Investing in Climate Change

Microsoft Bets on Trees and Tech to Reach Its Carbon Negative Goal


As the Intergovernmental Panel on Climate Change’s 2018 report suggests, we cannot avoid the worst effects of global warming without removing carbon from the air. Microsoft’s recent pledge to become “carbon negative” by 2030 lines up with this thinking. The company also plans to retroactively zero out all the emissions it has produced since its 1975 founding by 2050. Exactly how will it get there?

Achieving Carbon Negativity

Microsoft is already certified as “carbon neutral” under the CarbonNeutral Protocol, a framework developed and managed by London-based environmental services firm Natural Capital Partners.

The Silicon Valley behemoth plans to improve on this effort and drive down what are known as “scope 1” and “scope 2” emissions—those a company emits directly (for example from its fleet vehicles) and indirectly (through its use of electricity powered by fossil fuels). It hopes to do this by shifting to 100% renewable energy for its data centers, buildings, and campuses by 2025; electrifying its vehicle fleet by 2030; and pursuing zero carbon and LEED platinum status for its modernization projects.

Perhaps the most difficult piece of Microsoft’s carbon negative plan is that it includes “scope 3” emissions, which comprise all other indirect emissions from an organization’s activities, for example business travel, procurement, waste and water. For most companies, including Microsoft, these represent the greatest share of the carbon footprint and can be some of the most challenging to reduce. To help it reach carbon negative status across all emissions, the company will extend the internal carbon tax its divisions pay for scope 1 and scope 2 emissions to cover all scope 3 emissions as well.

That said, the key to becoming carbon negative is to actually pull greenhouse gases from the atmosphere. To achieve this, Microsoft plans to invest $1 billion in carbon removal solutions, both natural and high-tech. Given the stage of development and pricing on the technology side, the company says, it will initially focus on nature-based solutions, such as reforestation and soil carbon sequestration. It will shift to technological solutions like bioenergy with carbon capture and storage and direct air capture “between now and 2050, when they become more viable.”

Despite these ambitious plans, some have called the company’s stance on climate change into question. For example, Vice reported that Microsoft sponsored a petroleum technology conference just before the carbon negativity announcement and has established partnerships with multiple fossil fuel companies. “The disconnect is striking because Microsoft’s new climate pledge is, otherwise, pretty impressive.”

Microsoft will largely meet its 2030 commitment by natural solutions like planting trees.

Making Progress on the Paris Agreement

Microsoft’s statement seems to indicate that it will largely meet its 2030 commitment by natural solutions like planting trees. Indeed, the corporate world has embraced reforestation as a climate change mitigation strategy. More than 300 companies have signed onto the tree-planting initiative created by Salesforce CEO Marc Benioff. So it will not be surprising if references to “natural solutions” in sustainability plans and carbon reduction pledges skyrocket.

According to the Nature Conservancy, keeping global temperature rise near the Paris Agreement target of 1.5 degrees Celsius requires cutting 30 gigatons a year of carbon emissions by 2030. Investing in carbon-storing forests, grasslands, wetlands, and farmlands can help cut more than one-third of those emissions.

That means two-thirds still need to come from reducing fossil fuel dependency. In other words, we have to do it all: transition as quickly as possible off of fossil fuels, conserve the natural environments we have, and invest in carbon removal solutions, both natural and technological.

This is why the recent slew of carbon neutrality pledges—particularly from airlines and oil companies—has been met with some skepticism. Companies generally reach carbon neutrality by reducing emissions as much as possible through measures like energy efficiency and reductions in business travel, compensating for the remainder through carbon offsetting. Carbon offsetting involves investing in projects that avoid emissions, such as a building a wind farm in a developing country or protecting a swath of threatened forests.

In a recent announcement, Microsoft acknowledged that carbon offsetting typically avoids future emissions instead of reducing the current level of greenhouse gases produced by human activity. Through this announcement, Microsoft got at the heart of why offsetting is so controversial.

Yes, it is important that emissions do not increase—and for companies with business models that cannot easily transition to a low-carbon economy, offsetting is better than nothing. Yet it does not reduce the amount of CO2 in the atmosphere, and it will not get us to the Paris target.

Want to learn more about how companies are acting on climate change? Read:

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