Energy Efficiency, GHG Emissions, Industrial, Sourcing Renewables  -  May 16, 2024

Microsoft Requires Suppliers to Switch to 100% RE

Microsoft will require its main suppliers to switch to 100% renewable energy by 2030.

The tech company developed over 80 discrete and significant measures to reduce Scope 3 emissions , including a new requirement for select scale, high-volume suppliers to use 100% carbon-free electricity for Microsoft delivered goods and services by 2030, according to a statement from Brad Smith, vice chair and president, and Melanie Nakagawa, chief sustainability officer.

In 2023, Microsoft saw its Scope 1 and 2 emissions decrease by 6.3% from a 2020 baseline. This area remains on track to meet the company’s goals. Its indirect emissions (Scope 3) increased by 30.9%. In aggregate across all scopes, Microsoft’s emissions are up 29.1% from the 2020 baseline.

As published in Microsoft's 2024 Environmental Sustainability Report, the rise in the company's Scope 3 emissions primarily comes from the construction of more datacenters and the associated embodied carbon in building materials, as well as hardware components such as semiconductors, servers and racks. 

In 2024, Microsoft’s multi-pronged strategy focuses on the following:

1. Increasing efficiency by applying datacenter innovations that improve efficiency.
2. Forging partnerships to accelerate technology breakthroughs through its investments and AI capabilities, including for greener steel, concrete and fuels.
3. Building markets by using the company’s purchasing power to accelerate market demand for these types of breakthroughs.

The tech company announced it is not on track to reduce its Scope 3 or indirect emissions, lower its water use, or replenish more water than it consumes in its datacenter operations.

Microsoft announced that it is on track to:

• Reduce its direct operational emissions (Scope 1 and 2).
• Accelerate carbon removal.
• Design for circularity to minimize waste and reuse cloud hardware.

Microsoft supports carbon-free electricity infrastructure, making long-term investments to bring more carbon-free electricity onto the grids where it operates.

In 2023, the company increased its contracted portfolio of renewable energy assets to more than 19.8 gigawatts (GW), including projects in 21 countries. In FY23, Microsoft also contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years. 

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