Texan by Nature is excited to recognize Microsoft as a 2023 TxN 20 honoree for their leadership in conservation and sustainability. Microsoft’s commitment to conservation, their projects, programs, best practices, and lessons learned are an example and inspiration for us all.

Honoree Industry and Size: Technology, Enterprise

Company Overview
Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

Microsoft is accelerating progress toward a more sustainable future by working to reduce our environmental footprint, helping our customers build sustainable solutions, and advocating for policies that benefit the environment and combat climate change.

What is Microsoft’s conservation and sustainability mission and why is it important to your culture?
Our sustainability work starts with getting our own house in order by committing to become a carbon negative, water positive, zero waste company that protects ecosystems by 2030.

We’re taking accountability for our operational footprint and are committed to sharing learnings, accelerating markets, scaling solutions, and being transparent about our progress. At the heart of the Microsoft culture is the belief that for Microsoft to continue to do well, the world around us also needs to do well. As we continue to grow, we are pursuing opportunities that help solve the problems of people and the planet—and we have made sustainability core to our brand and our business. Our senior leadership team has a deep and enduring commitment to sustainability, which sets the tone across all levels of our organization.

How is conservation and sustainability a part of Microsoft’s business strategy?
To move from pledges to progress, Microsoft set science-based commitments and continues to work to make sustainability a part of every employee’s job. The products we create and sell, the tools and technology we build, how we work with and support our customers and partners, what we invest in, what we report on to our shareholders, and how we engage with government policymakers from the local to the global level all matter in our journey to meet our sustainability commitments. 

What are your Microsoft’s short and long-term goals as they relate to conservation and sustainability?
Long Term 
Microsoft’s approach to addressing the climate crisis starts with the sustainability of our own business. In 2020, we made a bold set of commitments: to be a carbon negative, water positive, zero waste company that protects ecosystems—all by 2030. 

• Carbon Negative: By 2030, we’ll be carbon negative, and by 2050, we’ll remove our historical emissions since our founding in 1975.
• Water Positive: By 2030, we’ll replenish more water than we consume across our global operations, improving access to water.  
• Zero Waste: By 2030, we’ll be zero waste across our direct waste footprint.
• Protect and Preserve Ecosystems: We’ll protect more land than we use by 2025 and build a Planetary Computer.

Short Term
On the path to reaching our long-term goals, our shorter-term commitment is to cover 100 percent of Microsoft’s load with renewable energy purchases by 2025, and by 2030 to ensure that we meet our 100/100/0 commitment, meaning 100 percent of Microsoft’s electricity consumption, 100 percent of the time, will be matched by zero-carbon energy purchases. 

In 2024, we also expect to fully commit the $1 billion capital allocated in 2020 for the Climate Innovation Fund (CIF). Through the CIF, we invest in cutting-edge companies working on innovations like carbon capture, sustainable aviation fuel (SAF), and the creation of low-carbon building materials like green steel and concrete. 

Additionally, we have more than 135 renewables projects in our power purchase agreement (PPA) portfolio and are positioned to continue to grow our renewable resource procurement to meet our goals. Our power purchase agreement with fusion energy company, Helion, for example, will aim to provide 50MW or greater of electricity to Microsoft from its first fusion power plant by 2028.

Melanie Nakagawa, Chief Sustainability Officer, Microsoft

Who in your company is leading your conservation and sustainability efforts and what are some examples of employee engagement in conservation and sustainability at Microsoft?
Microsoft employees around the world, not just those with jobs focused on environmental sustainability, are core to our sustainability mission and we are committed to helping our global workforce integrate sustainability into their roles. This is exemplified by our robust Sustainability Connected Community (SCC) of Microsoft workers which has over 9,000 members (more details below).  We also support Microsoft employees to build their knowledge by providing learning opportunities and creating channels for them to actively contribute to our sustainability work. Below are a few Sustainability leaders at Microsoft:

• Melanie Nakagawa, Chief Sustainability Officer: partners with teams across Microsoft and is the global leader for our company-wide environmental sustainability work.
• Eliza Roberts, Senior Manager, Water: leads a team that works across Microsoft to deliver on our commitment to become water-positive by 2030
• Amy Luers, Global Director, Sustainability Science: leads a team that works across Microsoft to develop science-based, and technology-enabled, sustainability operations, business, and policy solutions.
• Michelle Patron, Senior Director, Sustainability Policy: designs and executes public policy that advances Microsoft’s energy, carbon, and water goals.
• Mark Kroese, General Manager, Sustainability Solutions: leads a team that drives product, customer, and market development solutions that help Microsoft realize its goals of being a carbon-negative, Water Positive, zero-waste, and ecosystem-friendly company.
• Brandon Middaugh, Senior Director, Climate Innovation Fund at Microsoft Sustainability: Oversees Microsoft’s $1 Bil Climate Innovation Fund.

 Microsoft’s Environmental Sustainability Team

Employee Engagement
Since 2018, Microsoft employees have self-organized into a volunteer-led sustainability community, the Sustainability Connected Community (SCC), and found creative ways to take advantage of their diverse experience, skills, and passion to help the company achieve its sustainability commitments. The SCC’s mission is to make sustainability part of everybody’s job. The SCC now totals more than 9,000 employees with 37 local chapters and counting. In 2022, our SCC chapters across the globe hosted dozens of volunteer events to drive upskilling and community involvement.

• Employees partnered with local stakeholders to improve waste management in offices, ran Hackathons to protect and preserve Indigenous languages, and donated time and money to local nonprofits, all while working to ensure environmental justice was factored into the work we do every day. Microsoft employees around the world are core to our sustainability mission.

We’re honored to have our sustainability efforts highlighted by Texan by Nature. Microsoft will continue to accelerate innovation, making progress toward our commitments to be carbon negative, water positive, and a zero waste company that protects ecosystems by 2030. Water management is critical to operations such as those needed to cool our datacenters and operate our buildings globally. We will continue to aim towards scaling our efforts to reduce water use intensity across our operations while continuing to invest in innovative solutions to critical water challenges in the communities in which we operate.

– Eliza Roberts, Senior Program Manager and Water Lead at Microsoft

What conservation and sustainability programs and projects does Microsoft lead and participate in?
Climate Innovation Fund
We have allocated more than $700 million of the Climate Innovation Fund into a global portfolio of more than 50 investments, including carbon removal technologies, water technology, sustainable aviation fuel, green steel, and sustainable solutions in energy, industrial, and natural systems. Microsoft is investing to accelerate climate innovation through our $1 billion Climate Innovation Fund (CIF). In 2021, we also made a $100 million grant to Breakthrough Energy’s Catalyst platform. With the CIF, we invest in innovative technologies and business models that have the potential for meaningful, measurable climate impact by 2030. A full list of Microsoft’s CIF investments can be found here.

Policy and Advocacy
Over the past year, we have deepened our policy engagement on carbon, electricity, waste, and ecosystems. In the United States, we advocated for climate and energy investments as part of the recent US infrastructure and climate laws, including the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. In addition, we shared our support for a robust and consistent framework for climate disclosure requirements by the US Securities and Exchange Commission and provided comments to the requests for information climate disclosure for US federal procurement. Microsoft continued to encourage tree planting and reforestation efforts through our support of the Trillion Trees Act, as well as efforts to improve the health of old-growth forests by supporting the Save Our Sequoias Act. In May 2023, Melanie Nakagawa, Chief Sustainability Officer, Microsoft issued a Point of View piece on the importance of companies and businesses to work in tandem to build out clean energy infrastructure; to bring more clean energy online globally; and the actions needed from both the public and the private sector to make that happen. 

Water positive
In FY22, we contracted for replenishment projects that are estimated to provide more than 15.6 million m3 in volumetric water benefits, increasing our running total of replenishment projects to 35 million m3. Additionally, we provided more than 850,000 people with access to clean water and sanitation solutions in Brazil, India, Indonesia, and Mexico. Microsoft’s water-positive commitment has five key pillars. The first is to reduce water use intensity across our global operations and the second is to replenish more than we consume across our entire global operations, but only in the high-stress priority locations where we operate. The third is to provide people across the globe with access to water and sanitation, clean water and sanitation services and the fourth is to drive innovation and data digitization. And finally, the fifth is to advocate for water policy across the globe.

Protecting more land than we use
Since our commitment in 2020, Microsoft has partnered with the National Fish and Wildlife Foundation (NFWF) within the United States and The Nature Conservancy (TNC) globally to permanently protect more land than we use by 2025. We used a data-informed approach to invest in projects that are working to protect more than 17,000 acres of ecosystems most at risk. We are tracking each of these projects through the process of placing the land under a legal designation of protection, as well as ongoing conservation and management.

How do you see the future of conservation and sustainability evolving, and what role will your Microsoft play in that progress? 

• Carbon Negative: Greenhouse Gas accounting standards provide limited guidance on how to address Scope 3 emissions. For too long, the lack of a clear starting point has led to persistent inaction on Scope 3. The private sector needs a new approach. Microsoft has a five-part Scope 3 strategy by increasing data quality from our supply chain, improving accounting methodologies, advancing lifestyle assessments, and optimizing devices based on real-world data.
• Water Positive: To help the world reach a water-positive future, it will take new partnerships, policies, and investments in promising technologies that have the potential to transform systems at scale rapidly and globally. Microsoft will continue to reduce the water intensity of operations, replenish more water than we consume, provide 1.5 million people access to water and sanitation services, drive innovation and digitize water data, and engage in water policy.
• Zero Waste: Linear take-make-waste systems and existing infrastructure are not adequate to maintain, collect, and redistribute materials effectively for a global circular economy. We recognize the urgent need to reduce carbon emissions associated with the lifecycle of these materials. As a company that manufactures devices,  builds campuses and data centers, and uses manufactured goods in our operations, we have committed to responsibly design and sourcing materials and build a more circular approach into our work and the world.
• Protect and Preserve Ecosystems: 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 are also committed to being good stewards of the land we use – as well as going beyond our own operations and actively working to protect the environmental health of the communities that host our data center operations and where our employees live and work. 

How does your Microsoft quantify investment and return on conservation and sustainability?
Microsoft releases an annual environmental sustainability report that outlines our progress toward meeting our overall sustainability goals. This report 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 the separate Environmental Data Fact Sheet. Deloitte & Touche LLP performed a review relating to specified information within Section 1 of the Environmental Data Fact Sheet. 

Our investments are more than a financial transaction. We are focused on building markets for sustainability solutions and unlocking the financial bottlenecks holding back climate entrepreneurs from achieving significant scale at a price point that can compete with more carbon-intensive alternatives. Our flexible investment approach allows us to fund climate innovators through a variety of investment vehicles, matching the type of capital that is most suitable to a given technology and stage of maturity. We also work across Microsoft to identify operational partnerships, such as procurement contracts, that drive commercial traction and growth.

What is the one lesson that Microsoft has learned from your conservation and sustainability efforts that others can take back and think about applying within their own space?
For any organization’s environmental sustainability journey, it is critical to set commitments, develop a strategy, and build an operational roadmap—all while measuring progress and ensuring accountability. We’ve learned a lot over the last three years of Microsoft’s sustainability journey, and we hope that sharing our approach can help other organizations as they develop their own roadmap.

Why is Texas an important home or base of operations for Microsoft?
While Microsoft is based in Washington State, the Texas market plays an important role in supporting our customer’s net-zero goals and our overall company sustainability efforts toward achieving water-positive and zero-waste goals through Texas-based data centers. 

In March 2023, we launched our Energy Transition Center of Excellence at the Houston Microsoft Technology Center (MTC) to help companies meet their net-zero goals. The new Microsoft Center of Excellence supports Microsoft customers across their energy transition journeys to reduce CO2 emissions, capture and store carbon, generate green hydrogen, repower coal, and optimize wind turbines. Additionally, the center will showcase leading energy transition solutions and give customers an opportunity to learn first-hand the solutions offered by Microsoft and our global partner ecosystem.

A critical piece of achieving our zero-waste goal is managing cloud hardware at our growing fleet of data centers. We have also taken an innovative approach to designing and implementing circularity into our data centers by launching Circular Centers to optimize reuse. We are launching a Circular Center in Texas in FY25 which will enable suppliers to reuse assets and components, resulting in significant carbon emissions reduction and material recovery.

Since the inception of our program, we have provided funding for six water replenishment projects in Texas. We have supported a range of project types including land conservation, groundwater restoration, water supply reliability, and operational efficiency.  Most recently, we contributed to an investment facilitated by the Texas Water Action Collaborative to the Texas Longleaf Team in March 2023 with companies like Google and Meta to restore 2,000 acres of longleaf pine forest, providing water benefits.

Find out more about Microsoft’s conservation and sustainability efforts here.