosure. In March, Microsoft joined
the European Green Digital Coalition, supported by the
European Commission, with the goals of developing
standardized, credible, and comparable methodologies
for calculating the net impact of green digital solutions
in different sectors, and accelerating the contribution
of digital technology to our collective 2030 goals.
Microsoft supported a new academic report by
Cambridge Institute for Sustainability Leadership (CISL),
exploring how trade and trade-related policies could
be used to support decarbonization, focused on the
EU Carbon Border Adjustment Mechanisms (CBAM),
as part of advancing the conversation around common
standards for carbon measurement and accounting.
Carbon-related markets
Microsoft is advocating a range of policies to help
carbon-related markets mature, including carbon
pricing and research and development (R&D).
Microsoft supported the Washington State Climate
Commitment Act, approved in May, which sets a cap on
emissions and establishes a robust carbon pricing
and investment program. Microsoft advocated for
increased US R&D in key technologies such as energy
storage and direct air capture, which was included in
the 2020 Energy Act and the bipartisan infrastructure
package. Microsoft is advancing the development of
carbon removal markets and consistent, high-quality
carbon removal standards through comments to the
US Department of Agriculture and by joining the Carbon
Capture Coalition. In August, Microsoft submitted a
response to the European Commission Carbon Removal
Certification Mechanism survey to advocate for common
standards for carbon removal quality and to provide
input into the design of a future legislative framework.
Microsoft is advocating for common accounting and public disclosure of carbon and climate-related information.
40AppendixEcosystemsWasteWaterCarbonOverview
Key trends
FY21 was a year of progress and learning for Microsoft on our journey to carbon negative.
1
Carbon removal demand is hot—and durable
supply is short.
Carbon removal is a seller’s market. The pipeline
is short for surging demand, and corporate
buyers need more project development.
Climate change is further complicating this, as
wildfires erode the forest carbon purchases we’ve
made and we, as well as other purchasers, need
expanded credit buffers to ensure credits we pay
for are removing carbon from the atmosphere.
2
Progress on carbon reduction will be “lumpy”
as carbon data and measurement improves.
As Microsoft and the world mature in carbon
accounting, we will continue to get better
at understanding how our decisions reduce,
or sometimes increase, carbon emissions.
For example, some of the data used to estimate
hardware emissions within certain categories
of Scope 3 is drawn from industry-average
“secondary” data rather than directly from
suppliers. This data may not be reflective
of recent supplier activity, which may cause
fluctuations in emissions as primary data from
suppliers is introduced.
3
Carbon removal still lacks common standards
needed to scale.
Projects don’t consistently account for durability,
additionality, and leakage. To scale the market
in the long term, we need the enabling
infrastructure to measure, monitor, and verify
carbon removal quality now, and we need clear
guidelines under the Paris Agreement about how
to reconcile corporate and country-level actions.
See Microsoft Carbon Removal - Lessons From an
Early Corporate Purchase to learn more.
4
Climate change is a global issue whose impacts
are felt locally.
Displacing incumbent technologies and
spurring innovation needs to be supported
in all geographies to address the uneven
distribution of those impacts—both positive
and negative—around the world.
5
Small percentages of our emissions require big
efforts to address.
For example, diesel fuel accounts for less than
1 percent of Microsoft’s overall emissions.
But finding solutions to reduce reliance on
traditional diesel fuels, which power the backup
infrastructure that supports our datacenters, will
require significant innovation and investment
by those with a much greater stake and reward
than Microsoft alone. This same scenario plays
out for electrifying our fleet and transitioning to
induction cooktops.
41AppendixEcosystemsWasteWaterCarbonOverview
What’s next? 1
Develop the markets
Longer-term purchasing contracts send a
firm demand signal for developers, creating
a business case for them to help build plants.
2
Drive quality
Microsoft is dedicated to continuing being a
pioneer in addressing the climate crisis head
on. We will continue to help ensure project
quality in the market and drive for more
accurate carbon accounting.
3
Innovate in renewable energy
and carbon reduction
We expect to focus on further innovations
in renewable energy, carbon reduction, and
carbon-free materials. For example, by using
machine learning to forecast electricity load,
we can enable grid-interactive datacenter
components, such as batteries for backup power,
to participate in ancillary energy markets and
stabilize an electric grid with a higher penetration
of renewable energy sources. We’ll conduct new
research to inform the technical and business
possibilities of co-locating datacenters with
offshore wind farms and investigating the
feasibility of using supercritical carbon dioxide
(sCO2) as a coolant for immersion of servers
within the datacenter.
4
Pilot diesel-free backup power
We are innovating and piloting other backup
power sources in our datacenter regions, which
could in the future provide viable replacements
for generators. Batteries already supply shortterm
backup power needs, filling the roughly
30-second gap between a potential outage on
the grid and the time it takes to power up the
diesel generators. In the future, batteries with
a longer duration could replace the role diesel
generators play today.
5
Reduce embodied carbon
We are continually evaluating design changes
and developing new specifications to facilitate
deep embodied carbon reductions in our campus
and datacenter designs. We are analyzing both
the optimal use of conventional materials, such as
concrete and steel, and pursuing more ambitious
opportunities with emerging alternative
materials that carry significantly less embodied
carbon. We are also developing solutions to help
organizations reduce and manage emissions and
energy consumption, such as through Azure IoT
solutions for energy and sustainability.
6
Continue to invest
in carbon removal
We continue to pursue new opportunities to
fund high integrity, engineered carbon removal
projects. We are also investing in digital tools to
scale nature-based carbon removal solutions,
such as soil carbon sequestration technologies.
7
Decarbonize our supply chain
We will continue refining emission reduction
plans with suppliers and ensuring that they
have the resources they need to make these
reductions with a goal of having the aggregate
reductions meet Microsoft’s Scope 3 commitment.
We will continue to embed sustainability
into procurement processes and reset goals,
metrics, and incentives to support carbon
reduction targets.
8
Enable product carbon
comparability
In Microsoft’s commentary to the Securities
Exchange Commission climate disclosure, we
predicted, “Individual consumers will have the
ability to choose among competing products
based on relative carbon emissions, as they do
today when it comes to the nutritional content
of food products.” While many companies report
their products’ carbon footprints using wellestablished
methodologies, these footprints
are not currently comparable due to divergent,
non-standard, and proprietary data and
assumptions. Microsoft is exploring how to
enable new methodologies and standards
for comparable product labels that could be
used across industries and administered by
independent certification or regulatory bodies.
42AppendixEcosystemsWasteWaterCarbonOverview
Resources
Capacity-building tools and resources
Developed in partnership with ENGIE Impact, WSP,
and CDP to help companies, and our suppliers, report
their GHG emissions, develop clean energy strategies,
and reduce their energy-related emissions.
Find out
more here
Carbon removal program website
Microsoft’s carbon removal program webpage that
houses content about the program’s ambitions and
provides resources about our request for proposals.
Find out
more here
Criteria for high quality carbon removal
Microsoft’s minimal viable project type criteria for
procurement considerations.
Find out
more here
Carbon dioxide removal guidance
Microsoft’s request for proposals (RFP) guidance
on project requirements, rules of engagement,
and expectations.
Find out
more here
A buyer’s guide to soil carbon offsets
A Microsoft-funded independent analysis of the
soil projects on the voluntary carbon market and
assessment based on four key criteria.
Find out
more here
Microsoft is committed to sharing
our progress, challenges, learnings,
and best practices throughout our
sustainability journey.
Reducing embodied carbon in construction
A white paper with an inside look into how Microsoft
is reducing emissions during the construction of new
buildings and datacenters.
Find out
more here
Principles of Sustainable
Software Engineering
A Microsoft Learn course on the competencies
needed to define, build, and run sustainable
software applications.
Find out
more here
We are committed to becoming a carbon negative company by 2030 and helping others on their journeys.
43AppendixEcosystemsWasteWaterCarbonOverview
Water
positive
“Getting ahead of the world’s
water crisis will require a
reduction in the amount
of water used to operate
economies and societies,
as well as a transformation
in the way we manage our
water systems.”
Brad Smith, President and Vice Chair
44
Contents
Our approach 45
Getting to water positive 48
Reducing our water footprint 48
Replenishing water 50
Improving access to water 52
Driving transformation 53
Enabling systems change 55
Key trends 58
What’s next? 59
Resources 60
AppendixEcosystemsWasteWaterCarbonOverview
Our approach
A commitment
to a water
positive future
The context
The scientific consensus is clear: water security and
our capacity to safeguard sustainable access to quality
freshwater resources is increasingly at risk. There is a
global increase in water demand that follows population
growth, economic development, and changing
consumption patterns. Research by WRI projects that by
2030, there will be a 56 percent deficit in water supply
relative to demand if no actions are taken to alleviate this.
At present, about 25 percent of the global population
lives in countries that suffer from water stress, and one in
ten people lack access to safe drinking water.
We are committed to becoming a water positive
company by 2030. We will do this by continuing our
water stewardship work across our operations, building
on the steps taken to reduce the water consumption in
our datacenters and campuses over the past decade.
In addition to reductions, we aim to become water
positive through expanding access to clean water and
replenishment projects.
Our commitment: water positive by 2030
Replenishing more water
than we use by 2030
We will reduce the water intensity of our direct
operations and replenish in water-stressed regions
where we work.
Reducing water use in
datacenter operations
We will reduce water waste in our datacenter
operations by 95 percent by 2024.
Increasing access to water
We will provide more than 1.5 million people with
access to clean water and sanitation services by 2030.
Digitizing water data
We will use our technology to generate actionable
insights, increase awareness of water issues, and
optimize water replenishment.
Empowering our customers
and partners
We will continue to develop solutions to help customers
and partners understand water-related risks.
Investing in the future of water
We will work with companies around the world to drive
innovation and adoption of water technologies.
Influencing policy
We will use our voice at the local, national, and global
levels to increase water access and availability, improve
quality, and ensure the integration of water into
climate strategies.
Driving collective action
We will partner with others to drive collective action
to increase access and reduce water stress.
45Overview Carbon Water Waste Ecosystems Appendix
Our approach (continued)
Our progress
1.3M cubic meters
In FY21, Microsoft invested in replenishment
projects that are expected to generate over
1.3 million cubic meters of volumetric benefits,
bringing us to 21 replenishment projects to date
in nine water basins across the globe.
670M liters of
water benefit
Our programs with Water.org account for over
670 million liters
9
of water benefit per year in
areas facing water scarcity and climate challenges
that overlap with our business operations in
strategic locations.
Water access for
>95,000 people
Through our partnership with Water.org,
we provided more than 95,000
10
people
with access to safe water or sanitation.
116 grantees
Through AI for Earth, Microsoft has supported
116 projects that create data-driven solutions
supporting water resources monitoring, modeling,
and management centered around water.
U.S. Water Prize
In 2021, Microsoft was awarded the
U.S. Water Prize for Outstanding Private Sector
Organization for adopting our water positive
program and committing to being water
positive by 2030.
Democratizing
access to water data
Microsoft, in collaboration with BlackRock and WRI
India, supported the Wave2Web Hackathon to help
develop new datasets on water stress in emerging
markets and improve predictive modeling for better
planning of water resources and risk preparedness
in cities.
A year of progress and impact to get to water positive by 2030.
46AppendixEcosystemsWasteWaterCarbonOverview
3,038
India
Population provided
with water access in FY21
92,092
Indonesia
FY21
current
year
95,130
Water
positive
by 2030
Acompanyis
waterpositive
whenitreplenishes
morewaterthanit
consumeseachyear.
0 2M 5M5M
Water m3
FY17
FY18
FY19
FY20
FY21
Base
year
Current
year
1M 4M3M1M2M3M4M
Water consumption Water replenishment
1,912,934
3,325,664
3,945,783
3,966,639
4,477,865
96,906
331,081
1,952,710
2,020,747
0
Water Table 1
Replenishing more water than we use on our journey to become water positive by 2030
In FY21, our contracted water replenishment amounted to 45 percent of our global water consumption
across our operations.
a. Reported water replenishment volumes represent total contracted water replenishment projects for each fiscal year.
Reported water replenishment volumes may be adjusted once individual projects are completed and volumes verified.
Water Table 2
Delivering on our commitment to enable the provision of water and sanitation services to
1.5 million people in seven water-stressed countries by 2030
Our approach (continued)
In FY21, we provided 95,130 people with water access across India and Indonesia. From the program’s inception
through calendar year 2021, we have provided 242,988 people with water access in Mexico, India, and Indonesia.
a. Reported values represent data reviewed and validated by water.org.
47AppendixEcosystemsWasteWaterCarbonOverview
Getting to
water positive
To meet our commitment to being
water positive by 2030, we will reduce
our water footprint across our direct
operations, while replenishing and
increasing water access in waterstressed
regions where we work.
Reducing our water footprint
We are taking new approaches to water collection,
treatment, reuse, and reduction at our campuses and
datacenters across the globe. This includes efficiency
measures as well as fit-for-purpose water usage
design—we are focused on using the right type of
water in the right context from campus to datacenters to
device manufacturing. Key efforts include the following.
Using less, reusing more, and recycling water
across our datacenters
Microsoft is using the Smart Water Navigator, which
we developed with Ecolab, in our datacenters to
prioritize and manage incoming water quality sources
like recycled water. In San Antonio, Texas, we have
significantly reduced the datacenter’s potable water
usage, which will now be used to supply water to homes,
providing economic as well as environmental benefits.
We deployed sensors in our Quincy, Washington
datacenter location, where we’re using the data on
real-time water quality to drive operational insights
and adjustments to maintenance and water chemistry.
Across our operations, we’re testing new techniques, like
raising supply air temperatures and harvesting water
from our rooftops, to further reduce water consumption.
Using the right type of water in the right context in datacenters.
Keeping datacenters cool using air
Across our global datacenter fleet, outside air is our
primary method of cooling for an average of nine
months of the year. External temperatures and humidity
play a key role in determining when additional cooling
is required—and when required, we utilize an adiabatic
cooling system to reduce air temperature by evaporating
water in its presence. Adiabatic cooling, along with
higher temperature operations, significantly reduces
power and water usage when comparing to mechanical
water-based cooling systems. At our new datacenter
region in Arizona, which opened in June 2020, we use
zero water for cooling for more than half the year, taking
advantage of adiabatic cooling. We are also partnering
with First Solar to provide solar energy rather than
traditional electricity generation, which will reduce power
plant cooling water.
Zero
waterAt our new datacenter
region in Arizona,
we use zero water
for cooling for more
than half the year,
taking advantage of
adiabatic cooling.
48AppendixEcosystemsWasteWaterCarbonOverview
Getting to water positive (continued)
Pioneering research and implementation
of liquid immersion cooling to reduce water
In 2021, Microsoft was the first cloud provider to run
two-phased liquid immersion cooling in a production
environment, demonstrating viability for broader use
in our datacenters. We are using liquid immersion in a
production environment, which involves placing servers
in a tub of inert fluid that boils at 50°C, which removes
the heat generated by the chips, servers, and power
supplies, and condenses the fluid in coils at the top of
the rack. This “rains” back in the tank. Because of the
elevated operating temperature, this type of cooling
does not require use of evaporated water. Our latest
testing addresses the concept of overclocking, which
is to operate chip components beyond their
pre-defined voltage, thermal, and power design limits
to further improve performance. Our tests found
that some chipsets show an increased performance
by 20 percent with liquid cooling. This may also have
benefits beyond reduction of water use, as this approach
can allow for datacenter rack designs that create
increased capacity per square foot in a datacenter.
Raising the temperature while
maintaining quality
We’re investigating and piloting turning up the heat in
our datacenters. The higher server inlet temperatures
will reduce cooling hours and water use. If the pilot is
successful, we expect to be fully implemented by 2025,
which has the potential to eliminate water use for cooling
in regions like Amsterdam and Dublin, while reducing
water use in dry regions like Arizona and Wyoming.
Fit-for-purpose water design in our Hyderabad campus.
4M litersIn Hyderabad, India, we’re piloting
air-to-water generators to help
offset 4 million liters of ground
water extraction per year.
Building net zero campus in California
In 2021, our new Silicon Valley campus officially opened.
It is now operating as the first technology campus with
a net zero water certification as not a drop of water
for more than 2,000 employees, 15 acres of landscape,
and 643,000 square feet of built space will come from
municipal sources, beyond drinking fountains and sinks.
Recycling water in our campuses
Our Herzliya, Israel site’s landscaping also uses 100 percent
of the air conditioning condensate water for its irrigation
and cooling towers, resulting in an estimated savings of
over 3 million liters annually. Our LinkedIn headquarters
in California is planning to utilize municipal recycled
water for landscaping and internal plumbing, thus saving
30 million liters of potable water each year.
Testing new generation techniques
Our Herzliya, Israel site utilizes Watergen’s technology to
produce fresh drinking water from the humidity in the air,
producing an estimated 237,000 liters annually, based on
company calculations. In Hyderabad, India, we’re piloting
air-to-water generators that will capture the moisture
in humid air, purify it, and produce safe drinking water.
These generator plants will help offset 4 million liters of
ground water extraction per year, based on company
calculations, in this water-stressed region, where water
scarcity is an ongoing crisis that is expected to worsen.
Reducing water in device textiles
Microsoft uses textiles in our computer palm rests and
type covers, and the textile industry is one of the biggest
consumers of water. Each of the various manufacturing
phases, including yarn processing, greige production,
and the dyeing finish process requires a significant
amount of water. To reduce water, we removed the
dyeing process on our CLARINO fabric by switching
to a solution dye technique which reduces water
consumption by 20 percent. This is a completely solventfree,
environmentally friendly manufacturing choice that
is used in three of our products currently in production
across the HoloLens and Surface type cover lines.
49AppendixEcosystemsWasteWaterCarbonOverview
50
Getting to water positive (continued)
Replenishing water
As part of our commitment to be water positive by 2030,
we will replenish more water than we consume, focusing
on high water-stressed regions. We will achieve this goal
by investing in water projects that protect watersheds,
restore wetlands, and improve infrastructure. In addition
to generating volumetric water benefits, many projects
offer a wide range of additional co-benefits.
When sourcing water replenishment projects, we
consider contextual conditions of the watershed and
aim to invest in projects that align with site-specific
water assessments and have local stakeholder support.
We have invested in 21 projects to date in nine water
basins across the globe. In FY21, Microsoft invested in
projects that are expected to generate over 1.3 million
cubic meters of volumetric benefits. Progress towards
our commitment is made possible due to several
strategic partnerships with non-governmental
organizations, such as Bonneville Environmental
Foundation (BEF), the Water Resilience Coalition (WRC),
the Nature Conservancy, and implementation partners,
including Trout Unlimited, Ducks Unlimited, National
Audubon Society, and WaterAid. We also participate
in the California Water Action Collaborative, a network
of over 25 organizations learning together, collectively
developing projects, and advancing innovative solutions
to improve water security and resilience across California.
Reversing environmental degradation in the Sierra Nevada and Cascade mountain ranges.Reversing environmental degradation in the Sierra Nevada and Cascade mountain ranges.
1.3MIn FY21, Microsoft
invested in
replenishment projects
that are expected to
generate over 1.3 million
cubic meters of
volumetric benefits.
Given the nascent water replenishment project market,
we make investments at least a fiscal year before a
project delivers volumetric benefits. We are still able to
make estimates on volumetric benefits, just as we do with
renewable energy projects upon signing even though
the project has yet to be built. We are taking new steps
to validate these estimates. In FY21, 10 of Microsoft’s
replenishment project investments underwent a thirdparty
quantification to verify and update the initial
volumetric benefit estimates using the Volumetric Water
Benefit Accounting (VWBA) guidance. We will continue
to use the VWBA guidance to quantify volumetric water
benefits when contracting with a replenishment partner.
Many projects are already delivering volumetric,
ecosystem, and community benefits, such as
the following.
Restoring the East Creek meadow
Microsoft has invested in a project to restore the
East Creek meadow and reverse environmental
degradation caused by disconnection of the channels
in California’s Sierra Nevada and southern Cascade
Mountain ranges from the meadows and floodplains
below. September 2021 groundwater levels indicate
that the meadow is beginning to retain groundwater
during the dry season, even with reduced precipitation
and late-season contributions from snowpack runoff.
The restoration has also contributed to fire resiliency
—within two months of the Dixie fire, native species
were re-sprouting in the burned areas due to residual
soil moisture.
AppendixEcosystemsWasteWaterCarbonOverview
Getting to water positive (continued)
Groundwater recharge and water security
in Phoenix
Microsoft and Gila River Water Storage are recharging
and replenishing groundwater levels in the cities
of Goodyear and El Mirage, Arizona, to balance a
portion of Microsoft’s future water use, contributing
an estimated additional 610,000 cubic meters.
Microsoft is also collaborating with The Nature
Conservancy to support water conservation in the
Verde River Basin in Arizona through projects such as
piping irrigation ditches to efficiently water farmland
and leave more water in the Verde River.
Restoration in the Columbia Basin
Microsoft supported three water restoration projects
in the Columbia River Basin near Quincy, Washington.
One of the projects benefits the Roaring Creek by
improving habitat for fish listed under the Endangered
Species Act, including Upper Columbia Steelhead,
spring Chinook, bull trout, lamprey, and cutthroat trout.
The second project is focused on relocation of beavers
to watersheds where natural beaver dam building
helps to promote fish passage, improves water quality,
increases groundwater storage, and mitigates flooding.
The third project improves water use efficiency on
farm and irrigation delivery infrastructure to help local
agricultural producers adapt to changing growing
conditions while also supporting rivers and local fish.
Drought contingency planning with
the Colorado River Indian Tribes
Under the Drought Contingency Plan, Arizona is seeking
to help stabilize water levels in Lake Mead and reduce
the impact and severity of shortage declarations in
Nevada, Arizona, and Southern California by financially
compensating the Colorado River Indian Tribes (CRIT)
for water saved. Microsoft has contributed funds to
compensate the CRIT for their water rights to the
Colorado River through a lease for system conservation
and water supply benefits. In exchange for monetary
compensation, the CRIT have pledged to forgo irrigation
water deliveries and fallow approximately 10,000 acres
of farmland, leaving significant volumes in Lake Mead
over the next few years.
Stabilizing lake levels in Lake Mead to reduce water shortage.
We will replenish more water than
we consume, focusing on high
water-stressed regions and investing
in water projects that protect
watersheds, restore wetlands,
and improve infrastructure.
51AppendixEcosystemsWasteWaterCarbonOverview
Getting to water positive (continued)
Improving access to water
With 1.1 billion people in the world without access
to clean water, it’s not enough to simply reduce and
replenish—we need to improve people’s access to safe,
clean water. Our goal is to provide access to safe drinking
water and improved sanitation solutions for 1.5 million
people while accounting for 25 billion liters of net
positive water impact in high-stress watersheds where
we also operate, namely India, Indonesia, and Mexico,
by 2030.
Progressing towards our goal with Water.org
In 2020, we began our work with Water.org to help
people living in underserved communities gain lasting
and reliable access to safe drinking water and improved
sanitation solutions. This includes household taps
and toilets, piped connections, rainwater harvesting,
water storage, purification, and community filtration.
In FY21, we helped more than 95,000 people in India
and Indonesia
10
and expect to reach at least 840,000
people by September 2023. Nearly all the beneficiaries
are women and live below the poverty line. These
programs account for over 670 million liters of water
benefit per year in areas facing water scarcity and climate
challenges that overlap with our business operations in
strategic locations.
9
95,000Through our
partnership with
Water.org, we provided
more than 95,000 people
with access to safe
water or sanitation.
670MPrograms run through
Water.org account for
over 670 million liters
of water benefit per year.
Affordable water and sanitation loans in India for piped water in homes.
Providing safe water and
improved sanitation in India
In Rasulpur Aul Kendrapara, houses are made of thatch, mud,
and concrete, and rarely have water or sanitation connections.
Rehana and her daughter used to walk up to six hours a day to get
water for cooking, laundry, and baths from an unreliable hand-pump
managed by the government. On days it was unavailable,
they collected water from the river or purchased it from a vendor,
paying high prices for water in time and money. Families like
Rehana’s find the small water and sanitation loans offered by
Water.org’s partners in India to be affordable, practical solutions to
their family’s water and sanitation needs. Rehana learned that she
could make affordable payments to establish a water connection
and was approved for a loan to construct a piped water connection
from the municipal water line to her home. Now the family enjoys
access to safe water and improved sanitation at home.
52
Affordable water and sanitation loans in India for piped water in homes.
AppendixEcosystemsWasteWaterCarbonOverview
Driving
transformation
We believe that Microsoft’s most
important contribution to water
reduction will come not from our
own work alone, but by helping
our customers, partners, and suppliers
around the world reduce their water
footprints through our learnings
and with the power of data, AI,
and digital technology.
We are not a particularly large consumer of water today,
but we are learning from our work in our own operations.
We are taking these lessons learned, new approaches,
and innovative partnerships and bringing them to our
global customer base, where we believe we can have a
transformative impact.
As it so often does, the pathway to progress begins with
data. Water data is often segmented and siloed, both
within an organization and across multiple organizations
operating in the same watershed, which makes managing
a shared resource particularly challenging. Water data
often lacks context, meaning it is provided without an
understanding of underlying conditions in the area.
This makes it difficult for any single organization to assess
its impact on a water basin, which in turn complicates
or obscures the most impactful intervention to address
water issues in that area. In addition, water data often
suffers from discontinuities, where data collection is
interrupted due to equipment failure or lack of funding
for observational networks.
The digitization of water data is about making water data
credible, transparent, useful, and actionable. It includes
the Internet of Things (IoT), cloud platforms, business
intelligence, and AI. We are bringing new solutions to
organizations to better manage water consumption
and risk.
We are digitizing water data to make it credible, transparent, useful, and actionable.
Product
Azure IoT Central government
application templates
Water Consumption Monitoring application template
With this tool, available today, organizations can
remotely monitor and control water flow and valve
pressure, manage alerts, and set up device commands
to reduce water costs and waste.
Download application
template here
Water Quality Monitoring application template
Organizations need to also understand the quality of
their water, a key stressor on water availability. With this
solution, organizations can monitor water quality to
improve health outcomes and environmental impact.
Download application
template here
Azure-based risk management product
Smart Water Navigator
Developed by Ecolab and running on Azure,
organizations can identify water risks, set meaningful
context-based water goals, and leverage response tools
to help companies implement sustainable water practices
with this free platform from Ecolab.
53Overview Carbon Water Waste Ecosystems Appendix
Driving
transformation (continued)
Customers and partners
Assessing global flood risk and water reserves
Deltares, a world leader in water and subsurface with
expertise in flood risk forecasting and ecosystem
monitoring, used Azure and the Microsoft Planetary
Computer to generate two global multi-decade datasets:
a Global Flood Risk dataset to assess the risk of flooding,
in particular the impact in coastal areas subject to sea
level rise, and a Global Water Reservoirs dataset to
determine water availability for up to 3,000 reservoirs
around the world for both drinking water and hydro
power planning. Both datasets help organizations
to relate changing water conditions to humanity,
infrastructure, and environments.
Reducing water usage in facilities with
the cloud
Enova, a joint venture between Majid Al Futtaim
and Veolia, is an integrated energy and facilities
management provider offering comprehensive services
and performance-based solutions to its clients to help
achieve their financial, operational, and environmental
targets. Powered by over 4,500 employees and a strong,
scalable, and secure cloud infrastructure on Azure, Enova
has achieved total savings of 320 million kWh of energy,
5 million cubic meters of water, and 210,000 tons of CO2
emissions. In 2021, Enova adopted a new business model
involving ICONICS and other tools supported by Azure
cloud services and over 320 customized fault and ECM
rules. Covering 28 medium to large sites, this resulted
in an additional 2 percent of energy savings and 17–25
percent improvement in staff efficiency.
8
Enabling modeling of global water supply
and demand
Microsoft is working with WRI to provide partners with
access to the latest Coupled Model Intercomparison
Project Phase 6 (CMIP6) global climate projections, as
well as socioeconomic development projections based
on IPCC scenarios, on Microsoft Azure. Partners are now
able to model global water supply and demand with
CMIP6 data and scenarios for the first time.
Forecasting real-time water availability
in reservoirs
With WRI and BlackRock, Microsoft sponsored a global
hackathon challenge, Wave2Web. The organizations
worked together to develop new datasets on water
stress in emerging markets, inviting students and young
professionals to develop predictive modeling to forecast
water availability in reservoirs near Bengaluru, India.
The Wave2Web hackathon included 2,130 participants
across 293 teams globally. Twenty-five shortlisted teams
received hands-on support to develop unique, forwardlooking
solutions. The three winners showcased their
prototypes in front of state and national stakeholders
at an online town hall conducted in October 2021.
The Commissioner of the Karnataka State Natural
Disaster Management Center plans to continue
working with the winning teams to explore applications
of the prototypes as well as other opportunities for
collaboration to solve the growing water challenges
faced by Bengaluru.
Smart metering with Anglian Water is saving almost 3 million liters of water every day.
Water smart metering with
the cloud and AI
Anglian Water supplies more than 6 million customers
with water and water recycling services in the UK. It is
working to efficiently manage water supplies and raise
customer awareness of water conservation. A key part
of its strategy is smart metering, which it is rolling
out across its entire region by 2030. Using Azure,
Anglian built a robust system for customer-side smart
metering, as well as monitoring and analysis of its
network. It also uses AI to understand the behavior of
reservoirs through each day, each season, and varying
meteorological conditions. Since the smart metering
program went live, customers have been able to find
and fix around 40,000 leaks in their homes, saving
almost 3 million liters of water every day.
8
54AppendixEcosystemsWasteWaterCarbonOverview
Enabling
systems change
We are focused on new ways to harness
the power of technology, partnerships,
investments, and policy to drive impact
at scale and pace to help the world
more effectively address water
availability and accessibility.
To reach a water positive future, the world will need new
partnerships, solutions, and markets. That is why we go
beyond our operations and even our products to make
direct investments in the future of water, from R&D to
actual funding investments in promising technologies
that have the potential to scale rapidly and globally.
Research and development
Researchers at Microsoft tackle critical challenges that
will shape the future of the world and the company.
Given the significance of sustainability challenges for
our global future, research teams around the world are
developing new technologies and approaches to ensure
water efficiency.
Azure Verified Telemetry for IoT
Our research on Dependable IoT is enabling water
positivity for Microsoft and other companies by
developing the capability to ensure the accuracy of
sensors used to monitor water leaks, quality, and efficient
usage. With the incorporation of this capability into
Azure Verified Telemetry for IoT, we are partnering with
FluxGen, a sustainability startup in India that develops
AI and IoT-based water management solutions to make
industries water positive. The partnership is through the
Microsoft-Accenture Amplify program and Microsoft
Research India’s Center for Societal Impact through
Cloud and AI.
Funding innovation via CIF
The Climate Innovation Fund (CIF) invests in the
development and deployment of new technologies,
processes, and production changes that can improve
the condition and sustainability of our water resources.
Our investment into Emerald Technology Ventures’
Global Water Impact Fund invested in Sofi Filtration is
currently serving early to expansion-stage companies
globally to drive critical innovation and its adoption in
the water space.
To reach a water positive future, the world will need new partnerships, solutions, and markets.
55AppendixEcosystemsWasteWaterCarbonOverview
Enabling systems change (continued)
Investing in AI
Through our AI for Earth program, Microsoft is putting
AI tools into the hands of individuals and organizations
working on the frontlines of environmental challenges,
including water. To date, 116 AI for Earth grantees have
worked on water-related projects.
Remote sensing to assess agricultural
water demand
Government agencies in Egypt face difficult decisions
when allocating water for agriculture and civilian use.
To help agencies, the Egyptian government developed
a proof of concept solution that uses satellite image
analysis deep learning to determine crop type and land
area boundaries of smallholder farms. The intelligent
visualization using ArcGIS detects field boundaries,
identifies crops, and provides water demand forecast
estimates for decision makers that results in more
accurate allocations for sustainable agriculture and fair
water distribution for citizens.
AI and satellite imagery to track forest-related
water availability
Microsoft supported a forest and water management
project by Conservation Science Partners by providing
resources around AI, machine learning, and cloud
computing on the Microsoft Azure platform. Using Azure,
Conservation Science Partners aggregates and analyzes
satellite imagery at high resolutions to better understand
how the forest cover across the western United States
changes from forest disturbance events and how this
influences water supply records. By linking the forest data to
water flow rate data records from before and after a forest
disturbance, an analysis can provide insights for conservation
planning and adapting forest and water management to
future climate change impacts. As a result, local communities,
regional organizations, and the federal government can
better manage and protect these vital resources.
116To date, 116 AI for Earth
grantees have worked on
water-related projects.
Providing scientifically informed estimates of the impact of extreme drought events on drinking water availability.
Machine learning to predict
regional water shortages
Recognizing that lower income and small communities
often face the largest barriers to safe and reliable
drinking water, Microsoft provided a grant to the
Leadership Counsel for Justice and Accountability
to support their work around secure water supplies.
The Leadership Counsel will assimilate data from
disparate sources, using Azure resources to host
and deploy machine learning models and create a
dashboard that people can interact with on a server.
The dashboard will provide regulators, advocacy
groups, and the public with scientifically informed
estimates of the impact of extreme drought events on
drinking water availability. This contribution also allows
the Leadership Counsel to engage in wider community
outreach efforts, advocate for policy efforts that will
protect well water levels, and inform residents about the
potential impact of water conservation policy efforts.
56
Providing scientifically informed estimates of the impact of extreme drought events on drinking water availability.
AppendixEcosystemsWasteWaterCarbonOverview
57
Enabling systems change (continued)
Driving collective action
We partner with like-minded companies and leading
scientific organizations to develop and deliver research,
guidance, and implementation roadmaps that enable all
businesses to solve water challenges.
CEO Water Mandate and Water
Resilience Coalition
Acknowledging the importance of collective action and
collaboration to solve shared water challenges, Microsoft
has endorsed the United Nations Global Compact CEO
Water Mandate, an initiative in co-Secretariat with the
Pacific Institute, since 2018. In 2020, Microsoft and six
other companies, together with the UN Global Compact
CEO Water Mandate, spearheaded the establishment of
the industry-driven Water Resilience Coalition (WRC).
Microsoft serves as a Coalition leader and has pledged
its commitment to collective action, net positive water
impact, resilient value chain, and global leadership.
We are committed to working with the Water Resilience
Coalition and its more than 30 members to make
progress against the WRC’s 2030 roadmap for collective
action. Microsoft is also advancing the development of
tools and resources to enable companies to step forward
by assessing and improving their water stewardship
actions in partnership with the CEO Water Mandate.
Water Action Hub Platform 4.0 was first presented during
the 2021 World Water Week, was developed by the CEO
Water Mandate and made possible with support from
Microsoft. This latest version of the hub connects more
than 1,500 projects with over 1,000 partner organizations
worldwide. It also helps direct users to water tools by
Ecolab, WWF, WRI, and other leading organizations.
Nature-Based Solutions Tool is a web-based
tool developed to serve as a key starting point for
organizations looking to invest in nature-based solutions
(NBS), and for those wishing to learn more about benefit
identification and accounting. The tool was developed
based on and in accordance with the published
Benefit Accounting of Nature-Based Solutions for
Watersheds Guide.
California Water Action Collaborative
Convened and facilitated by Ag Innovations, the
California Water Action Collaborative (CWAC) is a
network for diverse stakeholders to come together
and pursue collective action projects that will improve
California’s water resilience for people, business,
agriculture, and nature.
1,500The Water Action Hub
platform connects 1,500
projects with 1,000 partner
organizations worldwide.
Advocating for water
Governments play a fundamental role in ensuring the
availability of safe and clean drinking water, maintaining
and expanding water infrastructure, protecting critical
water ecosystems, and responding to water crises. As a
leading company committed to using its voice for policy,
Microsoft has engaged in the following activities.
Promoting US water infrastructure
and resilience
Microsoft advocated for clean energy and environmental
provisions in the US Infrastructure Investment and Jobs
Act, which commits over $8 billion for western water
infrastructure and significant funding for water-related
and other resilience efforts.
Supporting WaterEurope
In 2020, Microsoft joined WaterEurope, the leading
association in Europe focused on technology and
innovation aspects of water, with a focus on digital
water. We have called for the inclusion of water-related
topics in EU polices, such as water infrastructure into
the COVID-19 recovery packages.
Governments play a key role in ensuring the availability of safe and clean water.
$8BThe US Infrastructure
Investment and Jobs
Act commits over
$8 billion for western
water infrastructure and
significant funding for
water-related and other
resilience efforts.
Overview Carbon Water Waste Ecosystems Appendix
Key trends
2021 was a year of progress and learning for Microsoft on our journey to water positive.
1
Water requires a collective approach.
Companies will not be successful in managing
water stress in regions where we operate if we
try to tackle challenges independently. It will be
vital to partner with a wide range of stakeholders,
including NGOs, governments, customers, and
competitors—particularly in high-stress locations
with a limited supply of replenishment projects.
2
Replenishment is more than
a procurement exercise.
Project oversight and monitoring of projects
with multi-year benefits, and check-ins with
implementation partners are all important. It’s
also necessary to validate the total volumetric
benefit, additional co-benefits, and project
duration through third-party quantification.
Cultivating credible partners to identify the right
project type for each unique location is critical,
particularly for locations with limited supply of
shelf-ready projects.
3
Better water data drives action.
Utility bills only provide some of the information
companies need to truly understand and
manage their risk and reduce their water use
and the data typically does not arrive for months
after the water was used. By installing sensors
across our datacenters, we have been able to
track our water use in real time, allowing us
to more effectively monitor our reductions
and identify opportunities for increased water
efficiency. As we improve the quality of data
across our operations, we have learned that the
true cost of water is not aligned with its true
value. This misalignment makes it challenging
for companies to make the business case for
water-related investments. It is something we
are grappling with and will continue to explore
across our operations.
58AppendixEcosystemsWasteWaterCarbonOverview
What’s next? 1
Replenish more water than
we consume by 2030
We will continue to make progress against
our 2030 replenishment commitment.
We have prioritized our investments in highstress
locations where we operate and work
with partners to identify the right type of
replenishment projects that align with the unique
challenges in each location. We will continue to
prioritize opportunities to partner with other
stakeholders, including companies
that operate in the same locations.
2
Enable access to drinking water
and sanitation
We will continue to work with Water.org to make
progress against our accessibility commitment,
providing 1.5 million people with access to
clean water by 2030. Our support thus far has
focused on Brazil, India, Indonesia, and Mexico,
and will expand to include China, Malaysia,
and South Africa. We will continue to explore
water, sanitation, and hygiene (WASH) solutions
that will provide people across the globe with
access to clean water and continue to identify
opportunities to implement them.
3
Invest in partnerships
We will continue to invest in new and existing
partnerships that will enable Microsoft to make
progress against our commitments and help
protect water resources for future generations.
Given the collective approach required to solve
shared water challenges, we will continue to
build on partnerships like the Water Resilience
Coalition (WRC) that bring companies together
to pool funding and invest in solutions in
locations with extreme water stress. We will also
continue to support investments through our AI
for Earth fund that strengthen water data and
drive outcomes.
4
Increase water efficiencies across
our operations and identify
innovative solutions
To drive water use reductions in the short and
long term, increasing efficiency is critical and
it must be paired with innovation to ensure
businesses can continue to operate in an
unpredictable future with increasing water
challenges. As we identify innovative approaches
that work, we look forward to scaling these within
Microsoft and sharing them outside of our four
walls to further reduce pressure on the shared
water resources we depend on.
5
Evaluate water impacts beyond
our operations
We recognize that water is a challenge not
just across our operational footprint, but
also across our value chain. We will continue
to explore ways we can support suppliers in
understanding and managing their water risks.
We also recognize that water and energy are
interlinked. Energy is required to pump and
transport water and similarly water is required
to produce electricity. We will continue to
strengthen our understanding of the ways
our energy procurement decisions can affect
water resources.
6
Identify technology adoption
opportunities for water
We will use the investment from our Climate
Innovation Fund into Emerald Technology
Ventures to identify technology adoption
opportunities for emerging water technologies
that can help Microsoft achieve our water
positive commitment and support our customers.
59AppendixEcosystemsWasteWaterCarbonOverview
Resources
How Microsoft plans to become water
positive by 2030 video
Get inspired by our strategy.
Find out
more here
Water Action Hub 4.0
Identify organizations to partner with in specific
basins and use a wide range of tools and case studies.
A new tool allows companies to evaluate their water
management maturity and compare progress
against peers.
Find out
more here
Volumetric Water Benefit Accounting
(VWBA)
This guidance document provides corporate water
stewardship practitioners with a standardized approach
and set of indicators to quantify and communicate
the volumetric water benefits and complementary
indicators of water stewardship activities.
Find out
more here
Water Risk Monetizer
Use this free tool, built by Microsoft and Ecolab,
to assess the true value of water and risk exposure
you face.
Find out
more here
Microsoft is committed to sharing
our progress, challenges, learnings,
and best practices throughout our
sustainability journey.
WRI Aqueduct Tool
Use this tool to understand the local water stress
and scarcity concerns where you operate.
Find out
more here
Water quality monitoring tutorial
Learn how to create a water quality
monitoring application in Azure IoT.
Find out
more here
Water consumption monitoring tutorial
Learn how to create a water consumption
monitoring application in Azure IoT.
Find out
more here
We are committed to becoming a water positive company by 2030 and helping other companies on their journeys.
60AppendixEcosystemsWasteWaterCarbonOverview
Zero waste “We hope that our circular
economy investments and
approaches will inspire the
broader sector in the same
way as our carbon negative
goal. Everyone must do
their part.”
Dr. Lucas Joppa, Chief Environmental Officer
Contents
Our approach 62
Getting to zero waste 65
Driving transformation 69
Enabling systems change 71
Key trends 74
What’s next? 75
Resources 77
61AppendixEcosystemsWasteWaterCarbonOverview
Our approach
Our commitment
to a zero
waste future
The context
Every year, people consume 100 billion tons of materials,
and in 2020 only 8.6 percent of those materials were
cycled back into the economy after use, according to the
2021 Circularity Gap Report. Linear systems and existing
infrastructure are not adequate to maintain, collect, and
redistribute materials effectively for a global circular
economy. As a result, waste, including plastics, e-waste,
and food waste, pollutes our land, clogs our waterways,
depletes natural resources, and contaminates the air
we breathe.
We recognize the urgent need to protect the world’s
biodiversity and ecosystems, give equal access to a safe
and healthy environment, reduce carbon emissions
associated with the creation and end-of-life of these
materials, and meet the needs of a growing population.
As a company that makes and manufactures devices,
as well as uses manufactured goods in our campuses,
datacenters, and operations, we have an obligation to
responsibly source materials and an opportunity to build
a more circular approach into our work and the world.
To reach our commitment to become a zero waste
company by 2030, we are taking an increasingly circular
approach to materials management to reduce waste
and carbon emissions. Our strategy goes beyond waste
diversion as we work across our value chain beginning
with design and material selection. Wherever possible,
we reduce the amount of materials needed.
We responsibly source materials for our operations,
products, and packaging. We are increasing the use of
recycled content, selecting recyclable or compostable
materials, reducing hazardous substances, and designing
out waste. We keep products and materials in use longer
through reuse, repair, and recycling programs.
Our commitment: zero waste by 2030 across our
direct waste footprint
Increasing reuse of servers and
components through Circular Centers
By 2025, 90 percent of servers and components
within our regional datacenter networks will
be reused.
Eliminating single-use plastic
By 2025, we will eliminate single-use plastics in
all Microsoft primary product packaging and all
IT asset packaging in our datacenters.
Making fully recyclable products
and packaging
We will design Surface devices, Xbox products and
accessories, and all Microsoft product packaging to
be 100 percent recyclable in OECD countries by 2030.
Driving to zero waste operations
We will achieve 90 percent diversion of operational
waste at datacenters and campuses and 75 percent
diversion for all construction and deconstruction
projects by 2030.
Transforming waste accounting
We will continue to improve waste data accounting
to ensure accuracy, auditability, and reporting.
Investing in the future of circularity
We will partner with companies around the world
to drive circular economy innovation and adoption
of technologies to reduce waste and reuse materials
and products.
62AppendixEcosystemsWasteWaterCarbonOverview
Our progress
Circular Centers
We have planned five Circular Centers, with
Amsterdam open, construction underway
in Boydton, Virginia, and three more to be
added in Dublin, Chicago, and Singapore
in 2022. This has projected savings of
$100 million per year once fully scaled and
will enable 90 percent reuse by 2025.
>15,200
metric tons
In FY21, we diverted more than 15,200 metric
tons of solid waste otherwise headed to
landfills and incinerators across our direct
operational footprint.
Transformed
waste accounting
We transformed our waste accounting using
Microsoft technology, including PowerApps,
Dynamics 365, and Power BI, increasing our
collection of actual waste data and providing
greater visibility into waste types.
18% reduction
We reduced single-use plastics in our
Microsoft product packaging by 18 percent
or from 5.7 percent to 4.7 percent by weight
(on average) of plastic per package in FY21.
>90% recyclable
We achieved a 97 percent recyclable
Xbox Series X and S, and a 93 percent
recyclable metal Surface Laptop 4,
in Organization for Economic Cooperation
and Development (OECD) countries per
the UL methodology ECVP 2789.
Recycled waste
materials
We introduced two new accessories that are
made in part from recycled waste materials:
several new Xbox Wireless Controllers, built
using over 30 percent post-consumer recycled
(PCR) materials; and the Ocean Plastic Mouse,
which has a plastic shell made with 20 percent
recycled ocean plastic.
Zero Waste
datacenters
Four datacenters are Zero Waste certified,
with new certifications for the San Antonio,
Texas and Quincy, Washington datacenters
and renewed certifications for our Boydton,
Virginia and Dublin, Ireland locations.
Zero Waste
campus
roadmaps
Eleven campuses now have customized
roadmaps to achieve zero waste by 2030.
Our Puget Sound campus has been Zero
Waste certified since 2016.
Invested in
Rheaply
We invested in circular economy startup
Rheaply to help companies measure
carbon emissions savings from reuse
and fuel the circular economy.
A year of progress and impact to get to zero waste by 2030.
Our approach (continued)
63AppendixEcosystemsWasteWaterCarbonOverview
Our approach (continued)
Waste Table 1
Working towards our target to divert 90 percent of operational solid waste from landfills and
incinerators across our owned datacenters and campuses
In FY21, our diversion rate remained nearly flat from FY20, and we diverted more than 12,600 metric tons of waste
from being landfilled or incinerated. Employees working from home was one of the main drivers of the decrease
of over 44.4 percent in total waste generated.
a. Waste generation values and classifications have been updated for FY19 and FY20 to be
consistent with data collection and estimation methodology improvements established in
FY21. As we continue improving our waste accounting, our reported values may change.
Waste Table 2
Ensuring 90 percent of servers and components for all cloud hardware will be reused by 2025
The main drivers of our reuse percentage are the functional equipment that is remarketed (either whole or
parted-out), or materials that could be reused after the recycling process. In FY21, a reduction in the volume
of decommissioned assets and increase in the volume of recyclable material in the mix contributed to the
overall reduction in the reuse percentage. Expansion of our Circular Centers program and investments in systems
and policy changes will further enable us to achieve our 90 percent reuse target of servers and components by 2025.
0% 20% 40% 60% 80% 100%
Target
90%
Reuse rate
Base
year
Current
year
FY19
85%
87%
76%FY21
FY20
Diversion rate
77.7%
79.4%
78.4%
FY19
0% 20% 40% 60% 80% 100%
Target
90%
FY21
FY20
Base
year
Current
year
A B C E
A B C D E
A B C D E
D
Diverted:
Not diverted:
ReusedA Recycled Composted
LandfilledIncineratedD
B C
E
Reused
a. Our program and supplier data quality has consistently improved over the years. Access to more
accurate data has helped us update our methodology for percentage reuse calculation. For consistency,
previously reported years have been updated to reflect latest methodology applied to FY21.
64AppendixEcosystemsWasteWaterCarbonOverview
Getting to
zero waste
To meet our commitment to being
zero waste by 2030, we are reducing,
reusing, and diverting waste in our
campuses and datacenters. We are
also focused on keeping our products
and packaging in use longer by
designing for circularity.
Campuses and datacenters
Our operations are a considerable part of our waste
footprint. Getting to zero waste requires more ambitious
efforts to reduce as much waste as we can, reuse
products to extend use life, and recycle or compost
wherever possible, as well as thinking through everything
from visitor badges to server racks with circularity
in mind.
Building a circular cloud
At Microsoft, we have taken a first-of-a-kind approach
towards designing and implementing circularity into
our cloud, aligning our end-of-life dispositioning
processes with an integrated plan across the entire
supply chain. It starts with sustainable design and
responsible sourcing of an asset. We use our assets as
long as we can effectively, then reuse what we can to
extend hardware life. After decommissioning, we move
towards a diversified approach, ensuring that assets are
dispositioned to optimize value, security, compliance,
and sustainability. Over the past year, we engaged new
suppliers who are able to remanufacture assets and
components, effectively enabling new lifecycles for our
assets. We have successfully demonstrated takeback/
buyback models with our original asset suppliers, closing
the loop on assets and enabling suppliers to repurpose or
reuse assets and components, returning higher financial
benefits as well as significant sustainability outcomes for
carbon emissions reduction and material recovery.
We have built Circular Centers inside our large datacenter
campuses to intercept and process all decommissioned
assets. These include an intelligent disposition and
routing system using Azure SQL, Power BI, and
Embedded Power Apps integrated with Dynamics
365, which determines the optimal route for every
component, creating a plan for every part, extending
useful lifecycles well beyond the datacenter, and
engaging our upstream and downstream suppliers.
Reusing datacenter hardware via Circular Centers.
The Circular Centers are also a significant contributor
to our spares program, using harvested components
from decommissioned assets to repair cloud hardware.
Increasingly, such approaches are creating more value
and enabling greater resilience across our supply chain.
Our circular cloud will enable 90 percent reuse of
datacenter hardware by 2025, significantly contributing
to our goal of achieving zero waste datacenters by 2030
and goal of more than 50 percent emissions reduction
by 2030.
Reusing cloud hardware via Circular Centers
A critical piece of achieving our zero waste goal is
managing e-waste from our growing datacenters.
Last year, we piloted a new approach to asset reuse
by building a Circular Center within our Amsterdam
datacenter campus, which represents 7 percent of our
server capacity globally. We process decommissioned
cloud hardware to service strategic routes, secondary
markets, and suppliers, using intelligent routing software
in combination with Dynamics 365.
90%Our circular cloud will
enable 90 percent reuse
of datacenter hardware
by 2025.
65Overview Carbon Water Waste Ecosystems Appendix
66
Getting to zero waste (continued)
Over the past year, our Amsterdam Circular Center model
has achieved 83 percent reuse and 17 percent recycling
of cloud hardware. Based on the success of the pilot,
we’re expanding to five additional campuses in the US
(Boydton, Chicago, Quincy), EMEA (Dublin), and APAC
(Singapore) regions, and extending this model to most
of our cloud computing assets. This program should
achieve 90 percent reuse by 2025 with projected savings
of approximately $100 million each year, once scaled.
We also seized opportunities to become more resilient,
build better ties with communities, and increase
collaboration with upstream and downstream partners.
We’re bridging the skills divide in our datacenter
communities by supporting technical training programs
at community colleges, vocational schools, and
other education institutions. This work depends on
decommissioned and excess datacenter equipment
to facilitate the “hands-on” labs called Datacenter
Academies in datacenter communities.
Zero waste datacenters
Microsoft has a goal to achieve 90 percent diversion of
datacenter operational waste by 2030. To reach this goal,
we’re working closely with our waste haulers to optimize
waste diversion programs across our global datacenter
portfolio. We’re also partnering with third-party industry
experts to investigate options for hard-to-recycle
materials, such as air filters used in our datacenters.
Exploring innovative partnerships and solutions to
reduce waste and transition to a circular economy are
key strategies for achieving our 2030 goal. In FY21, we
achieved Zero Waste certifications for our San Antonio,
Texas and Quincy, Washington datacenters and renewed
certifications for our Boydton, Virginia and Dublin,
Ireland locations.
75%Our goal is 75 percent
construction and
deconstruction waste
diversion for all projects.
90%Our goal is
90 percent waste
diversion for campus
projects over 75,000
square feet.
Zero waste campuses
We’ve created a roadmap for key zero waste initiatives for
each campus and committed to Zero Waste certifications
by 2030 for all Microsoft campuses. LinkedIn’s new
campus in Omaha opened in 2021 with a focus on zero
waste, which led to the team utilizing reclaimed wood
wherever possible, including tabletops, lockers, and
stairs. 52 percent of the wood on the project is reclaimed
and the remaining 48 percent is FSC certified.
Construction waste diversion
Microsoft has a goal of 75 percent construction waste
diversion for all projects and 90 percent for campus
projects over 75,000 square feet. To reach these goals,
Microsoft and LinkedIn are refining RFIs for vendors,
standardizing waste tracking and reporting, and
establishing a decommissioning partner to ensure that
our used furniture and materials are reused. Our Puget
Sound campus modernization project included
deconstructing 12 existing buildings.
We found multiple reuse opportunities, including using
concrete waste for temporary roads and fill for the new
campus, and recycling ceiling and carpet tiles into new
tiles. Our Puget Sound project is currently achieving over
90 percent diversion.
Reducing waste in campuses
Last year, we began the rollout of recyclable paper visitor
badges to Microsoft sites globally, which will help avoid
seven tons of plastic waste annually. Additionally, we’re
establishing new programs to reduce food waste, other
single-use plastics, and virgin finite materials. Across Asia,
sites like Singapore are utilizing sustainable meal boxes
to cut down on waste generation. Similarly in Japan,
a new reusable cup initiative launched in July 2020 has
completely phased out disposable cups and is estimated
to potentially save 960,000 paper cups annually.
Our Istanbul site is using solar powered compost tanks
to reduce waste by 1,000 kg each month.
Our Puget Sound modernization project is currently achieving over 90 percent construction waste diversion.
AppendixEcosystemsWasteWaterCarbonOverview
Getting to zero waste (continued)
Devices
Zero waste for our devices and packaging means taking a
circular economy approach to design out waste and keep
materials in use longer. We are extending the lifespan of
our devices through programs like “Design for Repair”;
we are designing our devices and packaging to use fewer
materials and to be increasingly recyclable; and we are
supporting reuse, repair, refurbishment, and recycling
infrastructure to ensure that Microsoft devices are kept in
use longer. We’re also increasing use of recycled material
in our own devices, accessories, and packaging.
Shifting to recycled materials
Ocean plastics
In October 2021, we launched the Ocean Plastic Mouse
which has a shell made with 20 percent recycled ocean
plastic, the first consumer electronics application of this
material. Going beyond just ocean-bound plastic, which
is plastic that is collected within 50 km from shorelines,
each mouse contains resin made from recycled
water bottles taken directly out of oceans, beaches,
and waterways.
The launch of the Ocean Plastic Mouse is a small step on
our longer journey to use innovative recycled materials.
The resin is now available for others to use in their
own products to help address the global challenge of
ocean plastic.
Post-consumer recycled plastic
Over the past year, we have used more post-consumer
recycled (PCR) plastics in our products, including Surface
power supply units, Surface devices, Xbox consoles and
controllers, and PC accessories.
With the new Electric Volt and Daystrike Camo Special
Edition controllers, we incorporated 30 percent PCR
resins into the external housing and 50 percent PCR
in the internal midframe for the first time in any Xbox
hardware. Following in their footsteps came the Aqua
Shift controller, four variations of the Space Jam New
Legacy controllers, and our Xbox Design Lab series of
controllers. These controllers contain a portion of resins
made from recycled materials like automotive headlight
covers, plastic water jugs, and CDs. Our testing shows
the materials provide the same controller durability and
performance gamers have come to expect. With the
re-launch of our Xbox Design Labs, we have incorporated
the same PCR resins into 75 percent of all Xbox Design
Lab controllers.
Starting in late 2021, Xbox Series S became our first
console to incorporate PCR resins into the manufacturing
of the body and various internal components. To date,
we have incorporated approximately 28 percent PCR
into the product’s overall design without compromising
quality or durability. We are now investigating ways
to incorporate more PCR into the design along with
reducing wall thickness to utilize less material overall.
Zero waste for our devices and
packaging means taking a circular
economy approach to design
out waste and keep materials
in use longer.
Post-industrial recycled materials
We are developing opportunities to reuse manufacturing
scrap in aluminum production, allowing us to use lowercarbon,
100 percent post-industrial recycled closed loop
aluminum for future Surface computer housings. For our
neodymium magnets, a rare earth material, we are
also exploring post-industrial scrap as a manufacturing
feedstock, which would enable us to produce 100 percent
recycled neodymium in magnets for future products.
Repurposed inventory
Textiles at Microsoft are normally used on Surface
palm rests and type covers. However, given the unique
challenge of the COVID-19 pandemic, we experimented
with scrap Alcantara fabric and repurposed it into
a product engineered to be a reusable, premium,
and comfortable three-layer face covering for
Microsoft employees.
The Ocean Plastic Mouse is the first consumer electronics application of recycled ocean plastic.
67AppendixEcosystemsWasteWaterCarbonOverview
Reducing waste in production
Traditionally, many materials used in the production of
devices are made using industry-standard computer
numerical control (CNC) manufacturing. With CNC,
the shape of the product component is cut out of a
large block of raw materials after which the excess is
discarded. To reduce waste in production, we have
started to introduce material “stamping” techniques in
our manufacturing which instead mold the raw materials
to the desired end shape. For our new Surface Laptop
Studio, stamping reduced our manufacturing aluminum
scrap rate for the product’s base by at least 25 percent.
Enabling repair
Repairability and serviceability can extend the lifespan of
our devices. In 2021, our Design for Repair engineering
program helped launch the Surface Pro 8, the Surface
Laptop Studio, and Surface Laptop SE, which are
considered to be some of the most repairable devices in
their product lines with replaceable displays, batteries,
keyboards, and more. We have also established a
growing Authorized Service Provider (ASP) network to
expand customer repairs across countries including the
United States, Canada, Australia, Germany, and France.
We recently partnered with iFixit to offer service tools
for Surface devices to iFixit Pro independent repairers,
Microsoft Authorized Service Providers, Microsoft
Experience Centers, and Microsoft Commercial
customers which can be purchased directly from
iFixit. Our goal is to continue to expand safe, secure,
and sustainable repair options for our Surface and
Xbox devices.
Microsoft has also committed to hiring an independent
consultant to conduct a study on the sustainability
benefits of repairable Surface and Xbox devices,
including impacts on carbon emissions and waste.
Microsoft will publicly post a summary of our findings
on our website by May 2022.
Designing for recyclability
Sustainable packaging
As we make progress on our 100 percent recyclable
packaging goal for all devices by 2030, our Ocean Plastic
Mouse and new Surface Slim Pen, available in 2021, are
the first of our products to ship in 100 percent recyclable
and plastic-free packaging. The Ocean Plastic Mouse
packaging is comprised of 20 percent wood fiber, which is
sustainably forested, and 80 percent Bagasse fiber, a fastgrowing
and highly regenerative bio-renewable material.
The packaging for our holiday 2021 Surface products—
such as Surface Duo 2 and Surface Pro 8—are 99 percent
recyclable on average. And, starting with our Surface
Laptop 4 packaging launched in April 2021, all of our new
packaging is made with 100 percent sustainably forested
content as certified by the Forest Stewardship Council
(FSC). We also eliminated a single-use plastic product,
converting our Xbox gift cards from plastic to paperboard,
reducing over 500,000 kg of plastic annually.
Recyclable devices
Driven in large part by both materials selection and
designing for disassembly—a natural byproduct of
designing for repair—we produced a Surface Laptop
4 (metal version) that is 93 percent recyclable in OECD
countries by UL standard ECVP 2789. Our Xbox Series X and
S were also found to be 97 percent recyclable as a part of
Microsoft expanding its recyclability commitment to also
include Xbox and Xbox accessories.
Complex flame retardants, additives, and polymer grades
used in consumer electronics make recycling of many
plastics at end-of-life difficult. Microsoft is collaborating
with suppliers intheindustrytoexploreaclosedloopsupply
chain for these difficult-to-recycle materials. Using end-oflife
plastic material from Xbox consoles, PC accessories, and
more, we’ve created a new closed-loop recycled resin that
is being evaluated for use in upcoming products.
Responsible end-of-life
We have focused on enabling responsible endof-life
with our devices, processes, and materials.
To ensure products are kept in use longer, Microsoft
and our partners work to repurpose or recycle used
devices through several programs while encouraging
consumers to engage with recycling programs in
their own communities. Examples include Microsoft’s
Devices Trade-In Program, our Microsoft Authorized
Refurbisher Program (MAR), and our voluntary mailback
recycling program.
100%Packaging for Ocean Plastic Mouse and
Surface Slim Pen are 100 percent recyclable.
500,000 kgWe eliminated a single-use plastic
product, reducing over 500,000 kg
of plastic annually.
75%of all Xbox Design Lab controllers now
utilize post-consumer recycled plastic.
Getting to zero waste (continued)
68AppendixEcosystemsWasteWaterCarbonOverview
Driving
transformation
We believe that Microsoft’s most
important contribution to waste
reduction will come not from our
own work alone, but by helping our
customers, partners, and suppliers
around the world reduce their waste
footprints through our learnings
and with the power of data, AI, and
digital technology.
Implementing a circular model that minimizes waste
requires interventions up and down the value chain—
innovative design, materials, service business models,
reuse and redistribution processes, collection, processing,
and more.
To achieve multiple uses for a material, many of these
levers need to be used at once and require coordination
with a diverse set of stakeholders. Technology can play a
role in bringing data transparency of material flows and
connectivity for business and consumer engagements.
We believe that Microsoft’s most important contribution
to waste reduction will not come from our own work
alone, but by helping our customers, partners, and
suppliers around the world reduce their waste footprint
through our learning and with the power of data, AI,
and digital technology.
That said, our own operations are our best laboratory
for innovation. In FY21, we invested to digitize waste
data across the company and identified opportunities to
improve data collection. We used Microsoft technology
to track and report on materials and waste, developing
PowerApps for facility managers, APIs to directly connect
with recycling vendors, Dynamics 365 to aggregate bulk
data, and the Power BI platform to visualize data across
portfolios. We now have more consistent, high-quality
data about the amount of waste, the type and quality,
where it is generated, and where it goes, informing
strategy to achieve our targets.
Customers and partners
We are dedicated to using our technology to help
customers, partners, and suppliers around the world
reduce their waste footprints through our learnings and
with the power of data, AI, and digital technology.
Collecting e-waste for responsible recycling in India.
Tackling India’s e-waste
with a secure cloud
Startup Karo Sambhav is taking on the seemingly
impossible task of formalizing India’s e-waste economy.
Roughly 7,200 tons of e-waste lands in India’s capital
city from across the country and abroad every day.
When a team collects a waste shipment from an
aggregator, its members upload photographs and
details into an app. This information is hosted securely
on Microsoft Azure. Karo Sambhav is operating in
28 states and three union territories in the country
today. It had engaged with more than 500 companies
and government institutions, 22,700 schools, 5,000
informal sector aggregators, and 800 repair shops as of
December 2020 and was able to collect and send about
12,000 metric tons of e-waste for responsible recycling.
8
-
-
-
69Overview Carbon Water Waste Ecosystems Appendix
Driving transformation (continued)
Blockchain to power the plastic
reduction ecosystem
Plastic Credit Exchange (PCX), a nonprofit organization
with origins in the Philippines, partnered with Microsoft
to develop a blockchain-protected credit registry
for the first global nonprofit plastic offset program,
effectively reducing the flow of plastic waste into our
landfills and oceans. PCX has built a wide ecosystem
of partners to facilitate the recovery, transport, and
processing of post-consumer plastic waste, seeking
out the most environmentally recommended solutions
available. The company undergoes verification via a
third-party audit using its Plastic Pollution Reduction
Standard and results are made public through an
online registry. PCX now uses a Microsoft Azure-based
blockchain solution to provide confidence, traceability,
and transparency within its ecosystem. By the end of
2021, PCX is projected to have enabled the removal
of approximately 37 million kilograms of plastic waste
from the environment.
10
Waste and recycling digital transformation
Australian businesses export around 6,700 consignments
of waste each year. As of January 2021, the Australian
Department of Agriculture, Water, and the Environment
(DAWE) requires that any business that wants to export
waste glass must apply for a license. Working with
Atturra and Microsoft, DAWE created a digital platform
using Dynamics 365 to streamline the application
process for both exporters and department personnel
while keeping data secure and private. The system also
provides detailed national-level data on exports of waste
in near-real time, improving Australia’s understanding of
the evolving circular economy and providing an evidence
base for future policies.
Creating a more sustainable fashion
supply chain
H&M Group is on a mission to lead the charge towards
a more sustainable fashion future. As part of its efforts,
in March 2020 the Group launched Treadler, a B2B service
that offers access to H&M Group’s supply chain to other
fashion brands across the industry. Treadler’s clients
will have the necessary data to make more sustainable
product development, sourcing, production, and
logistics decisions. From selecting materials to choosing
suppliers and factories, these sustainable choices can
be traced across the H&M Group’s global supply chain
and put towards global sustainability goals for the
entire fashion industry. Microsoft supported Treadler
in the development of its technology infrastructure
and backbone. To ensure deployment was fast, Treadler
was supported by the Microsoft team to help guide
a successful and efficient implementation. Treadler is
also rolling out a dashboard that will help clients better
consider manufacturing impacts as they place orders,
and provide information about the sustainability
performance to make even more informed decisions
about sustainability.
BeachBot uses AI to spot cigarette butts, pluck them out, and dispose of them in a safe bin.
Cleaner beaches with AI and robots
Every year, 4.5 trillion cigarette butts end up in the
environment. When water touches discarded cigarette
butts, the filters leach more than 30 chemicals that are
highly toxic to aquatic organisms. TechTics is working
on a solution to resolve this environmental and social
issue with technology. It has built a mobile beachcleaning
machine called BeachBot, which uses AI with
the help of Azure infrastructure and Microsoft Trove to
spot cigarette butts, pick them up, and dispose of them
in a safe bin. The beach rover’s AI system is trained to
recognize cigarette butts, based on photos submitted via
Trove by the public. This responsible approach to AI helps
contributors to the project feel like they are part of a
larger community tackling cleanup in their environments.
37MBy the end of 2021, PCX
is projected to have
enabled the removal
of approximately
37 million kilograms
of plastic waste from
the environment.
70Overview Carbon Water Waste Ecosystems Appendix
Enabling
systems change
We are focused on new ways to
harness the power of technology,
partnerships, and investments to drive
impact at scale and pace to help the
world more effectively transform to
a circular economy.
Circular materials management requires all stakeholders
to participate in the transition from discarding materials
to reusing them. Appropriate infrastructure and
technology are important factors needed to actualize
this vision while minimizing environmental impact.
To enable and accelerate the circular economy, the world
must consider what materials are used, how goods are
manufactured, how products are used and reused, how
and where materials are collected at end-of-life, and how
they are brought back into the supply chain.
Circular materials management requires the transition from discarding materials to reusing them.
Funding innovation via CIF
The Climate Innovation Fund (CIF) invests in technologies
and processes that can reduce the amount of waste
generated by repurposing waste into other usable
materials and products and enabling the continuous safe
use of natural resources.
In 2021, we invested in Rheaply, a technology-enabled
platform that brings together companies, government,
educational institutions, and more to generate increased
visibility and circularity of physical assets. Rheaply allows
for transfers of materials that may otherwise go to waste
and is building insights around waste diversion and
embodied carbon emissions saved on the platform.
In FY21, we kicked off an internal pilot with Rheaply
to better understand the opportunity for creating an
internal hardware reuse program. We aim to extend
the life of internal hardware turned in for recycling,
creating a standardized, scalable, traceable, and circular
program for our assets prior to responsibly recycling.
We are also seeing impact from our 2020 Closed Loop
Partners fund investments, including the following
developments in their portfolio.
Turning waste into clean energy
HomeBiogas (HBG), based in Israel, is a leader in
developing affordable, simple-to-use biogas systems,
enabling people and businesses around the globe to turn
their own organic waste into renewable energy and liquid
fertilizer on site. A typical household can save six tons of
CO2 emissions a year with the entry-level biogas system.
HBG serves over 10,000 households across more than
100 countries. The company has improved the circularity
of the products themselves—lengthening the shelf life
to over 15 years, and making the materials used for the
digester 100 percent recyclable. Closed Loop Partners,
an early investor of HBG, currently represents the largest
ownership stake in the company, which currently trades
on the Tel Aviv Stock Exchange.
8
Providing a model for circular economy infrastructure
Balcones Resources, the largest privately held recycling
company in Texas, became the Closed Loop Leadership
Fund’s inaugural investment in October 2019. As part of
Balcones’ growth strategy to build best-in-class recycling
operations across the southern United States, the
company closed a bolt-on acquisition of Single Stream
Recyclers (SSR) in 2020. SSR is the first AI-powered
recycling company in the United States. Balcones’s facility
in Austin, Texas processed 136,000 tons of high-quality
recyclable materials in 2020, including 80,000 tons of
paper, more than 20,000 tons of glass, and at least 4,000
tons of plastics.
8
71AppendixEcosystemsWasteWaterCarbonOverview
Investing in AI
Through our AI for Earth program, we are supporting
startups and nonprofits using cloud, data, and AI to
accelerate the pace of innovation in waste, including
the following projects.
Using AI to study the sustainability of housing
demolitions and relocations
The University of Connecticut is applying AI to detect
construction changes between the years of 2014, 2017,
and 2020 in Shanghai, China. The purpose is to find out
whether demolition and relocation has led to substantial
waste of resources.
Seeing trash and targeting local actions
using AI
Let’s Do It Foundation has developed an AI algorithm
for detecting trash in geolocated images. Today, the
algorithm is surveying images all over the world, locating
waste on a global scale so that a network of cleanup
teams and local municipalities can target the most
affected locations.
Using AI and robotics to accelerate the world’s transition to the circular economy.
Revolutionizing the waste
management industry
Recycleye uses AI and robotics to revolutionize the waste
management industry, accelerating the world’s transition to the
circular economy. In 2021, Recycleye scaled from research and
development to commercialization with strategic and technical
support from Microsoft. The company brings greater transparency
to the waste management industry by detecting materials on a waste
management facility’s conveyor belts to deploy automated sorting.
Their operating system is built on Microsoft Azure, ensuring data
and model security, as well as scale. To train the Recycleye Vision
computer vision solution, millions of images and data points have
been collected from waste facilities. As Recycleye’s datasets continue
to grow, the company can easily scale up its Azure resources in line
with requirements.
Enabling systems change (continued)
72Overview Carbon Water Waste Ecosystems Appendix
Driving collective action
Transitioning to a global circular economy takes an
ecosystem of aligned partners. We seek transformational
partnerships that help develop and deliver research,
guidance, and implementation roadmaps that enable
the circular economy.
Collaborating as a Partner to the Ellen
MacArthur Foundation
In July 2021, we advanced our relationship with the
Ellen MacArthur Foundation from Member to Partner,
elevating opportunities for Microsoft employees to learn
and engage on topics of the circular economy through
community platforms, workshops, events, courses,
and collaborative projects.
Leading on packaging innovation
In January 2021, Microsoft kicked off a project with
members of the Ellen MacArthur Foundation Network
(including Aquafil, BASF, Berry Global, CHEP/Brambles,
Cisco, the Estée Lauder Companies, Flex, Mainetti, Mondi,
and SCG) to create a circular packaging solution to
replace the existing linear path plastic-based stretch wrap
that is used to stabilize and protect products in transit.
This cross-sectoral group is researching and piloting
three different pathways to eliminate single-use stretch
wrap used in a linear path: replacing stretch plastic with
a compostable film, implementing reusable materials for
securing pallets, and improving the recovery of singleuse,
linear plastic-based film for higher value and closed
loop recycling solutions. The pilots and results will be
detailed in a white paper to be published in Q2 of 2022.
Driving standards with the Capital Equipment Coalition
North America
In January 2021, Microsoft became a founding member
of the Capital Equipment Coalition North America
alongside DLL, GE Digital, Philips, and SAP and in
partnership with the U.S. Chamber of Commerce
Foundation and the Platform for Accelerating the Circular
Economy (PACE). We joined the Coalition to support the
capital equipment industry’s acceleration to a closed
loop model that preserves and recovers the value of
materials across a product’s lifecycle, leading to reduced
waste and carbon emissions. As a group, we’re working
towards circularity standards and methodology that
measures the environmental impacts of “X as a Service”
models compared to traditional ownership models.
10Microsoft is
collaborating with
10 other companies to
test circular packaging
solutions to replace
stretch wrap packaging.
Delivering research, guidance, and roadmaps that enable the circular economy.
Designing new solutions with Circular
Electronics Partnership
An alliance of international organizations and their
member companies, the Circular Electronics Partnership
is committed to driving a coordinated transition
towards a sustainable and economically viable circular
industry by creating alignment, avoiding duplication,
and stimulating ambitious circular action across the
electronics value chain. The Partnership builds off the
collaboration that produced A New Vision for Circular
Electronics and convenes seven global organizations
and their respective members: the Global Electronics
Council (GEC), the Global Enabling Sustainability Initiative
(GeSI), International Telecommunications Union (ITU),
Platform for Accelerating the Circular Economy (PACE),
Responsible Business Alliance (RBA), World Business
Council for Sustainable Development (WBCSD), and
World Economic Forum (WEF). The partnership is the
first time that experts, business leaders, and international
organizations will co-design solutions around the
circular electronics industry and will establish a network
to elevate the action and ambition of the industry in a
coordinated way.
Enabling systems change (continued)
73Overview Carbon Water Waste Ecosystems Appendix
Key trends 1
Circularity supports decarbonization pathways.
Implementing circularity activities like purchasing
recycled materials, offering a service model, or
keeping materials in use longer can reduce the
embodied carbon of materials. Circularity plays
a key role in reaching our carbon negative
commitment to reduce our Scope 3 emissions
by half by 2030.
2
Circularity still lacks common standards
needed to scale.
Circular economy initiatives do not share a
standard method of measurement across
industries or product types and may not always
accurately represent environmental impact.
To scale implementation in the long term, we
need the enabling infrastructure to measure,
monitor, and verify material origin and flows.
3
Waste data tools optimize quality and time.
In FY21, we invested to digitize waste data across
the company. We now have more consistent,
higher-quality data about the amount of waste,
its type and quality, where it is generated, and
where it goes. As we implemented waste data
tools across the entire company, we saved time
collecting and reporting this data from our
cross-company sustainability managers
to executive leadership, to customers and
regulatory bodies.
4
Equity and economy are equally important
in a circular economy.
To date, the primary focus of a circular economy
has been on the “economy” aspect. Equity is
equally as important, and we need to focus on
a just transition for every person, organization,
and community. The world must address the
disproportionate effects of upstream resource
extraction and downstream waste management
and pollution. It is critical to develop a strategy
that ensures under-represented and underresourced
communities are not left behind in
the transition to a circular economy.
5
Zero waste roadmaps need sitelevel
adaptability.
Planning for waste interventions must be
considered throughout the value chain and by
location. Upstream decisions like procurement
and use of materials affect downstream
management and processing of materials
as eventual waste. Location also affects zero
waste implementation, and a certain degree of
customization can ensure alignment to global
efforts while contextualizing the program for
local realities. While there are best practices
that can be shared and replicated on a global
scale, there are unique characteristics for each
campus, such as its local infrastructure, size, or
dining services. Creating a localized approach to
zero waste drives local ownership and program
effectiveness, while also laddering up to a
global target.
FY21 was a year of progress and learning for Microsoft on our journey to zero waste.
74AppendixEcosystemsWasteWaterCarbonOverview
What’s next? 1
Continue towards zero waste
by 2030
We will scale programs such as our Circular
Centers and the elimination of single-use plastics
from packaging for Microsoft products and
within our supply chain. Across the company,
we are using baseline data to inform annual
roadmaps that will result in meaningful
environmental outcomes for our employees,
consumers, and the diverse communities in
which we operate.
2
Build circularity into our contracts
We will work upstream to develop better
materials, including recycled materials, and
ensure contracts are in place to support circular
processes. We are also contracting with suppliers
to engage in reverse logistics models and takeback
programs for waste reduction and reuse
of packaging materials. From downstream
waste haulers, we are contractually requesting
data transparency, optimization of services,
and waste sorting education to promote zero
waste outcomes.
3
Use our voice to align waste
and circularity standards
We will help to drive standardization across
circularity standards within the Capital
Equipment Coalition and use our voice to
coalesce industries towards a set of principles
to promote circular economy progress. There is
an opportunity for cross-industry collaboration
for waste and circularity data standards, including
a framework for capturing reliable and consistent
data and methodologies.
4
Implement circularity to reduce
embodied carbon
We are continually exploring design changes,
material selection, and business processes to
facilitate deep embodied carbon reductions
across our operations and products. We are
analyzing the optimal use of conventional
materials, such as concrete and steel, and
pursuing more ambitious opportunities with
emerging alternative materials that carry
significantly less embodied carbon.
5
Advance waste data tools
Building on our FY21 work to transform our
waste accounting, we will continue to improve
our waste data tools so they more accurately
model business activity. The ability to forecast
environmental impacts will drive upstream
sustainable decision-making that minimizes
waste and associated carbon emissions. It will
also help us understand the environmental
impacts of circularity practices like reuse, repair,
redistribution, and recycling. We are exploring
the best methods to account for this, such as
measuring the per-year and absolute carbon
footprint of a product.
6
Increase employee engagement
In FY22, as new recycling initiatives are deployed
at the Circular Centers, we are focused on
further iterating operational procedures and
training for zero waste practices. We are also
building design guidelines for engineers that
define principles for circular, low-carbon hardware.
75AppendixEcosystemsWasteWaterCarbonOverview
What΄s next? (continued)
7
Expand our circular strategy
in devices
Our work around recycled content, repairability,
recyclability, and material efficiency continues to
grow. Our framework for circularity will account
for each phase of the device lifecycle and align
with leading industry reporting standards and
forthcoming circularity legislation. We will
also continue expanding programs, such as
the Microsoft mailback program, to ensure
consumers around the world have access to an
easy, convenient, and free service for returning
their Microsoft branded devices and packaging
for reuse, refurbishment, or recycling. By the
end of FY22, Microsoft plans to implement the
mailback program in 40 countries.
8
Scale the circular cloud
We are deploying new Circular Centers in Dublin,
Chicago, and Singapore by July 2022. We also
plan to launch a Circular Center in Quincy,
Washington in 2022, followed by Sweden in
2025. Working with our internal and external
partners, we will develop new dispositions
that maximize reuse and minimize waste.
In addition, we are exploring additional circularity
functionality, such as harvesting for spares and
warranty reuse, scaling buyback to network
hardware, and providing recycling support—
all of which can be performed at the Circular
Centers. We are also working with our logistics
packaging partners to reduce single-use plastic
in packaging and transition to recyclable and
compostable packaging.
We are focused on further iterating operational procedures and training for zero waste practices.
76AppendixEcosystemsWasteWaterCarbonOverview
Resources
How circular centers will help Microsoft
achieve zero waste by 2030 video
Get inspired by our first-of-a-kind approach towards
designing and implementing circularity into our cloud.
Find out
more here
Microsoft Circular Centers | Azure Videos |
Channel 9 (msdn.com)
Learn more about circularity and our Circular Centers.
Find out
more here
Achieving Operational Zero Waste
An inside look into Microsoft’s operational zero
waste journey.
Find out
more here
Global end-of-life programs for devices,
batteries, and packaging
Find out where and how to recycle your Microsoft
devices, courtesy of Microsoft.
Find out
more here
IT asset disposition guide
Learn about IT asset disposition options for customers
migrating to Microsoft Azure.
Find out
more here
Microsoft is committed to sharing
our progress, challenges, learnings,
and best practices throughout our
sustainability journey.
Capital Equipment Coalition North America
Learn more at the U.S. Chamber Foundation’s open
forum to reduce the environmental footprint of
the capital equipment sector through goal setting,
information-sharing, and collaboration.
Find out
more here
Ellen MacArthur Foundation
Find out more about the circular economy and
the vision for an economic system that’s better
for the people and the environment.
Find out
more here
Rheaply Asset Exchange Manager
(AxM) Platform
Learn about Rheaply’s resource management
and exchange platform to resource assets,
services, and expertise.
Find out
more here
We are committed to becoming a zero waste company by 2030 and helping other companies on their journeys.
77AppendixEcosystemsWasteWaterCarbonOverview
Ecosystems “Only when we have a
massive amount of planetary
data and compute at a
similar scale can we begin
to answer one of the most
complex questions ever
posed—how do we manage
natural resources equitably
and sustainably for a
prosperous and climatestable
future?”
Dr. Lucas Joppa, Chief Environmental Officer
Contents
Our approach 79
Taking responsibility for
our land footprint
81
Driving transformation 82
Enabling systems change 84
Key trends 87
What’s next? 88
Resources 89
78Overview Carbon Water Waste Ecosystems Appendix
Our approach
A commitment
to protect more
land than we
use and build
a Planetary
Computer
The context
Healthy ecosystems are critical for a healthy planet
—environmental sustainability can’t exist without
ecosystem sustainability. Unhealthy ecosystems, created
or exacerbated by climate change and biodiversity
collapse, threaten our entire civilization. And yet,
according to the latest United Nations Intergovernmental
Science Policy Platform on Biodiversity and Ecosystem
Services (IPBES-8) study, the health of ecosystems on
which we and all other species depend is deteriorating
more rapidly than previously thought. Put simply, we
are eroding the very foundations of our economies,
livelihoods, food security, health, and quality of
life worldwide.
Microsoft recognizes that ecosystems are the thread
that connects all our sustainability commitments.
Ecosystems are where we invest in carbon sequestration
projects that help us achieve carbon negativity, they are
the watersheds we commit to protect and replenish,
and they are where waste is ultimately diverted. We need
a strong, efficient, scalable way to monitor, understand,
measure, and ultimately manage the impact of our
actions or inactions on ecosystems—both globally
and locally.
In the past year, Microsoft has made considerable
progress towards its leading ecosystem commitments
of protecting more land than we use and delivering
our Planetary Computer to provide access to the world’s
critical environmental datasets and to function as a
computing platform that enables partners to measure,
monitor, model, and manage healthy ecosystems.
Our commitment: protect more land than we use by 2025
and build a Planetary Computer
Building a Planetary Computer
We will aggregate environmental data from around
the world and put it to work through computing
and machine learning in a new Planetary Computer.
Using our voice on ecosystem-related
public policy issues
We will support and advocate for public policy
initiatives that measure and manage ecosystems
at the national and global scale.
Taking responsibility for
our land footprint
We will take responsibility for the ecosystem
impacts of our direct operations by protecting
more land than we use by 2025.
Empowering partners and customers
around the world
We will use the Planetary Computer to develop
and deploy the digital technology that helps our
partners and customers with environmental
decision-making in their organizational activities.
79AppendixEcosystemsWasteWaterCarbonOverview
11,000
Microsoft land use footprint is
(100 percent of land use)
acres
17,268of total land contracted to protect in FY21
(150 percent of land use)
acres
FY21
Our approach (continued)
Our progress
>17,000 acres
In FY21, we contracted to protect more than 17,000
acres of land. This puts us on a path to exceed our
commitment to protect more land than we use by
more than 5,000 acres.
>500 Planetary
Computer users
The Planetary Computer private preview released
as planned in April 2021, with more than 500 users
signed up and using the APIs and scalable compute.
24 petabytes
of data
We have made available 24 petabytes of data
with more than 30 key environmental and Earth
observation datasets to Azure in consistent,
analysis-ready format that is freely available
for use by anyone.
80
850+ grants
Since its inception in 2017, our AI for Earth program
has provided more than 850 grants to organizations
working in 110 countries around the world, granting
more than $20 million in Azure credits.
Delivered
new Planetary
Computer
applications
We partnered with subject matter experts to use
the power of the Planetary Computer to develop a
growing set of applications that enable data-driven
decision-making for the environment, ranging from
conservation planning and forest risks to land cover
and classification.
Ecosystems Chart 1
Achieving our target of protecting more land than we use by 2025
In FY21, we contracted to protect more than 17,200 acres, which is 50 percent more than the land we use to operate.
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Acresofland
AppendixEcosystemsWasteWaterCarbonOverview
Protecting ecosystems
Taking
responsibility
for our land
footprint
Microsoft directly operates on
approximately 11,000 acres of land
around the world, and we recognize
that our own land footprint has an
impact on ecosystems.
We have made a commitment to permanently protect
more land than we use by 2025. We are also looking at
ways for our datacenters to integrate and give back to
the natural environment.
Since making this commitment in April 2020, we
identified two leading land protection organizations,
the National Fish and Wildlife Foundation (NFWF) within
the United States and The Nature Conservancy (TNC)
globally, to partner with to achieve our commitment to
protect more land than we use. We used a data-informed
approach to identify ecosystems most at risk, using TNC’s
last chance ecosystem framework and NFWF’s national
landscape conservation framework. We also prioritize
projects that have the support and involvement of local
and indigenous populations.
In FY21, we contracted for projects that will help protect
more than 17,000 acres of land, including the following
TNC Belize Maya Forest Project
We contributed to the purchase of the Maya Forest
land, one of the largest remaining tropical forests in the
Americas outside of the Amazon. The approximately
236,000 acres secures a vital wildlife corridor in Central
America’s dwindling forests. This area is critical for the
protection of iconic wildlife species, such as jaguars and
ocelots, and preserves a significant living carbon reserve.
NFWF Western Big Game Migration Program
We contributed to the purchase of permanent
conservation easements in Montana, Colorado, New
Mexico, and Nevada that will protect the migration
corridors for species of greatest conservation need,
including mule deer, elk, bighorn sheep, and moose.
This effort also allows apex predators to thrive,
including mountain lions, grizzly bears, and Canada
lynx. Providing contiguous protected lands is crucial
for enabling the successful migration of these wideranging
species.
Giving back to the natural environment
As we expand our operational footprint with new
datacenters, our approach includes work to find
ways for our datacenters to give back to the natural
environment. Understanding how we can provide the
same (or better) performance as an intact ecosystem
starts with understanding how an ecosystem performs
on its own. We have begun assessment of ecosystem
performance in 12 datacenter regions, to be completed
by end of 2021. Through this research, we are quantifying
ecosystem performance in terms of services including
water quantity and quality, air, carbon, climate, soil
health, human health and wellbeing, and biodiversity.
The goal is to renew and revitalize the surrounding
area—resulting in mutual, regenerative value for the
local community and environment.
We measure this in percentages of intact ecosystems,
meaning the higher the percentage, the more effective
we are at meeting nature’s benchmark for the area.
The findings are helping to inform one of our first
projects in North Holland, which is part of our
Amsterdam datacenter region. Around the datacenters,
we will construct lowland forested areas as well as
forested wetlands, which are highly saturated with water
and vegetation suited for water filtration to naturally
process storm water and runoff. Modeled results from
these different approaches suggest that ecosystem
performance can be restored to as much as 75 percent
(where we are able to successfully recreate 75 percent
of the function of the untouched ecosystem).
The Maya Forest land is one of the largest remaining tropical forests in the Americas
outside of the Amazon.
5,000We will exceed our
commitment to protect
more land than we use by
contracting for more land
protection, putting us on
path to exceed our goal by
50 percent.
81AppendixEcosystemsWasteWaterCarbonOverview
Driving
transformation
We believe that Microsoft’s most
important contribution to protecting
ecosystems and biodiversity is
delivering the Planetary Computer,
which provides access to the world’s
critical environmental datasets, AI,
and digital technology.
Our land footprint is relatively small, which is why
we also focus on using our technology to support
ecosystem health.
We believe that our biggest contribution to the
protection of ecosystems is to identify, invest in, and
orchestrate a coherent cloud infrastructure that brings
together all relevant stakeholders and offers best-inclass
science-driven tools, AI, digital catalogs of species,
distributed computing frameworks, and global satellite
images. We make these tools cloud-native, bring our
business partners to deploy them to be used, and
build trust by making visible the science roots and the
provenance of the data, while creating best practices for
deployment by deploying ourselves first. We are also
embracing open source, identifying critical petabytes
of satellite images being collected and released as open
data, including the Copernicus satellite programs and
tools like Marxan.
The manifestation of this work is what we call the
Planetary Computer. This open-source solution includes
data catalogs, APIs, and applications to empower both
data scientists and environmental scientists to craft
more effective and informed strategies to protect and
restore ecosystems.
Product
In April 2021, we released the Planetary Computer, which
enables global-scale environmental monitoring by
combining petabytes of data and spatial analysis tools
to power sustainability applications. It is a platform that
lets users build on the power of the cloud to accelerate
environmental sustainability and Earth science.
The Planetary Computer consists of four
major components:
• The Data Catalog, which includes more than
24 petabytes of data about Earth systems, hosted
on Azure and made available to users for free.
• APIs that allow users to search for the data they need
across space and time. Instead of sifting through
millions of files, we index content so any user can ask
directly for a type of data (for example, “give me all
data from these satellites for Kansas in summer 2020
when it was not cloudy and give me those times on
a specific map projection of the average values”).
This vastly reduces the complexity of dealing with
petabytes of data.
• The Hub, a managed computing environment
that allows scientists to process massive geospatial
datasets. To date, we have seamlessly deployed more
than 20,000 cluster node workers to support our
user workloads.
• Applications, built by our network of partners,
that put the Planetary Computer platform to work
for environmental sustainability, ranging from
conservation planning and forest risk management
to land cover classification.
The Sentinel-2 program provides global imagery in 13 spectral bands and a revisit time of five days.
82AppendixEcosystemsWasteWaterCarbonOverview
The Planetary Computer uses open-source tools and
supports open standards. In fact, the foundation of the
Planetary Computer is the incredible ecosystem of tools
being developed in the open by our partners and the
much broader open-source community. For example, our
Hub builds on the work done by the Pangeo community
to put the tools of data science to work for the Earth
science community, and our API builds on the work done
by the STAC community to streamline and standardize
the cataloging and discovery of geospatial data.
The Planetary Computer API and Planetary Computer
Hub are currently in private preview, accepting a small
set of early users, with plans to go public in mid-2022.
All the datasets are available and can be accessed via
Azure Blob Storage. Datasets can be used by developers
working within or outside of our Planetary Computer
Hub. They can integrate each component in their existing
processes or use the full Planetary Computer with one
single experience.
24 PBWe have made
available 24 petabytes
of data with more
than 30 key
environmental and Earth
observation datasets.
Driving transformation (continued)
Protecting and managing land, oceans, and biodiversity.
Customers and partners
We partnered with subject matter experts to use
the power of the Planetary Computer to develop
applications that enable data-driven decision-making
for the environment, including the following.
Global land cover maps
In June 2021, Esri published a new high-resolution 2020
Global Land Cover map for users around the world.
The 10-Meter Land Cover map is the collaborative result
of compute and Sentinel-2 data from the Microsoft
Planetary Computer and a novel deep learning AI
model developed by Impact Observatory. Highresolution,
open, accurate, and timely land cover maps
are critical for decision-makers in many industry sectors
and developing nations, supporting a broad range
of sustainability and conservation efforts. The data
is hosted in ArcGIS Living Atlas of the World and the
Planetary Computer.
Ecosystem mapping and monitoring
Conservation Science Partners’ Analytics Lab uses the
Planetary Computer to better visualize ecosystem
monitoring projects and help make the findings more
intuitive and accessible. These mapping applications
assess wildlife habitat connectivity on working
landscapes, anthropogenic impacts to terrestrial
landscapes, and changes in forest structure over time.
Conservation planning with spatial data
The Nature Conservancy (TNC) is using the Planetary
Computer to protect and manage land, oceans,
and freshwater biodiversity for nature and people.
In partnership with Microsoft, TNC is scaling impact and
accelerating conservation with Marxan, a world-leading
decision-support software for spatial conservation
planning. Microsoft and TNC are enabling more
equitable access to Marxan by bringing it to the cloud
with platform development support from Vizzuality.
Together we are helping people around the world make
evidence-based decisions more quickly, inclusively, and
transparently to protect the world’s biodiversity.
Risk assessments for forest-based
climate solutions
CarbonPlan is using the Planetary Computer to enable
more transparent and scientifically rigorous evaluation
of forest-based climate solutions. By shining a light
on data from past and future carbon offset projects,
procurement programs can better understand the
climate risks of carbon credit purchases. Microsoft used
this application to visualize the climate risks of forest
carbon offsets to help us manage our carbon removal
purchasing program more effectively.
Carbon sequestration estimates for
above-ground stock
Chloris Geospatial uses the Planetary Computer to
generate their “above-ground carbon stock” noncommercial
product, which gives anyone the ability
to analyze forest carbon globally.
83AppendixEcosystemsWasteWaterCarbonOverview
Enabling
systems change
We are focused on new ways to harness
the power of technology, partnerships,
investments, and policy to drive impact
at scale and pace to help the world
protect ecosystems and biodiversity.
At Microsoft we know that our actions alone will not
be enough to protect ecosystems and biodiversity.
The world will need new partnerships, solutions,
and policies that have the potential to scale rapidly
and globally.
Investing in AI
To empower organizations working on environmental
challenges, we provide training and access to cloud
and AI technologies. Since its inception in 2017, our AI
for Earth program has provided more than 850 grants
to organizations working in 110 countries around the
world. While initially these grants provided access
to Microsoft cloud services and additional training,
we’ve expanded the program to now include the
Planetary Computer. This past year, we also added
new partners that bring significant new capabilities to
the program. We partnered with the Group on Earth
Observations (GEO) Secretariat to better reach geospatial
researchers and practitioners working at the forefront
of environmental use cases. We launched the $1 million
GEO-Microsoft Planetary Computer grant program to
support early adopters of the Planetary Computer to
apply Earth observations to address environmental and
societal challenges. We selected the first eight grant
recipients in September 2021 who all received access to
the NICFI Satellite Data Program on Azure and launched
a second request for proposals in October 2021 in
partnership with Planet Labs.
Monitoring to be able to create more effective reforestation plans and monitor reforestation progress.
Deforestation prediction
We partnered with Vale and our Brazilian subsidiary
to build PrevisIA, a solution for NGO Imazon that
anticipates information on regions with a higher risk of
deforestation and wildfires in the Amazon Rainforest
through AI. The open platform analyzes various data
such as topography, land cover, urban infrastructure,
official and unofficial roads, and socioeconomic
statistics to refine the deforestation risk model and
identify the different types of territories threatened
by deforestation in the Amazon Rainforest including
indigenous lands and conservation units. All the
information is publicly disclosed at a control panel.
Public bodies, private companies, and civil society can
plan and carry out preventive actions, combating and
controlling deforestation.
84AppendixEcosystemsWasteWaterCarbonOverview
Enabling systems change (continued)
People-powered research, using open source and Azure technologies to lower the barriers to entry for scientific discovery.
Accelerating scientific
discovery with crowdsourcing
Zooniverse is the world’s largest platform for peoplepowered
research, using open source and Azure
technologies to lower the barriers to entry for scientific
discovery. Researchers upload their images, videos, or
audio files—like camera trap images of wild animals
or satellite imagery of a star—and Zooniverse’s global
community of over 2 million volunteers tags, annotates,
or transcribes the file to aid classification.
85
Preventing illegal trade of shark and
ray products
We partnered with Conservation International and the
National Parks Board of Singapore to develop a mobile
application that helps identify shark and ray species using
technology such as computer vision and AI. This will
enable ground inspectors at national borders to rapidly
assess and identify shark and ray species and seize
products that are suspected to be illegal.
Protecting coastlines and shorelines
We partnered with the Qatar Environment and Energy
Research Institute (QEERI) to build a solution using
remote sensing technologies to detect coastal changes
and predict shorelines and water line evolution for
the next 10, 20, and 50 years. A change detection map
assesses the coastal hazards on urban infrastructure and
population, including the impact of seawater intrusion on
agricultural and food production in the north of Qatar.
Modeling release sites for
disease-fighting mosquitoes
The World Mosquito Program (WMP) uses Azure to
model human population distribution in dengueendemic
areas to determine the best release locations for
disease-fighting mosquitoes to stop the spread of deadly
dengue fever. Through high-resolution satellite imagery,
demographics, and climate data the model is trained
to provide accurate estimations of spatially-distributed
human population density. This allows WMP experts to
easily develop optimal release strategies for Wolbachia
mosquitoes. Research shows that Wolbachia can
sustain itself in mosquito populations without continual
reapplication, making this a long-term, cost-effective
and self-sustaining approach with no adverse impact on
natural ecosystems.
Overview Carbon Water Waste Ecosystems Appendix
Enabling systems change (continued)
Driving collective action
Successful strategies, interventions, and approaches to
improve ecosystem health require a great deal of data
and collaboration across public and private sectors,
as well as civil society. We are taking an ecosystem
approach to ecosystems, creating or broadening our
relationships to provide more people with better access
to this critical information.
UN Biodiversity Lab
In 2021, we launched a new partnership with the UN
Biodiversity Lab to help connect remote observations,
field data, and AI/machine learning tools. This work,
powered by the Planetary Computer, will enable
countries to develop richer environmental accounts
and drive better environmental decision-making.
GEO BON
Fostering global connections and collaboration will
be critical to address climate change. In the past year,
we broadened our work with the Group on Earth
Observations Biodiversity Observation Network
(GEO BON) to connect with a global network of
scientists to enable a scalable approach to expanding
and accessing biodiversity information and insights.
CSIRO
We’re supporting CSIRO in Australia to establish a climate
intelligence platform that puts trusted and credible
climate risk science in the hands of businesses in Australia
and the Asia region and enables them to assess, disclose,
and manage their climate risks. In addition, together with
CSIRO and the University of Reading, we have developed
a research partnership to improve our understanding
and assessment of climate change risk.
Radiant Earth
The Radiant Earth Foundation develops Earth
observation machine learning libraries and models
through an open-source hub to support global
missions like agriculture, conservation, and climate
change. We support Radiant Earth by co-building
some of the key software libraries, making it easy to
bridge to and from the Planetary Computer. We are
also jointly running competitions to improve machine
learning models.
OS-Climate
We continue to support the OS-Climate initiative,
which is accelerating the development of scenariobased
predictive analytic tools and investment products
that manage climate-related risk and finance climate
solutions across every geography, sector, and asset
class. Microsoft is a founding member, contributes
our expertise on climate risk and data, and provides
additional technology support for the development
of new tools and approaches.
C4IR
In 2020, Microsoft joined the World Economic Forum’s
Center for the Fourth Industrial Revolution Network
for ocean innovation and technology in Norway (C4IR
Ocean). Since then, we have expanded our work with
a new project that has us working with C4IR Ocean to
deliver a tracking application for maritime vessels to
forecast GHG emissions from maritime transportation.
This information is made available through C4IR’s
Ocean Data Platform for regulators, finance institutions,
and port and coastal authorities to enable datadriven
decisions related to the environmental impact
of shipping.
Successful strategies to improve ecosystem health require data and collaboration across public and private sectors.
Advocating for healthy ecosystems
and biodiversity
Governments play a unique and important role in
measuring and managing ecosystems and biodiversity
as they collect and make publicly available massive
amounts of data critical to environmental science.
They also own billions of acres of public land that
they can use to protect, manage, and restore critical
ecosystems. And they establish and implement policies
governing the use and management of natural resources
and ecosystems.
Advocating for policies that advance
measuring and managing biodiversity
and ecosystems
Microsoft submitted comments to the USDA on ways
to advance climate-smart agriculture and forestry.
Microsoft is advocating for the US Congress to
pass the Growing Climate Solution Act to advance
climate-smart agriculture and nature-based carbon
markets. In addition, Microsoft supported funding
in the Washington state budget to develop highquality
nature-based carbon removal protocols.
Microsoft serves on the steering committee of the US
chapter of Trillion Trees and submitted one of the initial
corporate pledges. We have been working with the
organizers on ways to design the initiative in a way that
accelerates reforestation and meaningfully removes
carbon. In Europe, Microsoft supported and engaged
on the EU Biodiversity Strategy for 2030, that aims to
increase protected areas across the EU and to identify
new measures for managing and restoring ecosystems.
Microsoft also committed to support a new dedicated
“European Biodiversity Partnership,” Biodiversa+, that will
bring together science, policy, and practice, and support
data-driven research to stop the loss of biodiversity.
86Overview Carbon Water Waste Ecosystems Appendix
Key trends
2021 was a year of progress and learning for Microsoft on our journey to delivering the Planetary Computer.
1
The volume and variety of spatial data
continues to grow exponentially.
Whether it’s satellites in the sky or sensors
on the ground, data about the Earth is being
captured at higher resolutions, more often,
with a variety of data formats and purposes.
There is also a growing set of model output
and derived products which are large spatial
datasets themselves, valuable to a broad set of
use cases. This creates a deluge of data waiting
to be unlocked for positive environmental
sustainability impact.
2
Data providers are eager to make their
data more accessible for environmental
sustainability use cases.
The organizations that are producing spatial
data know what’s at stake for our ecosystems.
They want to see their data utilized to meet the
sustainability challenges we are facing and work
together to enable users to utilize the data in a
common, interoperable manner.
3
Getting data to the cloud is the only way to
scale the work of a broad range of users.
Data that exists in the cloud has a huge
advantage over data that must be first
downloaded on a user’s system. Unless you
own a supercomputing system, there is no
way to download and compute over the vast
amount of data needed to scale the analyses
and operationalization of that data.
4
Finding and sharing data about the Earth
remains a huge challenge.
Users need to search the vast amount of data
available to find the data they need and have
easy access to data in the areas and times they
care about. Just because data is available does
not mean it is accessible. There is a growing effort
in the geospatial community to enable access
to cloud-hosted data through utilizing cloudoptimized
formats and supplying APIs to search
through standards-based metadata.
5
Open data, open source, open science, and
open standards are critical to collaboration.
The scope of the problems facing our world
mean that no one organization or person
will be able to solve them. The easier it is for
governments, academia, and industry to work
together, the faster we can all move in the same
direction. The best mechanism currently for
this collaboration is doing things in the open:
publishing open datasets, using and investing
in open-source software, publishing open
science, and making data accessible through
open standards.
87Overview Carbon Water Waste Ecosystems Appendix
What’s next? 1
Make publishing and using spatial
data in the cloud simple
We are developing features in the Planetary
Computer that will make it easy to push data to
the cloud and open access to some or all users.
2
Solve data access challenges
for science and operational
applications
Enabling efficient geospatial workflows on Azure
will unlock the power of the massive amount
of data the world is collecting about our Earth
to monitor, model, and manage Earth’s natural
systems. The Planetary Computer will solve the
core data access problems for planetary scale
problems, ranging from scientific research to
enterprise-grade applications, so that developers
building applications on top of it can focus on
what makes their solutions unique.
3
Expand the catalog of datasets
hosted in the Planetary Computer
We are continuously identifying and onboarding
high-value, openly licensed datasets for broad
usage in the Planetary Computer. We are
improving our pipelines to reduce the latency
between data becoming available and being
findable and usable in users’ existing workflows.
4
Support the growing ecosystem
of applications powered by the
Planetary Computer
We will continue to grow our network of
partners developing impactful environmental
sustainability applications using the data and
services of the Planetary Computer. This includes
investing in partners that use technologies like AI
to push the boundaries of what is possible and
empower their users with the tools they need
to make decisions to protect the ecosystems of
our planet.
5
Continue to invest and grow the
open-source ecosystem of tools
working with Earth science data
Microsoft will continue to support the opensource
ecosystem of tools that we use to deploy
our services and that our users rely on to process,
analyze, and operationalize the data of the
Planetary Computer.
We will target new domains like climate forecast and biodiversity observation data.
88AppendixEcosystemsWasteWaterCarbonOverview
Resources
The Planetary Computer
Learn about how the Planetary Computer supports
sustainability decision-making with the power of
the cloud.
Find out
more here
The Planetary Computer Data Catalog
Explore the catalog of datasets available through
the Planetary Computer API.
Find out
more here
AI for Earth technical resource
Access the open-source tools, models, infrastructure,
data, and APIs from Microsoft engineering and
data science teams to support sustainability and
environmental science.
Find out
more here
Microsoft is committed to sharing
our progress, challenges, learnings,
and best practices throughout
our sustainability journey.
AI for Earth grants
Learn about the work of AI for Earth grantees
and learn more about the program.
Find out
more here
AI for Earth partners
Learn about AI for Earth and Planetary Computer
partners and their work.
Find out
more here
We are committed to delivering the Planetary Computer and helping others protect ecosystems.
89AppendixEcosystemsWasteWaterCarbonOverview
Appendix Contents
Appendix A:
How we report 91
Appendix B:
Commitments 92
Partnerships 93
Memberships 93
Recognitions 94
EPEAT 95
Appendix C:
Endnotes 96
Appendix D:
Section 1: Our
environmental data
97
Independent accountant's
review report
112
Section 2: Additional
environmental indicators
113
Appendix E:
Policy 117
90Overview Carbon Water Waste Ecosystems Appendix
Appendix A
How we
report
Reporting standards
Our Reports Hub available at microsoft.com/
transparency provides a consolidated, comprehensive
view of our ESG reporting and data ranging from our
carbon footprint to workforce demographics to political
donations. This Environmental Sustainability Report
is an important part of that overall set of disclosures.
For this and other reports, we inform our disclosure
strategies with careful consideration of commonly used
global standards such as sector-based materiality maps
provided by the Sustainable Accounting Standards
Board (SASB), the United Nations Guiding Principles on
Business and Human Rights Reporting Framework, and
the UN Sustainable Development Goals. We presented
greenhouse gas emissions in accordance with the GHG
Protocol and select environmental metrics that reference
the Global Reporting Initiative Standards (GRI). We have
been reporting to CDP since 2010, consistently making
it to CDP Climate Change A-list and earning the highest
band of A and A- for CDP Water Security since 2016.
On climate-related issues, we are committed to fully
aligning with the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD).
Our commitment to
sustainable development
Read our
TCFD report
Our policies and practices
We work to apply the power of technology to earn
and sustain the trust of the customers and partners
we empower and the communities in which we live
and work. This focus extends to our work to build a
sustainable future where everyone has access to the
benefits and opportunities that technology can bring.
It’s central to our mission to empower every person and
organization to achieve more, and it΄s why many of our
employees come to work every day.
Working together with stakeholders
We know that the decisions we make affect our
employees, customers, partners, shareholders, suppliers,
and communities, and we take their voices into account.
Microsoft receives input from millions of people each
year—from individual customers to policymakers
and global human rights specialists. We bring outside
perspectives into the company and inform our business
decisions through a variety of feedback channels. We go
beyond formal channels, proactively engaging with
key stakeholders, advocacy groups, industry experts,
corporate social responsibility (CSR) rating agencies,
CSR-focused investors, and many others. We also share
our learnings and practices thereby generating industry
dialogue, informing public debate, and advancing
greater progress.
ESG materiality
Our ESG reporting describes those topics which we
consider to be the most important to stakeholders
when evaluating environmental, social, and governance
issues at Microsoft. Therefore, ESG materiality in our
reporting does not directly correspond to the concept of
materiality used in securities law.
A listing of what we currently identify and categorize as
our top ESG issues can be found on our website. In 2020,
Microsoft conducted a materiality assessment focused
on environmental sustainability, which can be accessed in
last year's report.
Governance
Microsoft has made sustainability part of its business,
including embedding it deeply into its governance
structure. Our Board of Directors provides insight,
feedback, and oversight across a broad range of
environmental and social matters. In particular, the
responsibilities of the Board’s Regulatory and Public
Policy Committee include providing oversight and
guidance to the Board and management about
the company’s policies and programs that relate to
corporate social responsibility, including the company’s
environmental sustainability strategy and commitments.
Microsoft’s management team understands that
sustainability performance is linked in myriad ways
to the company’s long-term financial performance
and growth that is sustainable in every sense of the
word. We are committed to building and executing on
strategies to help foster a healthy planet and advance a
more inclusive economy that fosters additional growth
opportunities for everyone. Additional information about
our governance structure for sustainability can be found
in our TCFD report as well as our CDP responses.
Forward-looking statements
This report includes estimates, projections, and other
“forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995,
section 27A of the Securities Act of 1933, and section 21E
of the Securities Exchange Act of 1934. These forwardlooking
statements generally are identified by the
words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “future,” “opportunity,”
“plan,” “may,” “should,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions.
Forward-looking statements are based on current
expectations and assumptions that are subject to risks
and uncertainties that may cause actual results to differ
materially. We describe risks and uncertainties that
could cause actual results and events to differ materially
in our reports filed with the Securities and Exchange
Commission. We undertake no obligation to update or
revise publicly any forward-looking statements, whether
because of new information, future events, or otherwise.
91Overview Carbon Water Waste Ecosystems Appendix
Appendix B
Commitments
Our history 2012–2019
2012
100% carbon neutral
Internal carbon
fee instituted
2016
Zero waste campus
certification
2017
AI for Earth launch
LEED Gold certification
for new datacenters
2018
Supplier carbon
engagement in
China launched
Net zero potable water
Silicon Valley
campus groundbreaking
2019
Carbon fee raised
to $15
Water replenishment
goal set
Our commitments 2020–2050
2025
Operate with 100%
renewable energy
Find out
more here
2025
Protect more land
than Microsoft uses
Find out
more here
2030
Become carbon
negative
Find out
more here
2030
Become zero waste
Find out
more here
2030
Become water positive
Find out
more here
2050
Remove all
historical emissions
Find out
more here
92AppendixEcosystemsWasteWaterCarbonOverview
Appendix B (continued)
Partnerships
Founding member of Transform to Net Zero, whose
2025 goal is for all Fortune Global 1000 companies to
have targets backed up by transformation plans to
achieve net zero no later than 2050.
Find out
more here
Founding member of Water Resilience Coalition, which
will provide tools and guidance for companies to assess
and improve water resilience.
Find out
more here
Founding member of LF Climate Finance Foundation
to help model climate risks.
Find out
more here
Partner with Center for the Fourth Industrial Revolution
Oceans (C4IR) to develop technology-based solutions
to improve ocean health.
Find out
more here
Partner with the Ellen MacArthur Foundation to engage
on topics of the circular economy through community
platforms and collaborative projects, including a pilot
of innovative circular packaging solutions for stretch
wrap film.
Find out
more here
Partner with Water.org to enable access to drinking
water and sanitation in seven stressed regions around
the globe.
Find out
more here
Partner with the Alliance of CEO Climate Leaders (WEF)
Carbon Removal Climate Action Group to support
corporate assessment and scale-up of carbon
removal opportunities.
Find out
more here
Partner with Australia’s CSIRO to establish a climate
intelligence platform that puts trusted and credible
climate risk science in the hands of businesses
in Australia and the Asia region.
Find out
more here
Partner with the UN Biodiversity Lab 2.0, an initiative
of the United Nations Development Program (UNDP),
the United Nations Environment Program World
Conservation Monitoring Centre (UNEP-WCMC), and
the Secretariat of the UN Biodiversity Convention,
to help governments and others better understand
and manage the environment.
Find out
more here
Partner with the Radiant Earth Foundation to bring
AI models and training data to the Microsoft Planetary
Computer.
Find out
more here
Memberships
93AppendixEcosystemsWasteWaterCarbonOverview
Appendix B (continued)
Recognitions
2021 Green Power Leadership Award:
CRS International Market Development
Find out
more here
2021 EPA Green Power Leader:
U.S. Environmental Protection Agency (EPA)
Find out
more here
2021 Climate Leadership Award:
Organizational Leadership
Find out
more here
2021 UN Global Climate Action Award:
Climate Neutral Now
Find out
more here
World Environment Center 2021 Gold Medal:
Corporate Sustainability
Find out
more here
2021 The Just 100: For the fourth year in a row,
Microsoft took first place on The Just 100, a list by
Just Capital and Forbes to rank companies perceived
as “the best at doing right by America”.
Find out
more here
America΄s Most Responsible Companies 2021:
Microsoft was ranked third by Newsweek΄s assessment
of companies across leading ESG areas.
Find out
more here
U.S. Water Prize:
Awarded the U.S. Water Prize for Outstanding Private
Sector Organization celebrating Microsoft’s
achievements in the advancement of sustainable,
integrated, and inclusive solutions to water challenges.
Find out
more here
#1 in Top 100 Most Conscious Brands of 2020:
Microsoft tops Wolff Olins and Hall & Partners’
inaugural list of the world’s 100 most conscious brands.
Find out
more here
2021 COTE Top Ten Award:
Microsoft Silicon Valley Campus was awarded COTE
Top Ten Plus designation for exemplary performance
data and post occupancy lessons.
Find out
more here
Compass Award at COP26:
Microsoft awarded for Environmental Leadership.
Find out
more here
#1 in the 10 most innovative corporate social
responsibility companies of 2021:
Fast Company ranked Microsoft #1 for setting incredibly
ambitious long-term carbon neutrality goals.
Find out
more here
#1 in EcoAct International Top 20 for 2021:
Microsoft was rated as the highest performing company
in demonstrating corporate leadership on climate
reporting across all indices within the DOW 30,
Euro STOXX 50, and FTSE 100.
Download
here
CDP A List 2021 for Climate and Water:
Named to the CDP A List for Climate Change
and Water Security.
Find out
more here
EPEAT see next page
94AppendixEcosystemsWasteWaterCarbonOverview
Appendix B (continued)
EPEAT
EPEAT (Electronic Product Environmental Assessment
Tool) is the leading global Type-1 ecolabel for the
technology sector, managed by the Global Electronics
Council (GEC). The program requires independent
verification of product and corporate eco-attributes
to ensure that the product meets the EPEAT criteria
as claimed. We apply EPEAT standards to our Surface
devices. Surface devices must meet specific sustainability
and lifecycle-based design and performance criteria to
achieve the baseline tier, “Bronze” EPEAT registration
level. The achievement of additional optional criteria
results in a higher registration of “Silver” or “Gold” level.
We are continuously working to reach the highest
level of EPEAT registration level, “Gold”, for all our
devices. In late 2020, we achieved registration not just
in the United States but also in Canada, and in 2021
we expanded our registration to most of Europe.
Following is a summary of our Surface computers on
the EPEAT registry.
These ratings are used by customers to make
purchasing decisions based on product and corporate
environmental and social attributes. We track progress
against EPEAT targets across our Surface portfolio.
For more information, visit the EPEAT registry which
includes a listing of all registered devices including the
countries of registration and the EPEAT tier.
Product US + Canada Europe (27 countries)*
Surface Pro 8 Gold Gold
Surface Laptop Studio Gold Gold
Surface Pro X Gold Gold
Surface Go 3 Gold Silver
Surface Pro 7 Gold Gold
Surface Pro 7+ Gold Gold
Surface Laptop Go Gold Gold
Surface Laptop 4 13.5-inch,
Alcantara palm rest
Gold Gold
Surface Laptop 4 13.5-inch,
metal palm rest
Gold Gold
Surface Laptop 4 15-inch,
metal palm rest
Gold Gold
Surface Laptop 3 13.5-inch,
Alcantara palm rest
Gold Gold
Product US + Canada Europe (27 countries)*
Surface Laptop 3 13.5-inch,
metal palm rest
Gold Gold
Surface Laptop 3 15-inch,
Alcantara palm rest
Gold Gold
Surface Laptop 3 15-inch,
metal palm rest
Gold Gold
Surface Go 2 Gold Silver
Surface Book 3 15-inch Gold –
Surface Book 3 13.5-inch Silver –
Surface Book 2 15-inch Silver –
Surface Book 2 13.5-inch Silver –
Surface Pro 6 Silver –
Surface Pro 5 Silver –
Surface Go Silver –
* Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden, Switzerland, United Kingdom.
95Overview Carbon Water Waste Ecosystems Appendix
Appendix C
Endnotes
1 Scope 2 references in the report represent
market-based emissions.
2 Reported value represents contracted tons during
FY21 reporting year. This number might change
based on contract fulfillment.
3 Measurement is based on the device industry
best-practice life cycle methodology, which is not
currently reflected in Microsoft’s corporate disclosure.
4 Net Zero by 2050 – Analysis – IEA
5 Measurement is based on construction industry
best-practice life cycle methodology, which is not
currently reflected in Microsoft’s corporate disclosure.
Updates to Microsoft’s corporate disclosure
methodologies will be published annually.
6 This statistic is based on a life cycle methodology
for emissions reporting that Microsoft has not yet
adopted in its corporate disclosure.
7 Measurement is based on the Global Logistics
Emissions Council (GLEC) methodology, which is
not currently reflected in Microsoft’s corporate
disclosure. Updates to Microsoft’s corporate disclosure
methodologies will be published annually.
8 These numbers are self-reported by the organization
and have not been verified by Microsoft.
9 672 million liters per year is measured using the
Volumetric Water Benefit Accounting method
with WRI and Limnotech.
10 Total number of people reached confirmed
through independent third-party verification.
95,130 people reached in FY21. Countrylevel
distribution: India—3,038 people and
Indonesia—92,092 people.
96AppendixEcosystemsWasteWaterCarbonOverview
Appendix D
Our environmental data
As part of Microsoft’s commitment to disclose
information about our environmental footprint, the
following sections are a compilation of environmental
metrics across greenhouse gas emissions, energy,
water, waste, and land.
Section 1 presents greenhouse gas emissions in
accordance with the GHG Protocol and select
environmental metrics that reference the Global
Reporting Initiative (GRI) Standards. Deloitte &
Touche LLP performed a review engagement on
management’s assertion related to the specified
information presented in Section 1 of Appendix D
as of and for the fiscal year ended June 30, 2021 and
includes their review report. Information relating to
periods prior to the fiscal year ended June 30, 2021,
was not subject to Deloitte & Touche LLP's review
and, accordingly, Deloitte & Touche LLP does not
express a conclusion or any form of assurance on
such information.
Section 2 presents additional environmental metrics
that show additional detail and breakdowns and was
not subject to Deloitte & Touche LLP’s review.
All reported values represent best available data at the
time of publication. Data is adjusted to incorporate
updated methodology, structural changes, and/or
accuracy improvements. Additional detail on these
changes is included as footnotes where applicable.
Environmental data contents
Section 1: Our environmental data
1.1 Greenhouse gas emissions
Table 1 GHG emissions by Scope 98
Table 2 GHG emissions by type 99
Table 3 GHG emissions by region 99
Table 4 GHG emissions intensity 100
Table 5 Carbon offsets 100
1.2 Energy
Table 6 Energy consumption within the organization 101
Table 7 Energy intensity 101
1.3 Water
Table 8 Water and effluents 102
1.4 Waste
Table 9 Waste generated, diverted, and directed to disposal 103
1.5 Ecosystems
Table 10 Land protection 103
1.6 Management's assertion 104
1.7 Description of the company and inventory boundary 104
1.8 Information on metrics 104
1.9 Methodology and emission factors 105
1.10 Reporting criteria 110
1.11 Independent accountant's review report 112
Section 2: Additional environmental metrics
Table 11 GHG—Scope 1 regional detail 113
Table 12 Other emissions 114
Table 13 Other emissions normalized by revenue 114
Table 14 Electricity consumption 114
Table 15 Renewable energy consumption 115
Table 16 Other energy consumption 115
Table 17 Water withdrawal, consumption, and discharge detail 116
Table 18 Verification/Assurance 116
—
97AppendixEcosystemsWasteWaterCarbonOverview
Appendix D (continued)
Section 1: Our
environmental data
1.1 Greenhouse gas (GHG) emissions
Table 1
GHG emissions by Scope (mtCO2e)
FY17 FY18 FY19 FY20 FY21
Scope 1 107,452 99,008 117,956 118,100 123,704
Scope 2
Location-Based 2,697,554 2,946,043 3,557,518 4,102,445 4,745,197
Market-Based 139,066 183,329 275,420 228,194 163,935
Subtotal emissions (Scope 1 + 2 market-based) 246,518 282,337 393,376 346,294 287,639
Scope 3
Category 1 – Purchased Goods & Services
1,2,5
4,058,000 4,452,000 4,411,000 4,156,000 4,930,000
Category 2 – Capital Goods
1,2,5
1,666,000 2,185,000 2,340,000 2,962,000 4,179,000
Category 3 – Fuel- and Energy-Related Activities (Location-Based)
1
540,000 550,000 650,000 770,000 810,000
Category 3 – Fuel- and Energy-Related Activities (Market-Based)
1,4
250,000 220,000 270,000 310,000 310,000
Category 4 – Upstream Transportation
1,2
52,000 53,000 96,000 102,000 225,000
Category 5 – Waste
1,6
700 500 10,500 9,500 5,700
Category 6 – Business Travel 419,020 461,787 476,457 329,356 21,901
Category 7 – Employee Commuting
1
343,000 345,000 411,000 317,000 80,000
Category 9 – Downstream Transportation
1,3
85,000 98,000 57,000 47,000 45,000
Category 11 – Use of Sold Products
1,3,5
3,757,000 3,910,000 3,375,000 2,983,000 3,950,000
Category 12 – End of Life of Sold Products
1,3
31,000 18,000 18,000 17,000 19,000
Category 13 – Downstream Leased Assets
1
700 1,700 800 6,100 18,900
Subtotal emissions (Scope 3 market-based)
7
10,662,000 11,745,000 11,466,000 11,239,000 13,785,000
Total emissions (Scope 1 + 2 + 3)
7
10,909,000 12,027,000 11,859,000 11,585,000 14,073,000
1 The reported emissions for this category represent an estimate based on assumptions as
outlined in section 1.9 and have therefore been rounded.
2 The emissions calculations for these categories have been adjusted in the current year
to reflect improved availability of suppliers' reported emissions via CDP Supply Chain.
Previous years have been updated to reflect this change.
3 As the product life cycle assessments for Microsoft devices continue to be improved, the
emissions calculations for these categories have been updated for improved accuracy.
Energy use assumptions have been updated to reflect our latest understanding of device
use via telemetry. In addition, minor error corrections were made. Previous years have
been updated to reflect this change.
4 Market-based fuel- and energy-related emissions in FY17—FY20 have undergone a
change in calculation methodology to improve accounting of electricity transmission
and distribution.
5 Overall increase in Scope 3 categories 1 and 2 emissions is driven mainly by the growth
of Microsoft's cloud services business and device manufacturing. Increase in Scope 3
category 11 is driven by an increase in sales and usage of devices.
6 As of FY21, waste emissions calculations include emissions for all waste streams, except
construction and deconstruction which is currently not reported and will be part of data
improvements going forward. This change due to improved data availability has been
retrospectively applied to FY20 and FY19, but not FY18 or FY17 because comprehensive
waste data was not available in those years.
7 Market-based emissions included in these values. Values rounded to nearest
thousand mtCO2e.
98AppendixEcosystemsWasteWaterCarbonOverview
Appendix D (continued)
Table 2
GHG emissions by type
FY17 FY18 FY19 FY20 FY21
(mt)
Scope 1
Scope 1 – CO2 82,448 81,263 95,667 96,700 94,292
Scope 1 – CH4 2 2 2 2 3
Scope 1 – N2O 1 1 1 1 1
Scope 1 – HFCs 23 17 20 19 27
Scope 1 – SF6
9
0 0 0 0
Scope 2 (Location-Based)
Scope 2 – CO2 2,684,866 2,929,720 3,537,892 4,079,782 4,720,190
Scope 2 – CH4 64 188 222 271 318
Scope 2 – N2O 37 39 47 53 57
Scope 2 (Market-Based)
Scope 2 – CO2 138,411 182,313 273,900 226,933 163,354
Scope 2 – CH4 3 12 17 15 6
Scope 2 – N2O 2 2 4 3 1
(mtCO2e)
Scope 1 107,451 99,009 117,956 118,100 123,704
Scope 1 – CO2 82,448 81,263 95,667 96,700 94,292
Scope 1 – CH4 45 45 50 53 63
Scope 1 – N2O 248 261 256 236 150
Scope 1 – HFCs 24,710 17,408 21,951 21,070 29,177
Scope 1 – SF6
8
– 32 32 41 22
Scope 2 (Location-Based) 2,697,554 2,946,043 3,557,518 4,102,445 4,745,197
Scope 2 – CO2 2,684,866 2,929,720 3,537,892 4,079,782 4,720,190
Scope 2 – CH4 1,605 4,700 5,550 6,768 7,942
Scope 2 – N2O 11,083 11,623 14,076 15,895 17,065
Scope 2 (Market-Based) 139,066 183,329 275,420 228,194 163,935
Scope 2 – CO2 138,411 182,313 273,900 226,933 163,354
Scope 2 – CH4 84 293 430 377 150
Scope 2 – N2O 571 723 1,090 884 431
8 In FY18 the estimating of SF6
leakage at datacenters began.
Table 3
GHG emissions by region (mtCO2e)
FY17 FY18 FY19 FY20 FY21
Scope 1
Asia 9,699 6,483 7,330 8,650 9,664
Europe, Middle East, Africa 44,873 41,276 57,957 61,719 69,251
Latin America 6,260 6,173 3,919 3,871 4,403
North America 46,620 45,076 48,750 43,860 40,386
Subtotal 107,452 99,008 117,956 118,100 123,704
Scope 2 (Location-Based)
Asia 439,035 528,277 691,772 804,567 942,892
Europe, Middle East, Africa 399,194 519,058 681,743 860,858 866,689
Latin America 20,968 23,450 25,403 15,707 16,204
North America 1,838,357 1,875,258 2,158,600 2,421,313 2,919,412
Subtotal 2,697,554 2,946,043 3,557,518 4,102,445 4,745,197
Scope 2 (Market-Based)
Asia 121,930 174,533 266,725 219,416 157,841
Europe, Middle East, Africa 14,460 7,301 7,463 7,376 5,353
Latin America 2,053 751 632 594 433
North America 623 744 600 808 308
Subtotal 139,066 183,329 275,420 228,194 163,935
99Overview Carbon Water Waste Ecosystems Appendix
Appendix D (continued)
Table 4
GHG emissions intensity (mtCO2e/Revenue M$)
FY17 FY18 FY19 FY20 FY21
Revenue (M$) 96,571 110,360 125,843 143,015 168,088
Scope 1 1.1 0.9 0.9 0.8 0.7
Scope 2 (Location-Based) 27.9 26.7 28.3 28.7 28.2
Scope 2 (Market-Based) 1.4 1.7 2.2 1.6 1.0
Scope 1 + 2 (Location-Based) 29.0 27.6 29.2 29.5 29.0
Scope 3 (Business Travel) 4.3 4.2 3.8 2.3 0.1
Table 5
Carbon offsets (mtCO2e)
FY17 FY18 FY19 FY20 FY21
GHG Emissions within Carbon Neutral
Boundary
9,10
573,871 652,282 781,345 612,927 292,106
Offsets Applied to Reporting Year 573,871 652,282 781,345 612,927 292,106
Net GHG Emissions within
Carbon Neutral Boundary
10
– – – – –
Total Removal Offsets Contracted
11
1,391,187
9 Represents the values prior to historic recalculations due to acquisitions and methodology changes.
10 This data supports Microsoft's ongoing target to be carbon neutral every year from fiscal year 2013 onward. The boundary for
this carbon neutral commitment includes global Scope 1, Scope 2 Market-based, and Scope 3 business air travel. As progress
is made towards the carbon negative commitment, which includes purchasing removal offsets, the commitment to carbon
neutrality will also be maintained.
11 Values reported represent offsets contracted. Contracted removal values only include removal credits that have been
evaluated as compliant with Microsoft’s quality removal criteria. This number might change based on contract fulfillment.
100AppendixEcosystemsWasteWaterCarbonOverview
Appendix D (continued)
1.2 Energy
Table 6
Energy consumption within the organization (MWh)
FY17 FY18 FY19 FY20 FY21
Total Energy Consumption
12
6,756,779 7,781,383 9,249,361 10,757,166 13,481,863
Non-renewable fuel consumed 362,408 358,760 439,589 449,304 446,417
Natural Gas 107,687 110,863 196,644 218,557 249,443
Crude Oil/Diesel 164,324 152,915 152,034 147,297 143,370
LPG/Propane/Jet Fuel 43,402 50,378 47,437 40,450 4,245
Gasoline 46,996 44,604 43,474 43,000 49,359
Electricity, heating, cooling, and steam 6,394,370 7,422,624 8,809,772 10,307,861 13,035,446
Electricity 6,344,700 7,357,636 8,744,834 10,244,377 12,969,393
Cooling (Chilled water) 30,121 52,775 52,937 51,026 54,953
Hot water/Steam 19,549 12,213 12,001 12,458 11,100
Total Renewable Electricity Consumption
13
6,104,758 7,357,636 8,744,834 10,244,377 12,969,393
Renewable Energy Credits and
Power Purchase Agreements
6,104,340 7,357,235 8,744,247 10,244,059 12,969,246
On-Site Renewable Energy 418 400 587 318 147
Percentage of Renewable Electricity 96% 100% 100% 100% 100%
12 Only reported categories and values are applicable to Microsoft's energy consumption. Renewable fuels, electricity sold,
heating sold, cooling sold, and steam sold categories are currently not applicable. In gigajoules, total energy consumption
equals 48,534,706 GJ, and total fuel consumed equals 1,607,101 GJ.
13 Reported values represent Microsoft's total renewable energy consumption expressed in MWh from on-site, renewable energy
credits, and power purchase agreements (PPAs). Specific to PPAs, in FY21 new agreements for approximately 5.8 gigawatts
(GW) of capacity were signed, totaling more than 8 GW of renewable energy via PPAs or long-term contracts.
Table 7
Energy intensity (MWh/Revenue M$)
FY17 FY18 FY19 FY20 FY21
Electricityconsumedwithintheorganization(MWh) 6,344,700 7,357,636 8,744,834 10,244,377 12,969,393
Revenue (M$) 96,571 110,360 125,843 143,015 168,088
Electricity Consumption Normalized by
Revenue (MWh/M$)
66 67 69 72 77
101AppendixEcosystemsWasteWaterCarbonOverview
Appendix D (continued)
1.3 Water
Table 8
Water and effluents (megaliters)14
FY17 FY18 FY19 FY20 FY21
Total Water Withdrawals
15
5,148 6,719 7,505 7,618 7,657
Third-party water 5,040 6,586 7,367 7,513 7,600
Surface Water 91 104 104 89 41
Ground Water 17 29 34 16 16
Total Water Discharges
15, 16
3,236 3,393 3,559 3,651 3,179
Third-party water 3,236 3,393 3,559 3,651 3,179
Total Water Consumption
15
1,913 3,326 3,946 3,967 4,478
14 In FY18 the water data collection methodology was adjusted to include more accurate data center withdrawal estimates.
FY17 withdrawal estimates were not retroactively adjusted. 50% of the change from FY17 to FY18 is from the methodology
adjustment, and the other 50% is from organizational growth. For FY21 total water withdrawal from areas with water stress
was 1,698 ML (22%) and was primarily sourced from third-party water; total water discharge to areas with water stress was
915 ML (29%); and total water consumption from areas with water stress was 783 ML (17%). Water risk assessment conducted
using WRI’s Aqueduct tool and reported values consider high or extremely high baseline water stress.
15 Brackish surface water/seawater and produced water categories are not relevant to Microsoft since there is no withdrawal
or discharge of water from and to these sources. For withdrawals, data breakdown between ‘freshwater’ and ‘other
water’ categories, and withdrawal sources is currently unavailable and will be part of data improvements going forward.
For consumption, gathering data around water storage will also be part of our future data improvements.
16 Only discharges to third-parties are relevant since water that is not consumed at Microsoft sites is discharged to local municipal
treatment plants. Discharges to surface water, groundwater, seawater and volume sent for use to other organizations are not
applicable. For discharges, data breakdown between ‘freshwater’ and ‘other water’ categories is currently unavailable and will
be part of data improvements going forward. Primary treatment of water is not relevant because there are no onsite water
treatment plants in Microsoft operations, as there is no requirement to conduct onsite primary treatment of discharge by any
environmental regulation or standard.
102AppendixEcosystemsWasteWaterCarbonOverview
Appendix D (continued)
1.4 Waste
Table 9
Waste generated, diverted, and directed to disposal (metric tons)17
FY17 FY18 FY19 FY20 FY21
Non-Hazardous 23,870 17,661 31,644 31,101 20,768
Diverted
Reused 325 40 715 1,136 2,171
Recycled 14,955 9,824 10,460 8,452 9,589
Composted 5,920 5,883 8,358 10,104 1,776
Subtotal 21,200 15,747 19,533 19,691 13,536
Directed
to Disposal
Landfilled 2,044 1,599 11,713 10,848 6,957
Incinerated
18
626 316 398 562 275
Subtotal 2,671 1,915 12,111 11,410 7,232
Hazardous 2,188 1,405 14,534 9,469 1,750
Diverted
Recycled 2,122 1,376 6,184 7,581 1,742
Reused – – 1,096 1,880 0
Directed to Disposal Other
19
66 29 7,254 8 8
Diverted Subtotal 23,322 17,123 26,813 29,152 15,278
Directed to Disposal Subtotal 2,737 1,944 19,365 11,418 7,240
Total waste generated 26,059 19,066 46,178 40,570 22,518
17 Starting in FY19, reported values encompass global data across Microsoft's direct waste footprint, including estimates where
needed, except for waste from construction and deconstruction and GitHub which is currently not reported and will be part
of data improvements going forward. Waste generation values and classifications have been updated for FY19 and FY20 to
be consistent with data collection, reporting boundary, and estimation methodology improvements established in FY21.
Reported data back to FY19 was adjusted to represent waste streams only within Microsoft’s operational control boundary, and
as such, properly exclude disposition of packaging from our sold products. Data for reuse or other diversion methods besides
recycling for hazardous waste, and other disposal operations besides landfilled and incineration for non-hazardous waste is
currently not applicable and will be part of data improvements going forward if they become applicable. As waste accounting
continues to improve, reported values may change. Reported waste data is mainly directed for disposal offsite.
18 Incinerated category under non-hazardous includes incineration with and without energy recovery.
19 'Other' category under hazardous includes landfilled and incinerated with and without energy recovery waste.
1.5 Ecosystems
Table 10
Land protection
FY21
Total size and country location of all habitat areas
selected for protection for which contributions
were made
US: 4,998 acres
Belize: 12,270 acres
A description of partnerships for which contributions
were made that exist with third parties to protect
habitat areas
Since making this commitment in April 2020, Microsoft
identified two leading land protection organizations,
the National Fish and Wildlife Foundation (NFWF)
within the United States and The Nature Conservancy
(TNC) globally, to partner with to achieve the
commitment to protect more land than we use. A
data-informed approach to identify ecosystems most
at risk was used, using TNC’s last chance ecosystem
framework and NFWF’s national landscape
conservation framework.
Within each of the two partnerships the following
organizations will hold the conservation easement/
own the protected land:
• The Nature Conservancy: Belize Maya Forest Trust
• National Fish and Wildlife Foundation: Montana
Department of Fish, Wildlife, and Parks; New Mexico
Land Conservancy, Rocky Mountain Elk Foundation
for the US.
Total acres categorized by the status at the close of the
reporting period as either (i) funded or (ii) protected
17,268 acres (funded)
Period in which funding occurred As of the fiscal year ended June 30, 2021
103AppendixEcosystemsWasteWaterCarbonOverview
1.6 Management’s assertion
Management of Microsoft Corporation is responsible
for the completeness, accuracy, and validity of the
disclosures included in this Section 1 of Appendix D.
Management is also responsible for the collection,
quantification, and presentation of the specified
information included in Section 1 of Appendix D and
for the selection or development of the criteria, which
management believes provides an objective basis for
measuring and reporting on the specified information.
Management of Microsoft Corporation asserts that the
specified information included in Section 1 of Appendix
D as of, and for the fiscal year ended June 30, 2021 is
presented in accordance with the criteria set forth in
Section 1.10, Reporting criteria.
1.7 Description of the company
and inventory boundary
Microsoft’s environmental sustainability data, which
includes GHG emissions, energy, waste, water, and
ecosystem metrics, reported for FY21 has been
prepared following a fiscal year basis as the reporting
period covering the timeframe of July 1, 2020 to
June 30, 2021. The Corporate External & Legal Affairs
(CELA) Sustainability team within Microsoft under the
leadership of the Vice President and Chief Environmental
Officer holds the responsibility to monitor and report
sustainability environmental data.
For setting organizational boundaries and for corporate
reporting of GHG emissions, energy, waste, and
water metrics in Tables 1-9 above, Microsoft uses the
operational control approach. This includes global
wholly owned and partially owned subsidiaries over
which Microsoft has management and operational
control, including Microsoft owned and leased real
estate facilities.
Appendix D (continued)
1.8 Information on metrics
Microsoft announced in January 2020 that they will be
carbon negative by 2030 and by 2050 they will remove
from the atmosphere an equivalent amount of all the
carbon the company has emitted either directly or by
our electricity consumption since being founded in 1975.
This will be achieved by reducing Scope 3 emissions
(market-based) by more than half; and by reducing Scope
1 and 2 (market-based) emissions to near zero by the
middle of the decade through energy efficiency work
and reaching 100 percent renewable energy by 2025.
The baseline year is 2020, which was the year when the
announcement was made.
Microsoft has a metrics recalculation policy for
historical data (including base year) to ensure
consistency whenever year-over-year structural
changes, methodological changes , or other accuracy
improvements are significant. Structural changes include
acquisitions and divestitures. Methodology changes
include changes in a calculation methodology or new
activity types. Accuracy improvements include the
correction of significant errors or cumulative small errors
that together are significant and/or updates to available
supplier reported data. Footnotes under each table will
highlight specific adjustments made.
Microsoft’s GHG inventory includes five of the seven
GHGs addressed by the Kyoto Protocol—carbon
dioxide (CO2), methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), and sulfur hexafluoride
(SF6). Microsoft does not currently use or emit
perfluorocarbons (PFCs) and nitrogen trifluoride (NF3).
The following is a more detailed list of activities included
in the GHG inventory:
• Scope 1 direct GHG emissions from onsite fossil
fuel combustion (including natural gas, propane,
fuel oil, and diesel), executive air travel, ground
transportation (Microsoft owned and directly leased),
hydrofluorocarbon (HFC) refrigerants, and SF6 used at
some facilities.
• Scope 2 indirect GHG emissions from purchased
electricity, chilled water, and steam. The locationbased
method is based on average emission factors
for the electricity grids that provide electricity to our
datacenters, buildings, and campuses. The marketbased
method includes consideration of contractual
arrangements under which Microsoft procures power
from specific suppliers or sources, such as renewable
energy. In the market-based method, we also capture
the impact from direct renewable energy and the
purchase of unbundled energy attribute certificates
(EACs).
• Scope 3 indirect GHG emissions for the following
categories identified as relevant for Microsoft:
– Category 1 – Purchased Goods & Services
– Category 2 – Capital Goods
– Category 3 – Fuel- and Energy-Related Activities
(Location-Based and Market-Based)
– Category 4 – Upstream Transportation
– Category 5 – Waste
– Category 6 – Business Travel
– Category 7 – Employee Commuting
– Category 9 – Downstream Transportation
– Category 11 – Use of Sold Products
– Category 12 – End of Life of Sold Products
– Category 13 – Downstream Leased Assets
Reported data for water, waste, and ecosystems support
the monitoring and tracking of our progress associated
with the commitments under each program.
For carbon removal, the following Microsoft criteria
is used to select carbon removals that we contract:
Microsoft Criteria for High-Quality Carbon Dioxide
Removal. Both third-party certified and uncertified
tons are purchased in an effort to help develop the
market, and only certified tons are applied to the
carbon neutrality scope (Scope 1, Scope 2 marketbased,
and business air travel). For the certified portion,
the following validation and verification bodies have
provided the certification: Voluntary Carbon Standard
(VCS), American Carbon Registry (ACR), Climate Action
Reserve (CAR), and California Air Resources Board (CARB).
The reported carbon removal contracted value total also
includes future tons that have not yet been delivered.
For renewable energy, the impact is captured from
on-site generation, renewable energy certificates
(RECs) and from power purchase agreements (PPAs).
The purchases of RECs include: RECs (Green-e certified),
guarantees of origin (GO), renewable energy guarantees
of origin (REGO), I-RECs, tradable instrument for
global renewables (TIGR), J-Credits, large scale energy
certificates (LGC) and PowerPlus. Microsoft procures
enough renewable energy to match 100% of its electricity
consumption. In the case that renewable energy is not
procured in the markets where they operate, enough
renewable energy from nearby markets is purchased
to ensure we maintain the 100% renewable electricity
commitment is maintained.
Microsoft’s water inventory includes the withdrawal,
consumption, and discharge associated with assets under
its operational control. These volumes represent global
enterprise-wide operations including offices, datacenters,
labs, and retail. This data supports progress tracking
against current Water Positive program commitments, as
well as future reporting against the newer commitment
announced in October 2021 of reducing water waste in
datacenter operations by 95 percent by 2024.
104Overview Carbon Water Waste Ecosystems Appendix
Appendix D (continued)
Similarly, the waste inventory includes the mass of waste
generated from operations within Microsoft’s operational
control that are landfilled, incinerated, recycled, reused,
and composted for both non-hazardous and hazardous
categories. This waste inventory supports progress
tracking against the commitment of diverting 90% of
operational waste at datacenters and campuses.
Reported data for ecosystems includes the total area of
land that has been funded and protected based on the
presented definition in table 1.10 for reporting criteria.
Microsoft’s land protection commitment was established
in FY20 therefore reported data for FY21 represents
progress for the first year.
Currently the waste inventory does not include waste
from construction and deconstruction activities.
Reported operational waste does not include impact
from business group GitHub. Data across metrics
currently excludes impact from the ZeniMax acquisition
completed in March 2021. Both GitHub and ZeniMax
impacts are estimated to be under the significance
threshold and will be included in the next report.
These items are part of Microsoft’s continuous data
improvement activities and will be included and
highlighted accordingly in the next reporting cycle.
1.9 Methodology and emission factors
Carbon
Scope 1 and 2
Primary data is used to calculate emissions for both
Scope 1 and 2 emissions. Estimates are used where
primary data is not available. Activity data is collected
internally and stored in an internally developed data
platform which then applies the corresponding emission
factors to calculate emissions. Microsoft uses the IPCC
Fourth Assessment when it comes to applying global
warming potential values.
Scope and source Emission factor source
Scope 1 (all fuels) EPA Emission Factor Hub. March 2018.
Scope 2
Electricity (US)
Year 2019 eGRID Subregion Emission Factors: eGRID 2019, February 2021. For marketbased
emissions the factors presented are used as needed. For regions where
residual emission factors are available we have 100% renewable energy purchases,
therefore not currently applicable.
Scope 2
Electricity (international
unless otherwise sourced)
IEA (2021), Emission Factors
Scope 2
Electricity (Australia)
Year 2020 factors from “Table 46: Scope 2 and 3 emissions factors - consumption
of purchased electricity by end users”, emission factors for Scope 2. National
Greenhouse Gas Accounts (NGA) Factors, August, 2021.
Scope 2
Electricity (Brazil)
Year 2020 factors from the Brazilian Ministry of Science, Technology, Innovation
and Communication: Fator médio - Inventários corporativos.
Scope 2
Electricity (Canada)
National inventory report 1990-2019. Annex 13. Year 2019 factors. From 2021 release.
Scope 2
Electricity (India)
CO2: Baseline Carbon Dioxide Emission Database, Version 16.0. India Central
Electricity Authority. March 2021.
CH4/N2O: “CO2 Emissions from Fuel Combustion (2021 Edition).” IEA. Paris.
Scope 2
Electricity (UK)
2021 Government GHG Conversion Factors for Company Reporting: Methodology
Paper for Emission Factors. Year 2019 factors from June 2021 release.
105AppendixEcosystemsWasteWaterCarbonOverview
Scope 3 category Emissions calculation methodology
Scope 3
Microsoft calculates and reports Scope 3 emissions for
all relevant categories. The following table summarizes
which categories are relevant and a description of the
methodology and emission factors used.
Scope 3 category Emissions calculation methodology Supplierdata
percentage
Supplierdata
percentage*
*
Purchased goods
and services
This category includes emissions from upstream purchasing of goods and
services, including direct and indirect goods. Microsoft uses its suppliers’
CDP Supply Chain responses to determine Scope 1, Scope 2, and upstream
Scope 3 emission factors (mtCO2e/$ revenue). The latest available
responses are used, so this report's inventory considers 2021 submissions
(i.e. 2020 data). Microsoft estimates emissions from CDP Supply Chain
respondents by multiplying the CDP-derived factor by the annual spend
with the supplier. All other spend is mapped to corresponding industry
sectors and then multiplied by cradle-to-gate emission factors by sector
from UK Defra’s “UK Defra, Table 13 – Indirect emissions from the supply
chain. March 2014”—updated per the latest inflation and currency
conversion rates. Corporate-wide expense data for all company divisions is
obtained from the finance department. Industry sectors already included
in Scope 1 and Scope 2 (such as electricity purchases) and other Scope 3
categories (such as capital goods) were removed to prevent double
counting. Global warming potentials (GWP) values are derived from the
underlying CDP Supply Chain-based responses and Defra data sources.
79
Capital goods This category includes emissions from upstream purchasing of capital
goods, including server equipment and other long-term assets. Microsoft
uses its suppliers' CDP Supply Chain responses to determine Scope 1, Scope
2, upstream Scope 3 emission factors (tCO2e/$ revenue). The latest
available responses are used, so this report’s inventory considers 2021
submissions (i.e. 2020 data). Microsoft estimates emissions from CDP
Supply Chain respondents by multiplying the CDP-derived factor by the
annual spend with the supplier. All other spend is mapped to
corresponding industry sectors and then multiplied by cradle-to-gate
emission factors by sector from UK Defra’s "UK Defra, Table 13 – Indirect
emissions from the supply chain. March 2014"—updated per the latest
inflation and currency conversion rates. Corporate-wide expense data for
all company divisions is obtained from the finance department. Industry
sectors already included in Scope 1 and Scope 2 (such as electricity
purchases) and other Scope 3 categories were removed to prevent double
counting. GWP values are derived from the underlying CDP Supply
Chain-based responses and Defra data sources.
45
Appendix D (continued)
* Represents the percentage of emissions calculated (by category) using data obtained from suppliers or value chain partners.
Scope 3 category Emissions calculation methodology Supplierdata
percentage*
Purchased goods
and services
This category includes emissions from upstream purchasing of goods and
services, including direct and indirect goods. Microsoft uses its suppliers’
CDP Supply Chain responses to determine Scope 1, Scope 2, and upstream
Scope 3 emission factors mtCO2e/$ revenue). The latest available
responses are used, so this report's inventory considers 2021 submissions
(i.e. 2020 data). Microsoft estimates emissions from CDP Supply Chain
respondents by multiplying the CDP-derived factor by the annual spend
with the supplier. All other spend is mapped to corresponding industry
sectors and then multiplied by cradle-to-gate emission factors by sector
from UK Defra’s “UK Defra, Table 13 – Indirect emissions from the supply
chain. March 2014”—updated per the latest inflation and currency
conversion rates. Corporate-wide expense data for all company divisions is
obtained from the finance department. Industry sectors already included
in Scope 1 and Scope 2 (such as electricity purchases) and other Scope 3
categories (such as capital goods) were removed to prevent double
counting. Global warming potentials (GWP) values are derived from the
underlying CDP Supply Chain-based responses and Defra data sources.
79
106
(
Overview Carbon Water Waste Ecosystems Appendix
Scope 3 category Emissions calculation methodology
Appendix D (continued)
Scope 3 category Emissions calculation methodology Supplierdata
percentage*
Fuel-and-energyrelated
activities (not
included in Scope 1 or 2)
Starting in 2019, Microsoft has been reporting this category as calculated
using the 'market-based' approach, which includes Microsoft’s
investment in renewable electricity. Fuel- and energy-related activities
(not included in Scope 1 or 2) include three emission sources. First,
upstream emissions of purchased electricity were calculated by
multiplying electricity use by emission factors from lifecycle analysis tools
for the US and UK Defra 2015 Guidelines for non-US countries. Factors for
upstream emissions resulting from global renewable electricity
generation are from lifecycle assessment tools. Second, fuel consumption
was multiplied by emission factors from the GREET and Ecoinvent
lifecycle analysis tools. And third, transmission and distribution (T&D)
losses (by energy use type) were multiplied by emission factors from the
EPA’s eGRID2019 database for the United States and from IEA (2021)
emission factors for other countries. GWPs are from the IPCC Fourth
Assessment Report (AR4), 100-year average.
97
Upstream
transportation
and distribution
This category includes emissions from upstream transportation of goods,
including all transportation of goods that Microsoft finances. Microsoft
uses its suppliers' CDP Supply Chain responses to determine Scope 1, Scope
2, upstream Scope 3 emission factors (tCO2e/$ revenue). The latest
available responses are used, so this report’s inventory considers 2021
submissions (i.e. 2020 data). Microsoft estimates emissions from CDP
Supply Chain respondents by multiplying the CDP-derived factor by the
annual spend with the supplier. All other spend is mapped to
corresponding industry sectors and then multiplied by cradle-to-gate
emission factors by sector from UK Defra’s "UK Defra, Table 13 – Indirect
emissions from the supply chain. March 2014"—updated per the latest
inflation and currency conversion rates. Corporate-wide expense data for
all company divisions is obtained from the finance department. Industry
sectors already included in Scope 1 and Scope 2 (such as electricity
purchases) and other Scope 3 categories were removed to prevent double
counting. GWP values are derived from the underlying CDP Supply
Chain-based responses and Defra data sources.
81
Waste generated
in operations
The waste figure represents emissions from waste disposed via
landfilling, incineration, recycling, and compost. Emissions from waste
are calculated using methodologies and emission factors from the EPA’s
Waste Reduction Model (WARM), version 15. This model bases its
emissions calculations on a lifecycle analysis, including emissions from
the long-term decomposition of waste in a landfill or from upstream
sources/sinks. GWPs are from the IPCC Fourth Assessment Report (AR4),
100-year average.
37
Business travel Historically, this category has included emissions from commercial air
travel only. FY20 (reporting year) was the first year that additional
business travel emissions sources were included, including hotel night
stays, rail travel, reimbursed mileage, rental cars, and taxi/rideshares. For
commercial air and rail travel, Microsoft Corporate Travel provides flight/
ride-level airport codes and cabin class data. The airport/rail station
codes are used to calculate distances to determine whether the flights/
rides were short, medium, or long haul. Using the distance-based
method, flight distances and cabin class are used to calculate CO2e
emissions, using the appropriate emission factors from: 2020 Guidelines
to Defra/DECC's GHG Conversion Factors for Company Reporting).
For hotel night stays, Microsoft's preferred hotel vendors provided
emissions per hotel night stay coefficients. For other hotel chains,
emissions were estimated based on nights stayed and the emission
factors from the EPA's Greenhouse Gas Inventory Guidance: Indirect
Emissions from Events and Conferences (Dec 2018). For rental cars,
mileage, fuel, and emission data was provided from each rental car
company. For taxi/rideshare and reimbursed mileage, emissions were
estimated based on spend using emission factors from EPA Emission
Factor Hub. March 2018. GWPs are from the IPCC Fourth Assessment
Report (AR4), 100-year average.
64
* Represents the percentage of emissions calculated (by category) using data obtained from suppliers or value chain partners.
Supplierdata
percentage*
107AppendixEcosystemsWasteWaterCarbonOverview
Scope 3 category Emissions calculation methodology Supplierdata
percentage*
Employee commuting This category captures emissions from commuting by all employees and
contractors that work in Microsoft buildings. Microsoft conducted a
survey in May 2019 to capture detailed commuting habits from
employees and vendors at our Puget Sound campus, representing ~36%
of global Microsoft headcount. The survey is typically conducted
annually but was not performed in 2021. The results were scaled to
estimate global commuting emissions for Microsoft. CO2 emission rates
for passenger vehicles (single occupancy vehicle [SOV] and carpool) are
based on fuel consumption and miles travelled. A weighted average fuel
economy using the 2012 EPA Fuel Economy Trends Report 1975–2012 was
derived, which provides combined fuel economy for cars and trucks by
year, and a set of car and truck age fractions provided by the Puget
Sound Regional Council. This data was used to develop a weighted
average fuel economy for the Puget Sound area. Emission factors are
derived from the Inventory of US. Greenhouse Gas Emissions and Sinks:
1990–2010, Annex 2 (Methodology for estimating CO2 emissions from
fossil fuel combustion). CO2 rates per passenger mile are based on
Federal Transit Administration, 2010 (Public Transportation’s Role in
Responding to Climate Change, US DOT, Federal Transit Administration,
January 2010). GWPs are from the IPCC Fourth Assessment Report (AR4),
100-year average. As nearly all Microsoft employees worked from home
during the COVID-19 pandemic, FY20 was the first year to include
emission impacts from telework. Telework energy consumption is
assumed to include workstation/plug-load energy usage, additional
lighting and household cooling/heating consumption. 1 laptop,
2 monitors and 3 lightbulbs are assumed for each employee; other
assumptions include 8 work hours/day and 250 days/year using the
devices. Office/workspace floor area and cooling/heating intensity are
assumed based on EIA’s 2015 Residential Energy Consumption Survey
(RECS) data. From these assumptions, a carbon emission intensity per
employee is calculated, and total emissions are calculated by multiplying
the intensity by number of employees during the period of remote work.
10 Upstream leased assets
Appendix D (continued)
Scope 3 category Emissions calculation methodology
Not relevant. Microsoft includes leased assets in our Scope 1 and Scope 2
emissions reporting boundary.
Downstream
transportation
and distribution
Included in this category are the emissions from transporting and
warehousing of devices Microsoft sold (including, but not limited to,
Xbox devices, Microsoft Surface devices, HoloLens, keyboards, mice, and
other peripherals) from Microsoft manufacturing sites to retailers and
customers. Calculations are based on standard assumptions of distance
between retailers and their distribution centers and warehouse
floorspace from an MWPVL International analysis of Walmart’s
distribution center network. Assumptions about the energy intensity of
warehouses come from the US Energy Information Administration (EIA)’s
Commercial Buildings Energy Consumption Survey (2012). Emission
factors for shipping come from the GaBi database. GWPs are from the
IPCC Fourth Assessment Report (AR4), 100-year average.
0
Processing of sold
products
Not relevant. Microsoft did not have any physical intermediate products
in the years reported.
Use of sold products Included in this category is the lifetime electricity use of devices Microsoft
sold including, but not limited to, Xbox devices, Surface devices, HoloLens,
keyboards, mice, and other peripherals. Lifetime electricity use per device is
calculated based on standard product-use assumptions as included in our
ISO 14040– and ISO 14044–compliant lifecycle analyses. This year updates
to energy use assumptions that reflect latest understanding of device use
via telemetry data are also included. Assumptions on total lifetime expected
use (years) are used. Sales geography for the products sold is used to
determine the electricity emission factor used to calculate emissions. GWPs
are from the IPCC Fourth Assessment Report (AR4), 100-year average.
0
End of life treatment of
sold products
Included in this category is the end-of-life treatment of devices Microsoft
sold during the reporting year including, but not limited to, Xbox devices,
Surface devices, HoloLens, keyboards, mice, and other peripherals.
End-of-life emissions for each product are based on modeling within our
ISO 14040– and ISO 14044–compliant lifecycle analyses. To generate an
estimate for this category, the model assumes that all devices are sent to
landfills at the end of their useful life. GWPs are from the IPCC Fourth
Assessment Report (AR4), 100-year average.
0
* Represents the percentage of emissions calculated (by category) using data obtained from suppliers or value chain partners.
Supplierdata
percentage*
108AppendixEcosystemsWasteWaterCarbonOverview
Scope 3 category Emissions calculation methodology Supplierdata
percentage*
Downstream leased
assets
Emissions associated with sublets are calculated using the intensities
derived from data collected for the primary leased space (for example,
kilowatt-hours/square foot [kWh/SF]) and prorated for the square
footage of the sublet space. In this way, it is assumed that the emissions
intensities of the leased spaces are the same as the overall buildings in
which they reside. Estimated refrigerants are calculated using the same
methodology and intensity as used to calculate refrigerant intensities for
assets occupied by Microsoft. Electricity emission factors used are those
appropriate to each location, as utilized in our Scope 1 and Scope 2
location-based inventory. GWPs are from the IPCC Fourth Assessment
Report (AR4), 100-year average.
0
Franchises Not relevant. Microsoft did not operate franchises in the years reported.
Investments Not relevant for reported years. Joint ventures, actively managed
investments, and direct equity investments totaled less than 2 percent
of Microsoft’s market capitalization at the end of the reporting period.
Microsoft has not engaged in the long-term financing of projects
and the proceeds for each debt issuance have been for general
corporate purposes.
Appendix D (continued)
* Represents the percentage of emissions calculated (by category) using data obtained from suppliers or value chain partners.
109109Overview Carbon Water Waste Ecosystems Appendix
Appendix D (continued)
Water and Waste
Primary data is used to calculate water withdrawal,
discharge and consumption, and waste generation where
Microsoft operates. Estimates are used where primary
data is not available.
Water withdrawals are based on data from utility bills
from our largest sites and, in some cases, estimations.
An estimation methodology for sites where primary data
is unavailable that considers square footage, electricity
consumption, and cooling type is used. Where discharges
and consumption are not metered, amounts are estimated
annually as part of the global water inventory aggregation
process. Most of the sites do not have discharge meters.
A low water consumption at many of the sites is estimated,
unless there are specific water consuming activities present.
Where there is water consumption (such as for landscaping,
evaporative coolers, cooling towers, settling ponds), it is
estimated that discharge equals the difference between
withdrawals and consumption. Microsoft continues to work
on improvements for water consumption data collection.
Operational waste mass is based on data from invoices
and/or vendor/third party reports. In the absence of
actual data, there is an extrapolation methodology.
Depending on the type of site, the methodology
uses capacity (MW) based coefficients by region or
attendance to extrapolate waste for those locations
where primary data is unavailable. This year’s
extrapolation represents an improved methodology,
previously capacity based coefficients by equipment
technology type and floorspace were used.
All extrapolated waste is assumed to be landfilled in cases
where the disposal or diversion method is unknown.
The extrapolation excludes e-waste and is conservative
by making landfilled the default assumption for
disposition method. Year-over-year, waste data continues
to improve in that there is a continuous increase in the
amount of actual data used in the inventory.
110
1.10 Reporting criteria
The summary table below defines the criteria for each
specified metric included in Section 1 of Appendix
D. Management is also responsible for the selection
or development of the criteria, which management
believes provide an objective basis for measuring and
reporting on the specified information referenced in
the table below.
Area Specified Information Criteria Tables
Carbon
The Statement of GHG
Emissions
Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) and the Greenhouse
Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard published by the World
Resources Institute/World Business Council for Sustainable Development (collectively the “GHG Protocol”)
1, 2, 3, 4, 5
Energy consumption within
the organization
Disclosure 302-1: Energy consumption within the organization from the GRI Standard: 302 Energy 2016
6
Energy intensity Disclosure 302-3: Energy intensity from the GRI Standard: 302 Energy 2016 7
Energy
Microsoft-specified indicator:
100% Renewable
electricity disclosure
Management's Criteria: Total renewable electricity consumption in megawatt hours and the percentage of
renewable electricity.
Renewable electricity is defined as energy sources that are capable of being replenished in a short time through
ecological cycles or agricultural processes.
The scope of renewable electricity includes renewable electricity the entity directly produced and renewable
electricity the entity purchased, if purchased through a renewable PPA that explicitly includes RECs or GOs, a
Green-e Energy Certified utility or supplier program, or other green power products that explicitly include RECs or
GOs, or for which Green-e Energy Certified RECs are paired with grid electricity.
- For any renewable electricity generated on-site, any RECs and GOs must be retained (that is, not sold) and retired
or cancelled on behalf of the entity in order for the entity to claim them as renewable energy.
- For renewable PPAs and green power products, the agreement must explicitly include and convey that RECs
and GOs be retained or replaced and retired or cancelled on behalf of the entity in order for the entity to claim
them as renewable electricity.
- The renewable portion of the electricity grid mix that is outside of the control or influence of the entity is
excluded from the scope of renewable electricity.
The percentage renewable electricity is calculated as total renewable energy consumption in megawatt hours
divided by total electricity consumption (as disclosed in Disclosure 302-1(c)(i) Electricity consumption from the
GRI Standard: 302 Energy 2016).
6
AppendixEcosystemsWasteWaterCarbonOverview
Area Specified Information Criteria Tables
Water
Water withdrawal Disclosure 303-3: Water withdrawal from the GRI Standard: 303 Water and Effluents 2018 8
Water discharge Disclosure 303-4: Water discharge from the GRI Standard: 303 Water and Effluents 2018 8
Water consumption Disclosure 303-5: Water consumption from the GRI Standard: 303 Water and Effluents 2018 8
Waste
Waste generated Disclosure 306-3: Waste generated from the GRI Standard: 306 Waste 2020 9
Waste diverted from disposal Disclosure 306-4: Waste diverted from disposal from the GRI Standard: 306 Waste 2020 9
Waste directed to disposal Disclosure 306-5: Waste directed to disposal from the GRI Standard: 306 Waste 2020 9
Ecosystems
Microsoft-specified indicator:
Land Protection
Management’s criteria:
At the close of the reporting period,
a. The total size in acres and country location of all habitat areas selected for protection for which
contributions were made.
b. A description of partnerships for which contributions were made that exist with third parties
to protect habitat areas.
c. Total acres categorized by the status as either (i) funded or (ii) protected.
d. Period in which funding occurred.
Size of habitat areas is calculated as Microsoft’s contribution amount divided by the cost per acre of the habitat
protection project as determined by the partner organization. These amounts are net of overhead costs.
Funded is defined as where agreements have been signed and contributions have been made.
Protected is defined as areas that are legally designated as permanently protected by government regulation.
10
Appendix D (continued)
111AppendixEcosystemsWasteWaterCarbonOverview
1.11 INDEPENDENT ACCOUNTANT’S REVIEW REPORT Deloitte & Touche LLP
Suite 3300
925 Fourth Avenue
Seattle, WA 98104-1126
USA
To the Board of Directors of Microsoft Corporation
We have reviewed management of Microsoft Corporation’s (the “Company”) assertion that the specified information included in Section 1 of Appendix D of the accompanying 2021 Environmental Sustainability
Report (“Appendix D”) as of and for the fiscal year ended June 30, 2021 is presented in accordance with the criteria set forth in Section 1.10, Reporting criteria in Appendix D. The Company’s management is
responsible for its assertion. Our responsibility is to express a conclusion on management’s assertion based on our review.
Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA) in AT-C Section 105, Concepts Common to All Attestation
Engagements, and AT-C Section 210, Review Engagements. Those standards require that we plan and perform the review to obtain limited assurance about whether any material modifications should be
made to management’s assertion in order for it to be fairly stated. The procedures performed in a review vary in nature and timing from, and are substantially less in extent than, an examination, the objective
of which is to obtain reasonable assurance about whether management’s assertion is fairly stated, in all material respects, in order to express an opinion. Accordingly, we do not express such an opinion.
Because of the limited nature of the engagement, the level of assurance obtained in a review is substantially lower than the assurance that would have been obtained had an examination been performed.
We believe that the review evidence obtained is sufficient and appropriate to provide a reasonable basis for our conclusion.
We are required to be independent and to meet our other ethical responsibilities in accordance with the Code of Professional Conduct issued by the AICPA. We applied the Statements on Quality Control
Standards established by the AICPA and, accordingly, maintain a comprehensive system of quality control.
The procedures we performed were based on our professional judgment. In performing our review, we performed analytical procedures and inquiries. For a selection of the specified information included in
Appendix D, we performed tests of mathematical accuracy of computations, compared the specified information to underlying records, or observed the data collection process.
The preparation of the specified information included in Appendix D requires management to establish and interpret the criteria, make determinations as to the relevancy of information to be included, and
make estimates and assumptions that affect the reported information. Measurement of certain amounts includes estimates and assumptions that are subject to substantial inherent measurement uncertainty
resulting, for example, from accuracy and precision of conversion factors or estimation methodologies used by management. Obtaining sufficient, appropriate review evidence to support our conclusion does
not reduce the inherent uncertainty in the specified information included in Appendix D. The selection by management of different but acceptable measurement methods, input data, or assumptions, may
have resulted in materially different amounts or specified information being reported.
Information outside of the specified information included in Appendix D of the 2021 Environmental Sustainability Report was not subject to our review and, accordingly, we do not express a conclusion or any
form of assurance on such information. Further, any information relating to periods prior to the year-ended June 30, 2021 or information relating to forward looking statements, goals and progress against
goals, was not subject to our review and, accordingly, we do not express a conclusion or any form of assurance on such information.
Based on our review, we are not aware of any material modifications that should be made to management of Microsoft Corporation’s assertion that the specified information included in Section 1 of Appendix
D of the accompanying 2021 Environmental Sustainability Report as of and for the fiscal year ended June 30, 2021 is presented in accordance with the criteria set forth in Section 1.10, Reporting criteria in
Appendix D, in order for it to be fairly stated.
Appendix D (continued)
March 10, 2022
112Overview Carbon Water Waste Ecosystems Appendix
Section 2:
Additional
environmental
metrics
Table 11
GHG emissions—Scope 1 regional detail (mtCO2e)
FY17 FY18 FY19 FY20 FY21
Scope 1 – CO2 82,448 81,263 95,667 96,700 94,292
Scope 1 – CH4 45 45 50 53 63
CH4 Emissions – Asia 5 4 3 4 4
CH4 Emissions – Europe, Middle East, Africa 16 15 26 28 36
CH4 Emissions – Latin America 9 9 5 5 6
CH4 Emissions – North America 16 17 16 16 17
Appendix D (continued)
113AppendixEcosystemsWasteWaterCarbonOverview
Table 12
Other emissions (metric tons)
FY17 FY18 FY19 FY20 FY21
NOx Emissions 223 209 215 202 284
NOx Emissions – Asia 13 6 7 7 7
NOx Emissions – Europe, Middle East, Africa 152 145 144 137 226
NOx Emissions – Latin America 25 24 16 16 35
NOx Emissions – North America 33 34 49 41 16
SOx Emissions 13 13 12 12 18
SOx Emissions – Asia 2 1 1 1 2
SOx Emissions – Europe, Middle East, Africa 7 7 7 7 11
SOx Emissions – Latin America 1 1 1 1 2
SOx Emissions – North America 3 3 4 4 4
VOC Emissions 199 184 185 170 248
VOC Emissions – Asia 10 3 5 5 4
VOC Emissions – Europe, Middle East, Africa 148 141 133 124 208
VOC Emissions – Latin America 24 23 15 16 35
VOC Emissions – North America 17 16 32 26 2
PM Emissions 7 7 8 8 11
CO Emissions 1,860 1,704 1,721 1,584 2,392
Ozone Depleting Substances 1 1 1 0 0
Appendix D (continued)
Table 13
Other emissions normalized by revenue (metric tons/M$)
FY17 FY18 FY19 FY20 FY21
NOx Emissions 0.0023 0.0019 0.0017 0.0014 0.0017
SOx Emissions 0.00014 0.00011 0.00010 0.00009 0.00011
CH4 Emissions 0.0005 0.0004 0.0004 0.0004 0.0004
Table 14
Electricity consumption (MWh)
FY17 FY18 FY19 FY20 FY21
Total Electricity Consumed 6,344,700 7,357,636 8,744,834 10,244,377 12,969,393
Electricity Consumed – Asia 682,713 804,024 1,066,033 1,225,534 1,473,254
ElectricityConsumed – Europe,MiddleEast,Africa 971,073 1,265,961 1,654,384 2,102,486 2,801,332
Electricity Consumed – Latin America 90,929 106,936 117,222 113,456 174,762
Electricity Consumed – North America 4,599,985 5,180,715 5,907,195 6,802,901 8,520,045
Non-Renewable Electricity Purchased
& Consumed – Asia
204,937 – – – –
Non-Renewable Electricity Purchased
& Consumed – Europe, Middle East, Africa
17,391 – – – –
Non-Renewable Electricity Purchased
& Consumed – Latin America
3,603 – – – –
Non-Renewable Electricity Purchased
& Consumed – North America
– – – – –
Non-Renewable Electricity by Source – Coal 42,746 – – – –
Non-Renewable Electricity by Source – Petroleum 34,058 – – – –
Non-RenewableElectricitybySource – NaturalGas 148,643 – – – –
Non-Renewable Electricity by Source – Nuclear 484 – – – –
114AppendixEcosystemsWasteWaterCarbonOverview
Appendix D (continued)
Table 15
Renewable energy consumption (MWh)
FY17 FY18 FY19 FY20 FY21
Renewable Energy Purchased
& Consumed – Asia
466,243 804,024 1,066,033 1,225,534 1,473,254
Renewable Energy Purchased
& Consumed – Europe, Middle East, Africa
941,343 1,265,961 1,654,384 2,102,486 2,801,332
Renewable Energy Purchased
& Consumed – Latin America
85,935 106,936 117,222 113,456 174,762
Renewable Energy Purchased
& Consumed – North America
4,611,239 5,180,715 5,907,195 6,802,901 8,520,045
Renewable Energy Purchased
& Consumed – Wind
5,974,762 6,919,601 7,742,416 8,588,040 10,761,621
Renewable Energy Purchased
& Consumed – Landfill Gas
– – – – –
Renewable Energy Purchased
& Consumed – Biomass
61,029 47,129 2,347 – 22
Renewable Energy Purchased
& Consumed – Hydro
33,174 186,434 309,873 440,834 289,996
Renewable Energy Purchased
& Consumed – Geothermal
– 72,000 461,586 409,511 1,069
Renewable Energy Purchased
& Consumed – Solar
35,795 132,472 228,612 805,992 1,916,686
Table 16
Other energy consumption (MWh)
FY17 FY18 FY19 FY20 FY21
Total Non-Renewable Energy Purchased
& Consumed
412,078 423,748 504,527 512,788 512,470
Non-Renewable Energy Purchased
& Consumed – Asia
34,096 20,440 21,975 24,877 26,712
Non-Renewable Energy Purchased
& Consumed – Europe, Middle East, Africa
187,087 177,234 266,221 287,890 324,329
Non-Renewable Energy Purchased
& Consumed – Latin America
23,996 23,239 13,977 13,906 15,151
Non-Renewable Energy Purchased
& Consumed – North America
166,899 202,835 202,354 186,116 146,277
Fuel and Energy related activities
(Transmission and Distribution Losses)
510,000 600,000 730,000 850,000 750,000
Downstream Leased Assets 1,700 4,100 1,900 19,500 50,398
115AppendixEcosystemsWasteWaterCarbonOverview
Table 17
Water withdrawal, consumption, and discharge detail (megaliters)20
FY17 FY18 FY19 FY20 FY21
Total Water Withdrawal 5,148 6,719 7,505 7,618 7,657
Water Withdrawals – Asia 973 1,244 1,482 1,533 1,841
Water Withdrawals – Europe, Middle East, Africa 711 851 1,116 1,434 1,170
Water Withdrawals – Latin America 93 115 114 109 179
Water Withdrawals – North America 3,372 4,509 4,793 4,543 4,467
Total Water Consumption 1,913 3,326 3,946 3,967 4,478
Water Consumption – Asia 422 617 824 933 1,129
Water Consumption – Europe, Middle East, Africa 190 383 524 698 614
Water Consumption – Latin America 27 66 71 73 125
Water Consumption – North America 1,275 2,259 2,527 2,262 2,610
Water Consumption - Third-party 1,885 3,292 3,913 3,940 4,469
Water Consumption – Surface water 25 30 30 25 4
Water Consumption – Ground water 3 4 3 2 5
Total Water Discharges – Municipal Treatment 3,236 3,393 3,559 3,651 3,179
Water Discharges – Asia 551 627 658 600 712
Water Discharges – Europe, Middle East, Africa 521 468 591 735 556
Water Discharges – Latin America 67 48 43 35 54
Water Discharges – North America 2,097 2,250 2,266 2,281 1,857
20 For more information on water data, please see Microsoft's CDP Water Security response at www.cdp.net.
Table 18
Verification/Assurance
FY17 – FY20 Data for this period of time was third party verified by APEX using a limited level of
assurance. Below please find the criteria used to measure the carbon, energy and
water information:
For carbon and energy: World Resources Institute (WRI)/World Business Council for
Sustainable Development (WBCSD) Greenhouse Gas Protocol, Corporate Accounting and
Reporting Standard, revised edition, including Scope 2 Guidance amendment (Scope 1 & 2);
WRI/WBCSD Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and
Reporting Standard (Scope 3)
For water: CDP Water Security Reporting Guidance
For all years, the scope of the verification included GHG emissions for Scope 1, Scope 2,
Scope 3 business air travel, total energy consumption, total electricity consumption, total
renewable electricity consumption, total offsets purchased, total water withdrawals, total
water consumption, and total water discharges. For FY19 and FY20, the rest of Scope 3
category emissions identified as relevant were also included. Latest data adjustments
highlighted in this report made to historic data were outside of the scope of these previous
years’ review.
FY21 Deloitte & Touche LLP performed a review engagement on management’s assertion that the
specified information included in Section 1 of Appendix D as of and for the fiscal year ended
June 30, 2021 is presented in accordance with the criteria set forth in Section 1.10, Reporting
criteria. Deloitte & Touche LLP’s review report is included in Section 1.11.
Information relating to periods prior to the fiscal year ended June 30, 2021, was not subject
to Deloitte & Touche LLP's review and, accordingly, Deloitte & Touche LLP does not express a
conclusion or any form of assurance on such information.
Appendix D (continued)
116Overview Carbon Water Waste Ecosystems Appendix
Appendix E
Policy
Microsoft supports carbon, clean energy,
and sustainability policy efforts at the
state and national level in the United
States, the European Union, and
elsewhere. The table on pages 117-118
outlines key sustainability policy and
advocacy actions Microsoft has taken
since our last sustainability report. To see
historical policy and advocacy actions,
please refer to the January 2021
Sustainability Report.
Date Market Description
Dec-20 US Participated in a statement encouraging US Congress and the President-elect to work together to enact ambitious, durable, and
bipartisan climate policies.
Jan-21 US Expressed public support for the US rejoining the Paris Climate Accord.
Feb-21 Illinois Signed onto letter supporting policy in Illinois accelerating a transition to 100 percent clean energy.
Feb-21 EU Filed submission supporting increased EU GHG emissions reduction target in the European Commission public consultation on the
Renewable Energy Directive.
Mar-21 EU Joined European Green Digital Coalition to demonstrate the role of digital technologies in advancing climate goals.
Mar-21 EU Joined letter supporting Green and Digital Transformation in the EU.
Mar-21 EU Filed comments to the EU Energy Efficiency Directive highlighting our work on energy efficiency, auditing, and management systems.
Mar-21 Arizona Joined letter supporting Arizona’s 100 percent clean energy rules.
Apr-21 US Submitted comments to the US Department of Agriculture on ways to advance climate smart agriculture, carbon removal, and
forestry strategy.
Apr-21 Washington Advocated for Washington state's Climate Commitment Act which sets a robust carbon price through a cap and invest program.
Apr-21 Texas Joined letter supporting resilient energy grid policies in Texas and opposing policies that penalize renewable energy.
Apr-21 US Advocated for ambitious climate targets for the US’s national determined contributions (NDCs).
Apr-21 US Engaged and advocated for the US Growing Climate Solutions Act to advance high quality standards for nature-based
carbon removal.
117AppendixEcosystemsWasteWaterCarbonOverview
Appendix E (continued)
Date Market Description
May-21 US Filed comments to the Securities and Exchange Commission supporting the Commission's development and adoption of climate
disclosure rules.
May-21 US Participated in US Congressional Climate Infrastructure Lobby Day to support robust domestic climate policy.
Jun-21 US Supported clean energy and climate provisions in the US Infrastructure Investment and Jobs Act.
Jul-21 EU Issued statement in support of the European Commission’s Fit for 55 package.
Jul-21 US Participated in US Congressional Lobby Day for robust climate and energy investment in the bipartisan infrastructure and
reconciliation packages.
Aug-21 EU Submitted comments to European Commission in support of a carbon removal certification mechanism.
Sept-21 UK Filed response to UK Financial Conduct Authority (FCA) consultation on carbon accounting.
Sept-21 US Submitted comments to the US Department of Defense on sustainability and climate-related disclosure.
Oct-21 Global Joined business letter in support of strong government commitments to climate action by national governments around the world.
Oct-21 US Issued public statement in support of strong climate and clean energy provisions in the US reconciliation and infrastructure bills.
Nov-21 Global Selected as a Principal Partner for COP26 in Glasgow.
Policy
118AppendixEcosystemsWasteWaterCarbonOverview
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