A company-wide carbon fee will hold divisions accountable for their own energy usage.
The Microsoft campus in Redmond, Washington.
This summer, Microsoft is launching a new green energy initiative in which all of the company's direct operations, "including data centers, software development labs, air travel, and office buildings," will go carbon neutral.
The program will begin in July, at the start of Microsoft's 2013 fiscal year, and includes a company-wide carbon fee, whereby various divisions will be held accountable for their own energy usage.
"We recognize that we are not the first company to commit to carbon neutrality," said Microsoft Chief Operating Officer Kevin Turner in a blog post early this morning, "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."
Other technology companies have made similar promises to reduce energy usage and carbon emissions in recent years. Google says that it has been carbon neutral since 2007, and it launched a new website last year detailing the ways the company has increased its energy savings. Both Facebook and Apple have also touted their own clean energy efforts, unveiling new, efficient data centers in the past year.
Microsoft, meanwhile, has been documenting its sustainable energy efforts on its Software Enabled Earth blog since 2009, which is run by the company's environmental sustainability team. In March of that year, company CEO Steve Ballmer made a commitment that by 2012, Microsoft would reduce its carbon emissions by at least 30 percent of its 2007 baseline. Last month, Robert Bernard, Microsoft's chief environmental strategist, revealed on Earth Day that the company had met this goal.
Bernard listed a number of Microsoft strategies at offices worldwide that have contributed to reductions in carbon emissions. At the company's Puget Sound offices, for example, employees have eliminated "approximately 9.9 million miles of auto travel" each year by taking free busses to and from work.
And earlier this year, Microsoft opted to use CarbonSystems, a cloud-based Enterprise Sustainability Platform, to manage energy and environmental performance across "more than 600 facilities in more than 100 countries."
"During that time we have also accelerated the shift in our business strategy to cloud computing and invested more than $3 billion USD to build facilities and networks globally to support this strategy," according to the company's latest carbon neutral (PDF) white paper.
The goal is to improve key metrics such as power, carbon, and water usage effectiveness. One strategy Microsoft has employed at new and existing data centers is to run servers at higher temperatures, "within the range specified by the manufacturer but higher than is typical—so that we can use free air cooling instead of extensive air conditioning," according to the white paper. This is in addition to using more efficient LED lighting, HVAC, and airflow systems.
The three pillars of Microsoft's new carbon neutral initiative.
Perhaps the biggest change in Microsoft's strategy is establishing an internal "price for carbon." In other words, electricity or travel costs will now include the price of carbon offsets purchased by the company to balance carbon emissions incurred by such activities. "By embedding the cost of carbon in our financial systems," says the white paper, "we have a direct way to measure and drive behavior change in a company-wide, systems-based way.
The price will be based on market pricing for renewable energy and carbon offsets, and it will be applied to business operations in over 100 countries. The hope is that by exposing the cost of energy offsets to individual departments and teams directly, Microsoft employees will have more of an incentive to reduce energy usage.
This internal carbon fee will go into a central fund that Microsoft says it will use to transition the company away from non-renewable energy sources. For example, it is considering investments in wind farms and methane-capture projects to reduce the amount of so-called dirty energy it must purchase from the existing commercial electrical grid.
After all, carbon offsets alone aren't enough to reduce the environmental impact of Microsoft's vast data centers and business operations. The environmental group Greenpeace criticized various cloud providers last month—including Microsoft, Apple and Amazon—for not using more sources of renewable energy to power their operations.
But Microsoft is making a clear effort to change that. "The part I’m most excited about is our plan to infuse carbon awareness into every part of our business around the world," wrote Turner, "creating incentives for greater efficiency, increased purchases of renewable energy, better data collection and reporting, and an overall reduction of our environmental impact."