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Advancing a net zero future: Ahead of COP26, new carbon accounting tools available with the Microsoft Cloud for Sustainability, now in public preview
In October 2021, we are announced the availability of the Microsoft Cloud for Sustainability public preview. It is an important moment. The work to reduce carbon emissions has become a global priority that requires focused and urgent action by all of us individually and collectively. We believe this new offering can make an important contribution to this effort, helping customers move toward more sustainable operations.
Around the world, governments and companies – Microsoft included – have stepped forward the past two years with important carbon reduction pledges. But as the world heads to the 26th Conference of the Parties in Glasgow – or COP26 – to share net zero ambitions, it’s become clear that the world needs even more than pledges. We need progress.
A central question in Glasgow will focus on what it will take to achieve real and sustainable results. We believe the answer comes in three parts.
- First, we can’t manage carbon unless we can measure it. We all must speak the same language and measure carbon emissions and removal in a consistent and accurate manner. In short, we must adopt a standardized approach to carbon accounting.
- Second, every enterprise will need to adopt new carbon accounting standards and use them to record and report their carbon emissions.
- Third, we can’t measure anything at scale unless we can automate it. We need new digital technology to create the tools and build a new ecosystem to connect emissions sources and enable a new generation of accurate and inexpensive carbon reporting.
Microsoft is focused on each of these steps. As a principal partner at COP26, we’ll use our voice to encourage new carbon accounting standards, and we’ll implement these to achieve our own commitments. And we’re moving forward with technology innovations and investments, including the Microsoft Cloud for Sustainability.
Real progress starts with the recognition that, despite our best intentions, the ability to measure and account for carbon emissions is still remarkably nascent. That’s why we are sharing below recommendations on how we all can work together — and where Microsoft hopes to contribute as a company.
We need to speak the same carbon language
While many of us use the same words to describe the carbon problem and possible solutions, these words currently hold different meanings. We need everyone around the world to start speaking the same carbon language.
This starts by defining what “net zero” really means. Right now, some companies are declaring a “quick victory” in achieving “net zero” results, but it’s far from clear that all these “victories” are real. This creates the risk that we’ll collectively create more confusion than clarity and even undermine the credibility of the big efforts that enterprises must advance.
We believe that “net zero” starts by accounting for all scopes – one, two and three – of an enterprise’s emissions. The failure to include all these emissions may create a better-looking report card, but the results will fall short of what the world needs to meet our climate needs.
In addition, “net zero” means that these emissions are offset not by just “avoiding” them — for instance, by paying someone not to do something, like cutting down trees. It means removing carbon from the environment in an effective and sustainable manner. While this begins with nature-based removal techniques, it clearly also will require technology that is yet to be invented. That’s why we’ve made direct investments in several companies through our $1 billion Climate Innovation Fund and our $100 million donation to Breakthrough Energy’s Catalyst initiative to help accelerate and scale new solutions.
We need accurate and standardized carbon accounting
More than 1,500 companies with a combined revenue of more than $11.4 trillion have published net zero commitments. That’s good news. But the world will need improved common carbon measurement and accounting standards if enterprises are going to meet these goals and be held accountable. This requires that we bring the same kind of rigor to carbon accounting that the world has insisted upon for financial controls.
Today, businesses and increasingly other organizations, are subject to strong auditing, recording and reporting of financial results. If you’re a public company, for example, you publish your financial results and regulatory agencies ensure their accuracy. You don’t need a crystal ball to predict that the world will insist upon similar rigor for carbon accounting. And while we’re not there yet, a key principle for business planning should be to go where the puck is headed, not where it is today. This will require a standardized carbon accounting system with input from industry, but which is adopted by regulators.
The Microsoft Cloud for Sustainability delivers new digital tools to automate carbon accounting
Our customers tell us daily that managing data is one of the biggest pain points in their sustainability journey. There is a torrent of data from all areas of the value chain, and unfortunately much of it currently is often poor quality, siloed and difficult to share. The very real risk is that even with the best of intentions, carbon emissions data is meaningless if it cannot be properly ingested for analysis and action.
We experienced this across Microsoft as we work toward our own commitments to become carbon negative, water positive and zero waste by 2030. We soon realized that we needed to bring our world-class data and environmental science teams together with our engineering and product teams to build new and better digital technology not just for ourselves, but for our customers. This was the origin for the Microsoft Cloud for Sustainability.
The Microsoft Cloud for Sustainability leverages the breadth of the Microsoft Cloud. It is a packaged Software as a Service (SaaS) solution that connects to data sources, accelerates data integration and reporting, provides accurate carbon accounting, measures performance against goals, and enables intelligent insights so organizations can take more effective action on sustainability. While the solution primarily supports emissions management today, there are plans to support water and waste in the future.
The Microsoft Cloud for Sustainability helps organizations advance the three critical processes that need to come together to achieve their sustainability goals.
The first is recording carbon emissions. The Microsoft Cloud for Sustainability automates data collection through connectors that can eliminate manual uploads through near real-time connections to emissions sources. You can set up your data connections from a catalog of prebuilt connectors and operational data providers, such as business solutions, energy providers, travel tools, trading partners, IoT and systems telemetry. And it leverages a common data model to break down data silos across emissions sources, accelerating data integration and reporting.
The second is carbon reporting. The Microsoft Cloud for Sustainability provides the capability to analyze, visualize and report your resource consumption, environmental impact and sustainability progress, including to stakeholders, regulators and the public. It provides data visualizations and dashboards to create a baseline, track your consumption, and measure performance against your goals. And it can easily export your data for public reporting.
The third is carbon reduction. The Microsoft Cloud for Sustainability is designed to provide actionable insights and recommendations to help reduce emissions and improve business processes. You can set and track incremental and long-term goals directly tied to your data. Scorecards and insights help you stay on track and ensure you’re on a path to hitting targets. The common data model enables you to compare your progress with peers that are also using Microsoft Cloud for Sustainability. And it helps identify potential gaps in meeting regulatory requirements.
The work to measure carbon is not a separate or complete end goal. It’s instead a critical foundation for effective carbon reduction strategies and a step toward a sustainable future. It is part of what we offer more broadly through the Microsoft Cloud, creating the ability for customers to develop better data assets and use better digital tools to connect across an entire organization – from the frontlines to the boardroom – to predict trends and proactively make changes to hit sustainability targets together with other business objectives.
We need to build a new carbon technology ecosystem
As we’ve progressed with our work, we’ve concluded that the world needs not just new digital technology, but a new digital ecosystem that can better support recording, reporting and reductions in carbon emissions. The state of carbon accounting today is remarkably nascent. Organizations today typically must assess their spending records and then look up tables that estimate the average emissions associated with them. This falls far short of what the world really needs, which is the ability to pull accurate and near real-time data directly from the emissions sources themselves.
This has inspired us to develop not only the digital technology and common data model that underlies the Microsoft Cloud for Sustainability, but to lean in to help create a new and broad ecosystem that will bring together the wide variety of companies and industries that need to work together. We are advancing this by working with partners to create and deliver data connectors and industry-specific solutions to automate reporting from the complete range of emissions sources. This will help open up to every industry new horizontal and industry solutions that can use advanced analytics, AI, machine learning, IoT and digital twins to help capture and understand data across siloed systems.
Not just a new product, but a new and broad solution
As all this reflects, we are combining our technology development work with a broader commitment to help advance every aspect of the world’s carbon challenges. New products will be critical, but they won’t go far enough by themselves. That’s why we’re committed to doing everything we can to foster a common carbon language, develop effective carbon accounting, help customers reduce their carbon emissions and build the broad technology ecosystem needed to support all of this. You can sign up here to stay informed about Microsoft sustainability innovations, news and initiatives.
COP26 will provide an important moment for the world to take stock of where we all collectively stand. More important, it’s a moment that should inspire us to take new steps together. If one thing is clear, it’s this – we have a long and critical journey ahead!
*article written by Brad Smith, President, and Judson Althoff, Executive Vice President and Chief Commercial Officer for the Microsoft Blog