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Microsoft Needs Partner Help to Achieve Sustainability, Scope 3 and Net Zero Goals

May 19, 2024 by Joe Panettieri

Microsoft will need partner assistance in order to achieve certain sustainability goals by 2030, the cloud services provider and software developer revealed in a blog and an associated 2024 Environmental Sustainability Report.

Brad Smith, president, Microsoft
Brad Smith, president, Microsoft

In a lengthy blog, Microsoft President Brad Smith and Chief Sustainability Officer Melanie Nakagawa described how the company is "not yet on track" to meet Scope 3 indirect emission reduction goals, and water management goals for its data center operations. The company also revealed that its latest AI data centers won't require water cooling technologies.

Microsoft Sustainability: Progress and Scope 3 Challenges

In 2023, Microsoft reduced Scope 1 and 2 emissions by 6.3% compared to a 2020 baseline. However, indirect emissions (Scope 3) increased 30.9%. As a result, Microsoft’s overall emissions are up 29.1% from the 2020 baseline, but company noted.

Microsoft's biggest Scope 3 challenges mainly involve data center construction -- involving everything from building materials to hardware components (semiconductors, servers and racks), the company said. Among the hurdles facing Microsoft: The world needs to "develop and use greener concrete, steel, fuels and chips."

To address the Scope 3 challenge, Microsoft is taking multiple steps. They include:

  • Developing more than 80 discrete and significant measures that will to reduce Scope 3 emissions; and
  • requiring "select scale, high-volume suppliers to use 100% carbon-free electricity for Microsoft delivered goods and services by 2030."

Microsoft did not disclose the number of supplier partners involved in that requirement, nor did the company share a list of associated partner names.

Melanie Nakagawa, chief sustainability officer, Microsoft
Melanie Nakagawa, chief sustainability officer, Microsoft

Microsoft AI Data Centers: No Water Required for Cooling

Microsoft's sustainability strategy also faces various water-related challenges, stating: "As our datacenter business continues to grow, so does the need to minimize our water consumption and replenish more than we consume in these operations."

With that goal in mind, the company said it will take these four steps (word for word):

  1. "We are taking action to reduce the intensity with which we withdraw resources by continuing to design and innovate in order to minimize water use and achieve our intensity target
  2. Our new datacenters are designed and optimized to support AI workloads and will consume zero water for cooling. This initiative aims to further reduce our global reliance on freshwater resources as AI compute demands increase
  3. We are partnering to advance water policy. In 2023, we joined the Coalition for Water Recycling. Over the coming year we will finalize a position and strategy for water policy
  4. We are developing innovative scalable replenishment projects in high water stress locations where we operate datacenters. We recently announced Water United, a new initiative to unite public and private sectors in reducing water loss from leakage across the Colorado River Basin."

Potential Channel Partner Learnings

Dig a little deeper in to the blog and report, and Microsoft describes a journey towards "zero waste," which includes "reducing waste at our campuses and datacenters, advancing circular cloud hardware and packaging, and improving device and packaging circularity."

Among the milestones to note: The company now has a reuse and recycle rate of 89.4% for servers and components across all cloud hardware.

Channel partners can potentially leverage those lessons within their own businesses and across their customer bases. As a potential first step, check out this Green IT Playbook -- developed by Rackspace Technology and Smart Columbus, in partnership with the Green IT Working Group.

As you consider Microsoft's progress and challenge areas, consider that roughly 50% of channel partners worldwide expect to generate revenue from sustainability solutions in 2024 – up three percentage points from 47% in 2023, according to research firm Canalys.

Key opportunity areas include: (1) Green software development can reduce the cost of running on-premises and cloud-based systems. (2) IT Asset Disposition (ITAD), hardware as a service (HaaS) and certified refurbished gear can improve security while driving down IT costs.

Microsoft Build 2024 Conference: Sustainability Software, Partner Updates?

Meanwhile, Microsoft continues to enhance its Cloud for Sustainability and Sustainability Manager software for partners and customers. We expect potential updates during the Microsoft Build 2024 conference, scheduled for May 21-23 in Seattle.

Samuel Briscoe
Samuel Briscoe, technical product manager, sustainability, Microsoft

For example:

On the product front, watch for potential updates involving sustainability data solutions in Microsoft Fabric (preview as of February 2024). The preview code allows users to "analyze your organization’s environmental, social, and governance (ESG) data together with your other enterprise data to inform more holistic decisions and better-targeted outcomes," according to a February 2024 blog from Shefy Manayil Kareen, general manager for Microsoft Cloud for Sustainability.

Related: Track Microsoft sustainability updates here.

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