Employees within at all functions within Microsoft will be affected by the new carbon accounting rules, whether they work in data centers, software development laboratories, administrative buildings, or are traveling for the company. The carbon pricing and charge-back model will push the company to increase its overall energy efficiency and consume more renewable energy instead of conventional fossil fuels. For carbon emissions that cannot be canceled out via efficiency measures, Microsoft promises to purchase renewable energy credits and carbon offsets.
The plan will evolve through four steps. First, beginning on July 1, all business groups must include the price of carbon into their budgets. The business units in turn will be able to reduce their “carbon liability” by decreasing their usage of energy by sourcing renewable energy directly or cutting back on air travel. Each group in turn will pay a carbon fee for each metric ton of carbon associated with their operations. Finally, those carbon fees will be deposited into a central fund from which carbon offsets or renewable energy can be purchased.
Could Microsoft influence companies both large and small to follow its carbon neutrality path? The software giant has morphed into a sustainability leader within the technology industry, from improving its green IT credentials to embedding sustainability thinking throughout the entire organization. The challenge for public companies is to demonstrate that any such path like the one Microsoft is taking will not affect shareholder value in any way. For smaller firms, the complexities of carbon accounting may spook a CFO or controller. But at a time when governments across the world cannot agree on how to manage carbon, companies like Microsoft that have believed a carbon tax is all but inevitable are moving ahead and regulating themselves.
Photo courtesy Leon Kaye.
Leon Kaye, Executive Editor, has written for Triple Pundit since 2010. He is also the Director of Social Media and Engagement for 3BL Media, and the Editor in Chief of CR Magazine. His previous work can be found at The Guardian, Sustainable Brands and CleanTechnica. Kaye is based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas.