Microsoft as sustainability customer zero: Using data to drive progress

Introduction from Melanie Nakagawa, Chief Sustainability Officer, Microsoft.

At Microsoft, we believe that for our company to do well, the world must do well. To achieve our own sustainability goals and help ensure a resilient future for generations to come, we must address the world’s collective environmental challenges. This requires both leadership and partnership in innovation and action—and getting our own house in order.  

We started this sustainability journey decades ago, and in 2020, set bold targets to become carbon negative, water positive, zero waste, and to protect ecosystems, all by 2030. We’re proud to share our progress, challenges, and learnings through our annual environmental sustainability report in hopes of helping to accelerate global progress to net-zero.  

Meaningful climate progress requires data driven insight to guide our approach. This means measuring a compilation of environmental metrics across greenhouse gas (GHG) emissions, energy, water, waste and circularity, and land. Combining data from our own operations and multiple third-party sources to make the data actionable for analysis and action requires complex data management—including a combination of digital technologies for our data collection, storage, calculations, reporting, and diagnostics.

In addition to managing our own environmental footprint, we are also committed to providing digital technology to empower our customer and partners on their own sustainability journey. This blog is the first in a series that will unpacking our Microsoft sustainability journey, including how we use Microsoft Cloud for Sustainability solutions to record and manage progress. We’ll share our experience collecting, storing, and analyzing complex environmental data in hopes that we can all make greater progress together.

We are in a critical moment for global sustainability and action is already underway. We invite you to join us: harnessing the power of technology to create a more equitable, healthy, and sustainable future for all.

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Informed decision-making and reliable reporting require managing data at scale 

Ever since we set our first carbon emission reduction goal back in 2009, we’ve steadily built on our commitment to innovating and investing in technologies that address environmental sustainability. Data sits at the core of our strategy, enabling Microsoft to digitally measure our environmental footprint, create action plans to achieve our ambitious targets, and monitor progress against those goals.

We collect environmental metrics across greenhouse gas (GHG) emissions, energy, water, waste and circularity, and ecosystems. Then we combine data from our own operations and multiple third-party sources to make the data actionable for analysis and action. This requires complex data management—including a combination of digital technologies for our data collection, storage, calculations, reporting, and diagnostics. 

Initially, collecting data from various sources and formats was daunting. Our teams had to gather data across different business groups with varying levels of experience, and then process and analyze those disparate datasets manually. One valuable step for us was reevaluating how we take in and process data, which enabled us to simplify the challenges of outdated and siloed information, while also helping to promote sustainability throughout the company. We are seeing the results in the innovations we make available to our customers:  

• Building efficiency—One of our first forays into technology was to assess the environmental impact of our own operations, yielding the first smart building Internet of Things (IoT) approach to optimize energy efficiencies in our facilities. Today, with our partners, we offer similar smart building solutions to our customers.  
• IT emissions—We put processes in place to track Microsoft datacenter emissions. Now, customers can use the Emissions Impact Dashboard to see datacenter emissions related to their use of Microsoft Cloud services.
• ESG data and reporting—As our solutions have matured, and the amount of sustainability data has grown, we needed new ways to track progress against increasingly ambitious commitments. Our environmental, social, governance (ESG) data estate practices continue to inform and inspire the capabilities we provide to customers through Microsoft Cloud for Sustainability—including Microsoft Sustainability Manager—and other Microsoft solutions. 

Our strategy is fueled by a powerful range of data solutions 

Establishing a baseline and then reporting and monitoring progress toward goals requires a variety of data solutions. We combine the data intelligence and technologies within our Microsoft Cloud products—including Azure, Power Apps, Microsoft 365, and SharePoint—with new built-for-purpose Microsoft Cloud for Sustainability solutions. The same models and tools we use internally are available to our customers. Here’s how it works:  

• Data collection, storage, and validation—To address the challenges of inconsistent and incompatible data coming in, we implemented data contracts. These contracts stipulate formats and reporting timelines, so data flows in faster and more accurately. Data contracts helped us reduce the time spent on data cleaning, which was previously as high as 70% of the data compilation process.   
• Calculation—We created Sustainability Manager to calculate our carbon, water, and waste emissions. It simplifies the process of calculating Scopes 1, 2, and 3 emissions using dynamic calculation models based on the GHG Protocol.  
• Reporting and diagnostics—For data visualization and reporting, we use Azure Analysis Services, Power BI, Power Query, and Excel Data validation as a crucial aspect of our reporting process, which we’re continuing to improve.  

Our learnings inform the comprehensive data solutions we deliver to our customers 

As “customer zero” for Microsoft Cloud for Sustainability solutions, our sustainability team is actively influencing the roadmap, feature requests, and practical use of other Microsoft solutions. One solution we’re really excited about is Project ESG Lake, available now in preview, which collects ESG data into a single comprehensive data estate that streamlines data calculations and holistic analysis, reporting, and diagnostics efforts as well.  

And based on all we’ve learned about optimizing our own workloads for maximum sustainability benefits, we’ve created best practice guidance for customers that are deploying Sustainability Manager. Well-Architected for Sustainability guidance is available to help organizations build Sustainability Manager workloads using proven scalable principles.  

Data governance drives better sustainability outcomes 

Sustainability success is contingent on empowering people. We’ve learned that progress requires more than just creating a sustainability team. Instead, successful organizations prioritize sustainability across the entire business. This process works across departments. For instance, we’ve challenged operations to minimize our environmental impact and encouraged product and services teams to build products that are more sustainable by design. 

In addition to offering everyone sustainability training and folding sustainability into business decisions and practices, we also hold teams accountable to a governance structure. For example, we instituted an internal carbon fee in 2012. As part of this effort, we track emissions across direct operations, electricity, procurement, supply chain, product energy use, and even business travel and employee commuting. Business groups are then charged for their carbon usage. Not only does this process help us monitor and forecast emissions, but the added accountability drives innovation and better behaviors. Our own experience has informed the new carbon fee capabilities now available in preview for our customers through Sustainability Manager. 

Evolving our sustainability data and reporting strategy 

At Microsoft, we are committed to using digital data solutions to guide and manage our sustainability strategy. Our data and reporting practices will continue to evolve based on what we’ve learned over the last decade of collecting sustainability data, and in response to emerging ESG reporting regulations and standards (like Corporate Sustainability Reporting Directive).  

One of the greatest challenges for ESG reporting for any organization will be collecting data from supply chain partners. In our next blog, we’ll take a closer look at how our supplier engagement strategy has evolved over the last few years, and how we’re using Microsoft Cloud for Sustainability solutions to help us gather and understand the sustainability impact of our value chain partners. 

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Source: Microsoft Industry Blog