Why Microsoft's carbon-neutral pledge matters

Why Microsoft's carbon-neutral pledge matters

Summary: By making business divisions responsible for their carbon costs, the software giant sets a precedent that is likely to be followed by other high-tech companies.

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TOPICS: Microsoft
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With the start of its new fiscal year on July 1, 2012, Microsoft has embraced a carbon-neutral commitment across all of what it describes as its direct operations -- including (but not limited to) its data center and software development laboratories.

What's more, the company plans to create an internal carbon fee that it will apply to its operations.

"The goal is to make our business divisions responsible for the cost of offsetting their own carbon emissions," wrote Microsoft Chief Operating Officer Kevin Turner, in The Official Microsoft Blog.

So, that means there will be a chargeback for the energy they use, so it is in their interest to reduce it.

I'll get more into the specifics of how Microsoft plans to get there, but this statement of intent is especially relevant and significant as the software giant pushes more of its business out of the delivery of on-premise software licenses and into applications and infrastructure services delivered via huge cloud operations.

Much has been made of cloud computing's ability to help reduce energy consumption, but the emerging downside to this proposition is that it centralizes more of the world's software consumption into huge data centers that often have questionable "dirty" energy sources. At least in the eyes of organizations such as Greenpeace, which is closely tracking the data center site choices of the top players in the cloud computing world. Microsoft didn't fare too well in Greenpeace's latest report, "How Clean is Your Cloud?"

I honestly doubt Microsoft's carbon-neutral pledge for 2013 is in reaction to that report, given all the past measures it has taken to address the energy consumption of both its data centers and its office sites around the world. The fact is, the move just makes good business sense -- regardless of whether or not it is construed as a green business strategy.

For example, Microsoft's work to apply smart building technology across its campus in Redmond, Wash., should result in an energy savings of $1.5 million for the 2013 fiscal year. The payback on its investment comes in just 18 months.

Microsoft also managed to jump from nowhere into the No. 3 position on the U.S. Environmental Protection Agency's most recent list of biggest purchasers of green power. It purchases about 1.5 billion kilowatt-hours annually, which is about 46 percent of the company's overall consumption.

Mind you, those purchases are in the form of renewable energy credits (RECs), which some people see as a cop-out in the quest to become greener. But, heck, someone has to fund and finance renewable energy projects. Why not Microsoft?

Microsoft's carbon-neutral pledge casts a very bright spotlight on the need for high-tech companies to reduce power consumption, which is great publicity for the energy-efficiency movement as a whole.

"We recognize that we are not the first company to commit to carbon neutrality, but we are hopeful that our decision will encourage other companies large and small to look at what they can do to address this important issue," Turner wrote in the Microsoft blog.

As you would expect, the Greenpeace clean energy hawks are skeptical of a strategy that will allow Microsoft to continue using coal-generated power for its data centers while buying RECs in order to officially make its carbon-neutral claim.

In a statement, Greenpeace Senior IT Analyst Gary Cook said:

"Microsoft should move quickly to back up its goal by committing to renewable energy for its growing data center fleet and using its influence to demand a shift away from dirty energy, as its peers Google and Facebook has done. ... If Microsoft matched or exceeded those efforts, it would catalyze a shift from dirty to clean electricity and create the scale of positive change that Microsoft could be proud of."

The big difference between Microsoft and companies like Google and Facebook is that the power of Microsoft's customer base lies with businesses. Until the corporate world starts clamoring for clean energy, it is difficult to see why Microsoft would go out of its way to make clean energy part of its data center procurement process.

The timing of its pledge is actually pretty interesting, considering that Dell ended its own push for carbon-neutrality at the end of 2011. Dell said it would focus, instead, on making its operations as energy-efficient as possible without opting for REC purchases.

Still, Microsoft's move likely will pressure some of its competitors to consider adopting similar strategies -- especially if carbon-neutrality becomes part of the marketing game. For that reason alone, it is a significant stance. And, who knows, maybe eventually clean energy sourcing will become part of the data center sourcing equation.

Topic: Microsoft

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23 comments
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  • Why?

    It's significant in another way. It marks a certain parochialism associated with the Pacific Northwest, where Microsoft is headquartered. Those who share the political sensibilities of that area -- such as the author -- will applaud the move. Others will wonder what in the world Microsoft is doing wading into a hotly-contested political argument.

    Polls demonstrate that, at least in the U.S., proponents of The Church of AGW have done a poor job of convincing their fellow countrymen to believe. According to Gallup, half of Americans believe the seriousness of global warming is "greatly exaggerated."

    For our purposes, it doesn't matter whether they are right or wrong. What matters is that if half the country thinks that way, it's a good bet that half the IT directors think that way. Maybe not in the Seattle area, but Seattle is not the U.S. So here comes Microsoft to declare itself a political pain-in-the-butt to half the IT directors, for no reason other than to make a happier campus in Redmond.

    This company does not have a lot more mistakes it can make. Gratuitously annoying people probably shouldn't be on the list of things they should be doing. Political controversies are the last place publicly-traded corporations should be going.
    Robert Hahn
    • The biggest problem with your argumenst is your bias

      (hatred?) of MS, won't allow you to except any news regarding MS unless it is negativelly slanted.

      I feel sorry for you. Global warming can, and likely has been exagerated in some areas, but it doesn't mean it should be ignored.

      It's like someone saying, "we have to stop that bomb from going off as it will kills hundreds", when in truth, it would have only killed 30.

      But those 30 would still die, so it's still a good idea to stop the bomb from going off, wouldn't you think?
      William Farrel
      • All hail the tree huggers

        I agree with Robert Hahn. Why is MS sticking its nose into this political area, when it doesn't have to? Data shows that we are coming out of a periodic mini-ice age, which is coincident with increased man made CO2 production, and we conclude that man made CO2 production is the cause of the increase in temperature, and not other factors? What's more, proponents of anthropogenic global warming, ignore historical data which shows far greater increases in CO2 concentrations, with no corresponding increases in temperature.

        I don't see why companies and individuals should be listening to these green activists, who want us to bow down to trees, and value them above human life.
        P. Douglas
      • Robert Hahn is anti-MS?

        Since when?
        John L. Ries
    • Why not?

      People who do not believe in global warming always seem to go out of their way to criticize those who do and try to do something about it. But if it's Microsoft's policy and they are carrying it out on their own dime, why do you get so offended that they do it? How is this putting you out?
      Michael Kelly
      • Yes they have no dimes

        Few believe it's on "their own dime." They do not have dimes. Like all companies, they collect what dimes they have from their customers. There exist people who do not wish to pay for other people's politics. Some of them will inevitably be in positions where they can steer significant business. That is why it does not make sense to take controversial political positions unless that is part of your marketing strategy (like it is for Working Assets, Ben & Jerry's, and a few others).

        Once Microsoft's investors get their dividends in the mail, I don't care if they send them to Greenpeace or The Texas Tea Party. Those are individual decisions. It should not be up to Microsoft's management to make political decisions on behalf of their shareholders.
        Robert Hahn
      • Twisted logic

        nathan-lee.com/blog/wp-content/uploads/2010/01/whatIfGetABetterPlanetForNothing.jpg

        So Microsoft will invariably save money by placing their data centers near hydroelectrical dams and their lower KwH costs. This results in greater dividends to their shareholders, not a political statement.
        Your Non Advocate
    • Political Correctness for Conservatives

      I knew it existed, but I hadn't seen such a blatant example since Martin Feldstein was compelled to resign as the chairman of Ronald Reagan's Council of Economic Advisors for speaking out against deficit spending.

      Maybe next we'll see picket lines around recycling centers.
      John L. Ries
  • I thought Microsoft was basing its datacenters where there was hydropower

    I thought Microsoft was basing its datacenters where there was hydropower, like Oregon and Chicago (water cooled from the lake?) and they had very efficient data centers (in the order of 1.2 PUE)?
    Roque Mocan
  • Delusional Environmentalism

    The problem isn't carbon release, the problem is that there are 6 billion people releasing carbon.

    My partner and I have chosen not to have children, and I really resent being judged because I BBQ a steak or drive an SUV.

    I'll introduce a new term for the enviros: Civilizational Footprint. It is the footprint that you make by existing on this Earth. Every person has a certain consumption and resource utilization, and an average lifespan of 75 years. If you decide to have 2 or 3 children, you set in motion 3x more consumption for the next 75 years that you are the direct cause of.

    So you'll forgive me if I say I couldn't care less about carbon footprints, because by not having three children I can eat 3x the food, drive 3x as often, and use 3x the electricity all guilt free.
    croberts
    • May I borrow that?

      [i]Civilizational Footprint[/i]

      Brilliant. Being a proud non-breeder myself, I am going to use this one.

      +1,000
      toddbottom3
      • There should be a carbon tax for having kids!

        The Octomom should be declared public enemy no. 1! :-)
        P. Douglas
    • Well said...

      I couldn't agree more with what you say, however, religion is what rules the roost in the US of A and since contraception is frowned upon in many religions, this problem will never go away. Instead, the media and others focus on things like gas guzzling cars, inefficient energy consumption, plastic forks and whatever else they can do to divert people's attention.

      I fear the effect religion has on people WAY MORE than global warming.

      "This message brought to you by the church of intelligence and common sense..."
      omdguy
  • Why Microsoft's carbon-neutral pledge matters

    to erase their bad karma!
    beau parisi
  • I don't understand why...

    this is considered political.

    Even if global warming weren't true, and even if humans had nothing to do with it if it were, since when is the spewing of pollutants into the air a good thing? What do you breathe?

    http://www.wired.com/thisdayintech/2010/07/gallery-smog/
    msalzberg
    • CO2 is not a pollutant

      ... and has never been, until the Church of Gore said so. Until then, it was vital for plant life, among other things.

      The whole things is build on a pack of lies. These are the same people who predicted, in the 70's, that we were headed for an Ice Age and had to spend money NOW to stop it.

      The portion of the IPCC report that discusses AGW, in the end, was only reviewed by half a dozen people, not 2,500. The summary was changed at the insistence of non-scientists in the UN to make it sound worse than the data allowed. Many real scientists quit in protest, but the UN left their names on the report!

      Fortunately, ClimateGate showed us that the "data" behind AGW is so poor that these climatologists had to collude to hide it from the public. They also conspired to quash dissenting views in scientific journals. Why would any real scientist do that?

      Lastly, the natural world spews out so much more CO2 than humans do, that even if we were to stop breathing and manufacturing, there would be almost no noticeable difference. To make a real difference we would have to exterminate cows and termites.

      I don't appreciate financing someone else's fanaticism. And I certainly don't appreciate our next generation being brainwashed with junk science so Microsoft can make a buck.
      harvey_rabbit
      • Your post reads as one who...

        has made up his mind, and will refuse all evidence. "ClimateGate" was debunked as bull some time ago. Try keeping up.

        CO2 is great for plants, sure. Google 'deforestation.'
        msalzberg
      • msalzberg: Sorry there bub, but, the guy above is 100% correct,

        and it's the environmental wackos who have people believing a complete lie. Does global warming occur? Absolutely. But, it's a natural event, and it's been happening since the planet was born. That same planet also goes through cooling periods. There have been many thousands of cooling and warming periods of the Earth, and man has been around for a very miniscule part of that time.

        Consensus is not science, and what we get from politicians and media people and the corrupt scientists, is "consensus" and not real science.

        Better study up and stop believing that which is agendized science, or junk science.
        adornoe
      • How to tell good science from junk science

        (Sarcasm)If it supports what I already believe (or what people I trust say), it's good science; if it doesn't, it's junk.(/Sarcasm)

        Reply to Adornoe:

        Do you know enough about meteorology to have a real opinion on the subject (I don't), or are you just following the party line? I figure I know at least about the subject as Rush Limbaugh, but I'm considerably more humble and less partisan.
        John L. Ries
      • John L. Ries: Sarcasm is okay, but real science cannot coexist with junk

        science, and the global warming "science" from the last 30 years, is nothing but, well, junk.

        No joke and no sarcasm is going to be able to undo the truth or good science. AGW is junk science. No joke.

        The truth and the facts is what matters, and AGW is not factual. There may be a few bits of science interspersed here and there in that junk science, but the overall science, and the conclusions, end up being nonsense.

        When it comes to real science, AGW science fails are every point of the scientific principle. Therefore, it's junk.
        adornoe