Microsoft 2024 Environmental Sustainability Report

How can
we advance
sustainability?
2024 Environmental
Sustainability Report
Reporting on our 2023 fiscal year

Overview Microsoft sustainability Customer sustainability Global sustainability Appendix 02
In this report
Overview Microsoft sustainability Customer Global Appendix

sustainability sustainability
Carbon Waste
Foreword 04 Our approach 10 Our approach 35 Overview 57 Overview 70 Appendix A 85
2023 highlights 07 Improving the measurement 14 Reducing waste at our 37 Microsoft Cloud for 59 Investing in innovation 72 Appendix B 86
and efficiency of our campuses and datacenters Sustainability
How we work 08 Accelerate sustainability 76 #sustainabilitychampions 87
operations Advancing circular cloud 40 Devices 61 solutions with AI
Building markets and 18 hardware and packaging
Green software 65 Policy and advocacy 79
driving progress Improving device and 42
packaging circularity Arts and culture 67 Employee engagement 81
Learnings and what’s next 22
Learnings and what’s next 45 Planetary Computer 68 Scaling impact through 82
Green Skilling
Progress through partnership 69
Water Ecosystems Progress through partnership 83
Our approach 23 Our approach 46

Reduction 26 Improving biodiversity 48
at our campuses
Replenishment 28 Reporting disclosure
Increasing biodiversity 50
Access 30 A key principle of our work
at our datacenters
Innovation 32 is transparency. This report,
Protecting more land 51 published annually, includes our
Policy 33 than we use strategy, progress against our
Learnings and what’s next 34 Datacenter community 53 goals, and key challenges and
environmental sustainability trends we see in this work. We also
publish our environmental data,
Learnings and what’s next 55 which is included in the separate
Environmental Data Fact Sheet.
Deloitte & Touche LLP performed
Cover captured by:

Finnian Power
5M 18.5K 61M $761M a review relating to specified
information within Section 1 of the
Environmental Data Fact Sheet.
metric tons of carbon removal metric tons of waste diverted cubic meters of water allocated towards climate
Regional CE Program Manager, contracted in FY23 from landfills and incinerators replenishment projects technologies through our Read about how we report in
Ireland contracted by end of FY23 Climate Innovation Fund (CIF)1 Appendix A.
Overview
Reviewing our
2023 progress
and learnings
Our employees are at the core of our sustainability Foreword 04
journey. Their passion and commitment catalyzes 2023 highlights 07
progress in every part of our business and their
How we work 08
communities around the world.
Images taken by employees are featured throughout
the 2024 Environmental Sustainability Report.
Captured by:
Erika Basham
Director of Sustainability
Product Strategy,
United States
Foreword “ There is no issue today that At the same time, there are two areas where we’re
not yet on track, and in each of these we are
connects everyone on the intensively engaged in work to identify and pursue
Accelerating innovation planet more than the issues

around climate change.”
additional breakthroughs. These are:
Reducing our Scope 3, or indirect, emissions.
and partnership for people At the end of last year, the world met in Dubai at
COP28 to assess global sustainability progress.
Reducing water use and replenishing more water
than we consume in our datacenter operations.
and the planet The results were sobering. The world is not on
track to meet critical climate goals, and we see
Even amid the challenges, we remain optimistic.
We’re encouraged by ongoing progress across our
campuses and datacenters, and throughout our
many of the world’s challenges reflected in our
own situation. During the past four years, we have value chain. Even more, we’re inspired by the scores
overcome multiple bottlenecks and have accelerated of executives and employees across Microsoft who
Four years ago, Microsoft committed that by are rolling up their sleeves and identifying new and
progress in meaningful ways. As we report here, we
2030 we would become carbon negative, water innovative steps that are helping us to close critical
are on track in several areas. But not in every area.
positive, zero waste, and protect more land than gaps. We all recognize the same thing: there is no
We therefore are mobilizing to accelerate progress in
we use. Since that announcement, we have seen issue today that connects everyone on the planet
areas where we’re not yet on track.
major changes both in the technology sector and more than the issues around climate change. We all
in our understanding of what it will take to meet In four areas we are on track, and in each of these need to succeed together.
our climate goals. New technologies, including we see progress that has the potential to have
generative AI, hold promise for new innovations that global impact beyond our own sustainability work. Carbon negative
Brad Smith Melanie Nakagawa can help address the climate crisis. At the same time, These are: Our carbon negative commitment includes
Vice Chair and President Chief Sustainability Officer the infrastructure and electricity needed for these
Reducing our direct operational emissions three primary areas: reducing carbon emissions,
technologies create new challenges for meeting increasing use of carbon-free electricity, and
(Scope 1 and 2).
sustainability commitments across the tech sector. carbon removal. We made meaningful progress
As we take stock as a company in 2024, we remain Accelerating carbon removal.
on carbon-free electricity and carbon removal in
resolute in our commitment to meet our climate Designing for circularity to minimize waste and FY23. Microsoft has taken a first-mover approach to
goals and to empower others with the technology reusing cloud hardware. supporting carbon-free electricity infrastructure,
needed to build a more sustainable future. making long-term investments to bring more carbon-
Improving biodiversity and protecting more land
free electricity onto the grids where we operate.
than we use.
Foreword continued
In 2023, we increased our contracted portfolio of Leaders in every area of the company have stepped Water positive 2 Our new datacenters are designed and
renewable energy assets to more than 19.8 gigawatts up to sponsor and drive this work. This led to the We take a holistic approach to becoming optimized to support AI workloads and will
(GW), including projects in 21 countries. In FY23, development of more than 80 discrete and significant water positive, which includes water access, consume zero water for cooling. This initiative aims
we also contracted 5,015,019 metric tons of carbon measures that will help us reduce these emissions— replenishment, innovation, reduction, and policy. to further reduce our global reliance on freshwater
removal to be retired over the next 15 years. We are including a new requirement for select scale, high- In 2023, we achieved our water access target by resources as AI compute demands increase.
continuing to build a portfolio of projects, balanced volume suppliers to use 100% carbon-free electricity providing more than 1.5 million people with access to 3 We are partnering to advance water policy.
across low, medium, and high durability solutions. for Microsoft delivered goods and services by 2030. clean water and sanitation solutions. We contracted In 2023, we joined the Coalition for Water
As a whole, this work builds on our multi-prong water replenishment projects estimated to provide
Carbon reduction continues to be an area of Recycling. Over the coming year we will finalize a
strategy, this year focusing on the following: more than 25 million m3 in volumetric water benefit
focus, especially as we work to address Scope position and strategy for water policy.
3 emissions. In 2023, we saw our Scope 1 and 2 1 Improving measurement by harnessing the over the lifetime of these projects—enough water
to fill about 10,000 Olympic sized swimming pools. 4 We are developing innovative scalable
emissions decrease by 6.3% from our 2020 baseline. power of digital technology to garner better
Finally, we continue to drive innovation in water, replenishment projects in high water stress
This area remains on track to meet our goals. But our insight and action.
through first-of-their kind replenishment projects like locations where we operate datacenters.
indirect emissions (Scope 3) increased by 30.9%.
2 Increasing efficiency by applying datacenter We recently announced Water United, a new
In aggregate, across all Scopes 1–3, Microsoft’s FIDO, which leverages AI-enabled acoustic analysis
innovations that improve efficiency as quickly initiative to unite public and private sectors in
emissions are up 29.1% from the 2020 baseline. to reduce water loss from leakage.
as possible. reducing water loss from leakage across the
The rise in our Scope 3 emissions primarily comes Looking ahead, as our datacenter business continues Colorado River Basin.
3 Forging partnerships to accelerate technology
from the construction of more datacenters and to grow, so does the need to minimize our water
breakthroughs through our investments and AI
the associated embodied carbon in building consumption and replenish more than we consume Zero waste
capabilities, including for greener steel, concrete,
materials, as well as hardware components such as in these operations. In FY23 our progress on water Our journey to zero waste includes reducing waste
and fuels.
semiconductors, servers, and racks. Our challenges accelerated, and we know we need to implement at our campuses and datacenters, advancing circular
are in part unique to our position as a leading cloud 4 Building markets by using our purchasing an even stronger plan to accelerate it further. cloud hardware and packaging, and improving
supplier that is expanding its datacenters. But even power to accelerate market demand for these We therefore are investing in our water positive device and packaging circularity. In FY23, we
more, we reflect the challenges the world must types of breakthroughs. commitment in four ways: achieved a reuse and recycle rate of 89.4% for
overcome to develop and use greener concrete, 5 Advocating for public policy changes that will 1 We are taking action to reduce the intensity servers and components across all cloud hardware,
steel, fuels, and chips. These are the biggest drivers accelerate climate advances. with which we withdraw resources by a target that is increasingly important as needs for
of our Scope 3 challenges. continuing to design and innovate in order to cloud services continue to grow. In 2023, we also
We have launched a company-wide initiative to minimize water use and achieve our diverted more than 18,537 metric tons of waste from
identify and develop the added measures we’ll intensity target. landfills or incinerators across our owned datacenters
need to reduce our Scope 3 emissions. and campuses, and we reduced single-use plastics in
our Microsoft product packaging to 2.7%.
Foreword continued
From expanding our Circular Centers to piloting As the world experiences worsening impacts of
programs that give a second life to used fiber optic
“ The shift from pledges to
climate change, we are also helping to put planetary
cables through partnerships with local technical data into the hands of researchers, governments, progress requires action,
schools, we are working to keep materials in use companies, and individuals through the Planetary transparency, and accountability.”
longer and approach our work at every stage with Computer. We are providing open access to
circularity in mind. We are accelerating our work to petabytes of environmental monitoring data to help Last year, Microsoft CEO Satya Nadella called climate
reuse and recycle cloud hardware wherever possible, empower people with actionable information to change “the defining issue of our generation.” To
and launched two new Circular Centers in Quincy, protect their communities. meet this generational challenge, we are putting
Washington and Chicago, Illinois in 2023. sustainability at the center of our work. With each
Microsoft’s sustainability progress requires global emerging technology, with each new opportunity,
Protecting ecosystems Customer and global sustainability engagement. We are investing in innovative we ask ourselves an important question: how can we
We have committed to protect more land than In last year’s Environmental Sustainability Report, solutions, advancing research, and advocating advance sustainability?
we use by 2025, while preserving and restoring we announced that we were expanding our for policies that we believe can drive progress
at scale. A hallmark of this effort has been our As we strive to answer that question, we are
ecosystems in the areas where we live and work. ambition to help advance sustainability for our
Climate Innovation Fund (CIF)—our $1 billion developing new approaches, experimenting with
As of FY23, we exceeded our land protection target customers and the world. In 2023, we continued
commitment set in 2020 to advance innovation new partnerships, and learning as we go. We are
by more than 40%. At this point, 15,849 acres of this work to empower our customers and partners
beyond Microsoft’s four walls. To date the CIF has optimistic about the role technology can continue
land have been legally designated as permanently on their own sustainability journey by creating the
allocated $761 million toward innovative climate to play in accelerating climate progress, and we
protected compared to our goal of 11,000 acres. technology needed to better manage resources and
technologies1 including commercial direct air look forward to working with others on this critical
optimize systems. On a global scale, we focused
We are incorporating green business practices capture technologies, sustainable aviation fuel (SAF), journey for all of us.
on accelerating innovation, research, and policy,
that support the surrounding ecosystems near industrial decarbonization, and more.
not only for ourselves but also to support a more
our campuses and datacenters. This includes
sustainable world for all. Our science, research, and AI for Good teams are
regenerative design solutions around our datacenters
that enhance local biodiversity, improved stormwater The shift from pledges to progress requires action, also working to accelerate solutions and develop
climate resilience with AI. In November 2023, we Brad Smith
management, and contributing to climate resilience. transparency, and accountability. Microsoft Cloud
published a whitepaper and playbook that expands Vice Chair and President
We are also piloting AI-driven Microsoft technology for Sustainability is helping customers unify data
to provide insights into the overall health of the and garner richer insights into the sustainability on the incredible potential of AI for sustainability.
ecosystem and inform future actions. of their business. In 2023, we expanded Microsoft Through our AI for Good team, we are collaborating
Sustainability Manager to include Scopes 1, 2, and with the United Nations to research the use of AI
to advance the Early Warning for All Initiative, with Melanie Nakagawa
all 15 categories of Scope 3 carbon emissions to
a goal of better understanding the populations Chief Sustainability Officer
help track progress and inform action across an
organization’s operations and value chains. that may be at risk of extreme weather events and
other threats.
2023 highlights
Carbon Water Waste Ecosystems
Total renewable electricity Total contracted water Total amount of solid waste diverted Total amount of land
use in FY23 replenishment since 2020 from landfills and incinerators FY23 protected in FY23
23.6 million MWh 61.7 million m 3

18,537 metric tons 15,849 acres
This would be enough to power Paris with This is enough water to fill over This is equivalent to the weight of This is equivalent to over
renewable electricity for about two years. 24,000 Olympic sized swimming pools. over 45 commercial passenger jets. 9,000 soccer pitches.
19.8 gigawatts (GW) of renewable energy assets We met our water access target by providing 18,537 metric tons of solid waste were diverted 15,849 acres were designated as permanently
were contracted, including projects in 21 more than 1.5 million people with access to clean from landfills and incinerators across our owned protected. We exceeded our land protection
countries around the world. water and sanitation solutions. datacenters and campuses. target of 11,000 by more than 40%.
We contracted 5,015,019 metric tons of carbon Our new datacenters are designed and optimized Our reuse and recycle rates of servers and Through the Microsoft Datacenter Community
removal in FY23, and continue to build a to support AI workloads and will consume zero components across all cloud hardware reached Environmental Sustainability program we are
portfolio of projects, balanced across low, water for cooling. 89.4% in FY23. responding to local needs in the communities
medium, and high durability solutions. that host Microsoft datacenters and where our
We reduced single-use plastics in our Microsoft
employees live and work.
product packaging to 2.7% in FY23.
How we work
Our sustainability journey starts with getting our
own house in order. In 2020, we set bold targets to
be a carbon-negative, water-positive, zero-waste
company that protects ecosystems by 2030. We are
committed to sharing our progress, challenges,
and learnings through our annual Environmental
Sustainability Report to help accelerate global
progress toward net zero.
We recognize that our actions alone will not solve
the climate crisis. As a global technology provider,
we also believe we have a role to play in supporting Microsoft sustainability: Customer sustainability: Global sustainability:
the thousands of customers and partners who put Taking care of our own Delivering digital technology Enabling a more sustainable world
their trust in Microsoft. We think about Microsoft’s environmental footprint for net zero
role in sustainability through three spheres of
Our sustainability work starts with taking Microsoft is committed to providing innovative Microsoft’s actions alone cannot solve the climate
influence: Microsoft sustainability, customer
accountability for our operational footprint. digital technology to help build a more sustainable crisis. As a global technology leader, we are also
sustainability, and global sustainability.
This means taking accountability for our operational world. From managing environmental footprints with committed to helping build the enabling societal
footprint across our campuses, datacenters, Microsoft Cloud for Sustainability to accelerating conditions that will support a net zero economy.
devices, software, and value chain. We look at our innovation for new climate technologies, We’re focused on accelerating the availability of
operations across the entire life cycle of assets we’re working to empower our customers and new climate technologies, strengthening our climate
and products, from design to building, usage, partners across industries. We are advancing policy agenda, helping to develop a more reliable
and end of life. We are committed to sharing our greener software and reducing carbon intensity and interoperable carbon accounting system,
learnings, accelerating markets, scaling solutions to improve device sustainability, and helping advocating for skilling programs to expand the
across our value chain, and being transparent about organizations measure and manage the health of green workforce, and working to help enable a just
our progress. the planet’s natural ecosystems with the Microsoft energy transition.
Planetary Computer.
Microsoft sustainability
How are we
addressing our
environmental
footprint?
Our sustainability work starts with taking Carbon 10
accountability for our operational footprint. In 2020, Water 23
we made a bold set of commitments: to be a carbon
Waste 35
negative, water positive, zero waste company that
protects ecosystems—all by 2030. Ecosystems 46
We are committed to sharing our learnings,

accelerating markets, scaling solutions across
our value chain, and being transparent about
our progress.
Captured by:
Emilia Zamora
Sourcing Engineer,
United States
Getting
Amid this optimism, we face the realities of the
complexity of the challenge. Addressing Scope 1, 2,
and 3 emissions requires partnership and systemic
to carbon
action. We need to decarbonize supply chains
and take action to build the carbon-free electricity
infrastructure needed by Microsoft, our suppliers,
5M
negative
our partners, and the world.
In FY23 our emissions increased by 29.1% across In FY23, we contracted 5,015,019
Scope 1, 2, and 3 from our 2020 baseline, as we metric tons of carbon removal
continue to invest in the infrastructure needed to to be retired over the next
advance new technologies. 15 years.
Carbon
Since 2020, our Scope 1 and 2 emissions have
Improving the measurement and 14
efficiency of our operations decreased by 6%. This result is driven by
our ongoing work to advance clean energy
Building markets and driving progress 18
procurement, green tariff programs, and use of
Learnings and what’s next 22 unbundled renewable energy certificates.
Scope 3 accounts for over 96% of our total
Our approach
emissions, which includes emissions from our supply
Our commitment to becoming carbon negative chain, the life cycle of our hardware and devices,
requires unprecedented innovation and partnership. and other indirect sources. Our Scope 3 emissions
Over the last four years since setting our continue to be our most significant decarbonization
sustainability targets, thousands of companies have challenge. Progress will take deep collaboration
also joined the call to reach a net zero future and are across industries.
taking steps, big and small, to help make that future
Microsoft has taken a first-mover approach, making
a reality. This year, technologies like AI brought
long-term investments to bring more carbon-free
renewed promise of the role innovation can play in
electricity onto the grids where we operate, and
accelerating progress. From improving measurement
we continue to advocate for the expansion of clean
to increasing datacenter efficiency and improving
energy solutions around the world.
energy transmission, technology can be a powerful
accelerant for the pace and scale the world needs to
achieve net zero.
Our approach continued
Our journey to Our targets Our progress

carbon negative Reducing direct emissions
We will reduce our Scope 1 and 2 emissions to near zero by increasing
Scope 1 and 2 emissions
Our Scope 1 and 2 emissions decreased by 6% from the 2020 base year. This
energy efficiency, decarbonization of our operations, and reaching 100% result is driven by our ongoing work to advance clean energy procurement,
We are committed to being carbon negative renewable energy by 2025. green tariff programs, and use of unbundled renewable energy certificates.
by 2030 and by 2050 to remove from the
atmosphere an equivalent amount of all the Reducing value chain emissions Scope 3 emissions
carbon dioxide our company has emitted either By 2030, we will reduce our Scope 3 emissions by more than half from Our value chain or Scope 3 emissions increased by 30.9% from our 2020
directly or by our electricity consumption since a 2020 baseline. baseline. Microsoft continues to work to scale corporate clean energy
we were founded in 1975. purchases across our supply chain and invest to help decarbonize hard-to
abate industries, including steel, concrete, and other building materials used
in our datacenters.
Replacing with 100/100/0 carbon-free energy 19.8 GW of carbon-free energy

By 2030, 100% of our electricity consumption will be matched by zero carbon In 2023, we increased our contracted portfolio of renewable energy assets to
energy purchases 100% of the time. over 19.8 gigawatts (GW), including projects in 21 countries around the world.
Removing the rest of our emissions 5M metric tons of carbon removal

By 2030, Microsoft will remove more carbon than it emits. By 2050, We contracted 5,015,019 metric tons of carbon removal in FY23. We are
we will remove an amount of carbon equivalent to all our historical continuing to build a portfolio of projects, balanced across low, medium,
operational emissions. and high durability solutions.
Working to help decarbonize the
industrial sector
At Microsoft, we are also partnering to

address carbon-intensive industries such as
building materials, chemical products, and
fossil fuels for aviation, shipping, and trucking.
Carbon Table 1–Breaking down our FY23 Scope 3 emissions by source

Microsoft’s Scope 3 emissions continue to account for more than 96% of our total emissions, with the vast majority of these emissions coming from two categories upstream, Purchased Goods and Services
(Category 1) and Capital Goods (Category 2), and one downstream, Use of Sold Products (Category 11).
Scope 3 Categories
1
1 Purchased Goods & Services 36.23%
2 Capital Goods 38.24%

3 Fuel-and Energy-Related 3.39%
Activities (Market-Based)
4 Upstream Transportation 1.99%
Scope 3 2
Scope 1 5 Waste 0.05%
0.94%
96.50% 6 Business Travel
7 Employee Commuting
0.81%
1.22%
9 Downstream Transportation 0.45%
13 12
11 Use of Sold Products 14.05%
Scope 2 12 End of Life of Sold Products 0.03%

11
2.56% 13 Downstream Leased Assets 0.05%
3
4
9
6 Scope 2 and 3 emissions included in this chart are market-based.
7
5 Scope 3 emissions are management criteria values.
Find out more in our Data Fact Sheet

Key definitions
Carbon Table 2–Tracking progress toward carbon negative by 2030
Carbon-free electricity (CFE)
Microsoft’s overall emissions increased by 29.1% in FY23, in relation to our base year. Additionally,
Microsoft refers to the broader suite of technologies Scope 1 Scope 2 Scope 3
we retired 605,354 metrics tons of carbon removal as part of achieving our annual target to be
compatible with a fully decarbonized electricity
carbon neutral.
system as CFE. CFE technologies include solar, Direct Indirect Indirect
geothermal, sustainable biomass, hydropower, emissions emissions emissions
A Scope 3 B Scope 2 C Scope 1 created by a from the from all other
nuclear, carbon capture utilization and storage, and
company’s consumption activities
Retirements from Retirements from Projected Target carbon others with zero direct emissions.
D E F G activities of the in which we’re
avoided emissions carbon removal carbon removal emissions
Renewable energy electricity or engaged
Electricity technologies including wind, solar, heat we use
B C
geothermal, sustainable biomass, and sustainable
15M B C B C hydropower.2
B C
Scopes 1, 2, and 3
Since setting our targets
12M
Indirect emissions from all other activities up in 2020, data has played an
9M and down the value chain such as upstream and increasingly important role
downstream transportation, materials, and end-of-
Metric tons CO2e
6M A
A
life impacts, as well as all suppliers’ direct Scope 1
in our journey by allowing us
A A
and 2 emissions. to better measure and manage
3M our resource consumption.
G Scope 3 represents over 96% of Microsoft’s
annual emissions in FY23. Our Scope 3 emissions
0M
result primarily from the operations of our tens
of thousands of suppliers (upstream) and the use
-3M E E E F
D E of our products across millions of our customers
(downstream).
-6M
FY20 FY21 FY22 FY23 FY30 Tackling Scope 3 means decarbonizing industrial
Base year Current year Target year processes such as steel, concrete, and other
building material production for use in our campus
and datacenter construction, as well as jet fuel for
Find out more in our Data Fact Sheet business travel and logistics.
Improving the Datacenter efficiency

Measuring efficiency
We support carbon-free
electricity infrastructure
measurement
through procurement
Power usage effectiveness (PUE) is a ratio that and investment.
describes how efficiently a datacenter uses energy.
and efficiency The lower the number, the better the score.
We design and build Microsoft datacenters as close
of our operations to a PUE of 1.0 as possible. This year our datacenters

delivered a design rating of 1.12 PUE and, with
each new generation, we will strive to be even
more efficient.
Reducing the carbon intensity of our operations is
the first pillar of our approach to carbon negative. Transitioning servers to a low-power state
From the construction of our datacenters and We continue to seek opportunities to reduce server
campuses to our daily operations, efficiency is built energy consumption. Using low-power server states,
into our design and use. Since setting our targets in we observed a reduction in energy usage of up to
2020, data has played an increasingly important role 25% on unallocated servers, with a corresponding
in our journey by allowing us to better measure and reduction in Scope 2 emissions. This year, we Improving resource utilization In 2023, these initiatives have directly contributed
manage our resource consumption. At Microsoft, expanded our deployment of this technique from a to a roughly 7% reduction in datacenter power
Datacenter resources are traditionally designed
we strengthened our supply chain methodologies in few thousand servers in 2022 to around one million infrastructure and the associated embodied carbon.
and built to accommodate peak power demands,
2023 to drive progress in major sectors like building by the end of 2023. This initiative reduces energy often resulting in underutilization and the necessity Microsoft is also increasing server utilization by
materials, sustainable aviation fuel, and hardware. usage by thousands of megawatt-hours per month to construct new datacenters. Microsoft is focused oversubscribing central processing unit (CPU) cores
across our global datacenters. A similar initiative on improving datacenter efficiency by minimizing of internal workloads that have low CPU utilization.
targets servers that are awaiting maintenance, peak power consumption, effectively harnessing The direct impact in 2023 was an approximately
reducing energy usage by hundreds of megawatt- unused power, and maximizing server density 1.5% reduction in datacenter hardware needs for the
hours per month. within existing datacenters. This is achieved through Microsoft Azure platform–an improvement of three
power harvesting driven by service level agreements times over 2022 with a proportional reduction in
(SLAs), intelligent power-aware workload allocation, associated embodied carbon.
and utilizing the inherent redundancy in Microsoft
internal services to tap into datacenter capacity that
is conventionally reserved for use only during power
grid or infrastructure failures.
Improving the measurement and efficiency of our operations continued
Building operations Innovations in low-carbon concrete Additionally, an underground garage is set to be Achieving net zero is not something we can do
and construction To minimize our carbon impact in constructing completed in FY24 as part of our Redmond campus alone. As 76.5% of our total emissions originate from
datacenters, we build our datacenters to meet modernization project and will include 130 EV our suppliers, we have a role to play in bringing
Infrastructure decarbonization charging stations with 176 additional EV charging the global supply chain with us on our journey to
LEED Gold certification, with 37 datacenters already
Our sustainability standards for new construction meeting this goal globally.3 LEED buildings also stations planned for future phases. net zero.
continue to expand to meet our climate goals. use less water, utilize renewable energy and fewer As we continue to electrify our global fleet by 2030, By leaning into education and investing in
New campus projects require the procurement of resources, create less waste, and preserve land and these projects will help us test and implement our meaningful tools for carbon reduction, we can move
high-efficiency refrigeration systems, all-electric habitat. One example of innovation in this area is a EV infrastructure and apply it to more campuses these efforts up the supply chain tier.
kitchens and mechanical systems, and non-fossil- series of pilots completed this year using a net- across the globe.
fuel-powered backup power systems. Combustion is negative embodied carbon limestone alternative to
no longer permitted for daily use in any new office traditional concrete. Derived from algae cultivation in Improve measurements across our
construction project in our standard. We have also concert with other alternative cementitious materials, supply chain
expanded our requirements to reduce embodied the combination yielded a concrete mix that met
carbon in interior materials. While we know that the majority of our emissions
our performance requirements and achieved an
are from Scope 3, over 96% in 2023, we also needed
estimated 65% embodied carbon reduction from
greater precision on the drivers contributing to these
conventional concrete of a similar strength.
emissions. What we found is that these emissions
Fleet electrification have three primary, interrelated drivers:
On Microsoft campuses around the world, we are 1 Electricity use in both upstream embodied in
making progress toward electrifying our fleet and what we purchase, and downstream from the
eliminating dependence on fuel burning vehicles. usage of our products.
To establish the infrastructure needed to support 2 Key material procurement including
our goal of operating a 100% electric fleet by 2030, semiconductors, steel, cement, aluminum, We are working to scale carbon accounting
76.5% we’re constructing an Electric Vehicle Fleet Facility and plastics. methodologies to drive progress across our
supply chain.
that will house, charge, and maintain our electric
3 Fuel use from direct travel, commuting, logistics,
commute fleet of the future at our Redmond
and embodied in what we purchase.4
In FY23, 76.5% of our total emissions headquarters. The project is currently in the design
originated from our suppliers. We believe phase and is pursuing LEED Platinum certification.
Microsoft also has a role to play in bringing
the global supply chain with us on our
journey to net zero.
Partnering with our suppliers Advancing procurement Reducing emissions in Cloud Logistics Measuring semiconductor emissions
Access to granular emissions data from our supply of carbon-free electricity In 2023, the Cloud Logistics team implemented a Driving targeted Scope 3 emission reductions
chain is essential to identifying where our largest When we identified a near-term need to support three-pillar strategy for emissions reduction: requires more precise measurement.
Scope 3 reduction opportunities exist and how these suppliers in decarbonizing their electricity For semiconductors, this means measuring emissions
1 Apply industry-leading data models, based on
can be actioned. consumption, especially our smaller- to medium- drivers down to the square centimeter of silicon–a
the Global Logistics Emissions Council (GLEC)
sized suppliers who traditionally lack the expertise unit of measure required for life cycle assessment
To understand the full extent of our Scope 3 carbon Framework, to obtain detailed emissions data for
and resources to navigate this process on their (LCA)-based methodologies–and applying product-
footprint, we piloted a new feature in Microsoft each shipment. This “digital twin” of our
own, we partnered with climate solutions expert specific emissions factors. We modeled this for
Sustainability Manager called the environmental, operations data earned us a finalist spot in
3Degrees to launch Supplier REach, a renewable all high-impact components installed and sold
social, and governance (ESG) value chain solution. Gartner’s 2024 “Power of the Profession” award.
electricity portal. by Microsoft.
In 2023, Microsoft Procurement acted as customer
2 Utilize data to optimize our supply chain,
zero, as we used our own technology and utilized The portal assists with Microsoft supplier evaluation This advancement, which reflects Microsoft’s
identifying efficiency gains that helped us avoid
the ESG value chain solution as its disclosure and procurement of high-quality carbon-free application of leading-edge research findings from
over 90,000 mtCO2e emissions. These savings
platform to successfully collect emissions from electricity options based on factors such as their imec’s Sustainable Semiconductor Technologies
were achieved by shifting cargo to more carbon-
top in-scope suppliers. Additionally, due to the geography and energy load. and Systems (SSTS) program, enables us to quantify
efficient transportation modes, consolidation,
flexibility the ESG value chain solution offers, which specific products, manufacturers, geographic
and network design.
the Procurement Sustainability team was able to locations, and production stages are driving
customize the platform to collect more advanced, 3 Drive transformational solutions in trucking, emissions. This specificity deepens our supplier
granular emissions data from suppliers. In the future, shipping, and aviation. In partnership with our engagement efforts and focuses our policy and
the ESG value chain solution will enable customers largest transportation service providers, we have advocacy discussions.
to customize and collect detailed emissions data enabled them to source low-carbon or carbon-
directly from suppliers. free logistics services. This led to the successful
deployment of electric vehicles and
sustainable fuels.
90K
To further our goal of sustainable transportation, we
joined collaborations like the Sustainable Aviation
Buyers Alliance (SABA) and we have launched a new
initiative with cargo-owning peers and suppliers that
By using data to optimize our logistics supply
plans to build the first electric interstate trucking
chain, 90,000 mtCO2e emissions were avoided.
corridor in the United States.
Reducing the impact of our Greenhouse Gas Protocol

LinkedIn supply chain In 2023, we submitted responses to four Greenhouse
Our teams at LinkedIn have developed Healthy Gas Protocol (GHGP) surveys that kicked off GHGP’s
& Sustainable Building Materials specifications
Building transparency
comprehensive review of its corporate carbon
to guide our Workplace Design and Build team. Collaboration across Microsoft has led us to accounting guidance. Microsoft’s survey responses
We have also provided input to and utilized the adapt an effective approach to shift from spend- articulated a vision for more accurate, consistent,
Embodied Carbon in Construction Calculator (EC3) to process-based methodologies for measuring impact-relevant carbon accounting. We also
for identification and evaluation of the carbon embodied carbon impact of construction materials. published a white paper laying out Microsoft’s
intensity of workplace construction materials This methodology is based on a framework using approach, challenges, and innovations with respect
alternatives. We have piloted a variety of initiatives, today’s best available third-party verified data to carbon accounting.
including electrified kitchens in four sites, battery via Building Transparency’s EC3 tool. This new
back-up and solar installation in one site, and methodology aims to appropriately incorporate Cognitive visual learning
One of the key strategies employed to reduce
installation of fault detection diagnosis (FDD) actual global warming potential of the materials we To improve data quality and reduce manual entry
Scope 3 emissions of suppliers’ purchased foods
in one site. We also conducted a battery versus buy, where data is available, with existing spend- errors, we have been developing a cognitive visual
in FY23 was to increase local purchasing of
generator carbon life cycle study. based methodologies, as we work to improve our learning (CVL) tool in partnership with the Microsoft
agricultural products to, or above, 20% of total
Scope 3 measurement and emissions. Finance team. The CVL AI tool will be capable
Expanding campus initiatives purchasing spend, while partnering with regional
producers focused on climate-smart agricultural of automatically reading utility invoices (such as
At our LinkedIn campus in Omaha, Nebraska, we PDFs, Excel files, or image files) in any language
practices and regenerative farming.
have been accessing direct renewable energy and extracting the required data. Ultimately, this
through our parking canopy solar installation since Mitigating carbon impacts of travel innovative tool will streamline reporting on our utility
July 2022. In FY23, this solar installation project RY to source image consumption and replace a time-consuming third-
We have also implemented an employee-facing
provided approximately 17% of the building’s total of construction party application that is subject to manual error.
travel solution called Tripkicks which supports our
electricity, including helping to power the all-
corporate sustainability initiatives. In partnership
electric kitchen.
with BCD and Advito, Tripkicks allows employees
Reducing carbon through our to better understand their carbon impact before
food programs they travel. As employees plan their trips, they
At LinkedIn, we are committed to reducing are able to see accurate and ISO-Certified carbon
the carbon footprint of our food program and dioxide figures, powered by Advito’s GATE4 carbon
have implemented various initiatives to achieve emissions methodology, for each flight option,
that goal. identifying the most sustainable options.
Building markets Building markets

Accelerating carbon-free electricity
Procuring carbon-free electricity
Incorporating environmental justice principles into our carbon-free electricity
and driving circularity

Microsoft’s unique position as one of the world’s
procurement, we partnered with EKOenergy’s Climate Fund to enable the
installation of solar-powered refrigeration for a Kenyan fishing village, offering ice
progress Sustainability and clean water at 20% lower prices for 2,000 households and addressing food
largest corporate renewable energy purchasers security and economic hardship by reducing fish harvest loss.
provides the opportunity and responsibility to help
Champion:
facilitate a circular economy in the renewable energy John Tien We have begun embedding community funds in global power purchase
sector. Our leadership is enabling and supporting agreements (PPAs)—for example, a 366-MW renewable energy deal in Ireland
The ability of Microsoft and the technology sector to with European developer Statkraft includes such a fund to support local
the market due to the scale of our procurement,
meet net zero targets is dependent on our collective At Microsoft, I play community needs.
laying the foundations for renewable energy
ability to procure carbon-free electricity and a role in achieving
infrastructure reuse and recycling, concurrently We also partnered with Clearloop to expand equitable access to clean energy
decarbonize our supply chains. Microsoft continues our sustainability
addressing environmental, community, and supply and help decarbonize the grid in the Mississippi Delta region, enabling a
to build and scale carbon-free electricity through goals by working
chain challenges. In advancing a circular economy 6.6-megawatt project in Mississippi through an upfront payment for long-term
our procurement of renewable energy and investing with suppliers
for all, we follow three principles: renewable energy credits. Microsoft helped get the project online and provided
to bring more carbon-free electricity onto the grids to implement
where we operate. As one of the largest corporate 1 Requiring recycling of renewable support for Clearloop’s model.
best practices
purchasers of renewable energy, we continue to seek energy infrastructure. and technology
ways to diversify and scale-up supply of impactful solutions in the
2 Requiring recycled materials in renewable energy
renewable energy and mechanisms enabling access sourcing of memory
infrastructure manufacturing.
for all. semiconductors.
3 Using our voice on circular economy for
The positive impact
renewable energy public policy.
of these efforts
on Microsoft, our
customers, and
the planet inspires
6.6 MW
We are partnering with Clearloop to help
me to believe that
we all have the
power to make a
difference, both in
decarbonize the grid in the Mississippi Delta our personal and
region, enabling a 6.6-megawatt project. professional lives.
Building markets and driving progress continued
Advancing carbon dioxide removal (CDR) Progressing towards 2030

Carbon Table 3–Tracking progress toward carbon negative by 2030
At Microsoft, we continue to support the In FY23, we contracted 5,015,019 metric tons of
development of carbon removal. In FY23 we carbon removal to be retired over the next 15 In FY23, we procured 5.015 million metric tons of carbon removals. Carbon removal contracted each
accelerated procurement of various pathways, years. Many of these projects entail multi-year year includes credits retired in the same year and to be retired in future years, in support of our annual
building on our long-term agreement framework. commitments to carbon removal. Altogether we in-year carbon neutrality and 2030 carbon negative targets.
We worked through the details in each of those expect our contracts signed as of December 2023 to
agreements to make sure we are building this first provide 875,000 metric tons toward our 2030 goal of
generation of large-scale carbon dioxide removal greater than 5 million metric tons. Projects signed in
projects to be as impactful as possible. 2023 include the following.
These multi-year agreements draw on our

renewable energy procurement experience and are
structured to help projects obtain external financing.
Reforestation in the Amazon: In November 2023,
we signed a long-term offtake with Mombak for
carbon removal from reforestation in the Brazilian
Total metric
tons contracted 5,015,019
Our carbon removal contracts reflect general Amazon. We believe Mombak’s best-in-class project
industry risks along with the specifics of individual design and work to bolster a crucial carbon sink and
projects to ensure we are buying additional, durable, biome represent an extraordinary win for the climate
measurable, and net negative carbon credits. and local communities.
As we fill our balanced portfolio of greater than Breakdown 3,549,242 1,465,777

5 million metric tons a year starting in 2030, we are
also buying novel solutions, for example enhanced
rock weathering, to test what else will be ready for
scale by 2030.
0M 1M 2M 3M 4M 5M 6M
Metric tons
5M
In FY23, we procured 5.015 million metric tons
Annual in-year neutrality target 2030 carbon negative target
of carbon removal in support of our carbon

neutral and negative targets. Find out more in our Data Fact Sheet
Landmark BECCS in Europe: Our recent agreement Scaling up carbon removal Supporting global progress Microsoft is the first large commercial entity to use
with Orsted shows the near-term potential of Heirloom direct air capture: Heirloom’s next direct Powerex’s wholesale 24×7 Clean Load Service for
Meeting our carbon negative goals is tightly linked
bioenergy with carbon capture and storage (BECCS). air capture (DAC) projects will prove their potential its new datacenter in Washington state. Under this
with global decarbonization. Supporting carbon-
This project will add carbon capture to an existing to scale towards the megatons per year that society agreement, Powerex will match Microsoft’s hourly
free electricity infrastructure through procurement
heat and power plant and then store the carbon needs this decade to stay on track for the goals datacenter demand with direct deliveries of carbon-
and investment is critical to making this happen. It’s
dioxide geologically to provide significant carbon of the Paris Agreement. Heirloom’s technology free hydro, solar, and wind power on a 24-hour,
a challenge that is bigger than any one company,
removals and anchor the high durability category of making and breaking limestone to take carbon year-round basis—supplying reliable electricity
but Microsoft has taken a first-mover approach,
this decade. dioxide out of air is simplicity itself. to our datacenter while also supporting our
making long-term investments to bring more
100/100/0 goal.
Securing the sustainability of biomass for the Orsted Enhanced rock weathering: Our deals this year carbon-free electricity onto the grids where we
project and future biomass-based pathways was a with UNDO and Lithos explore the novel carbon operate. We continue to seek ways to diversify and During the hours that Microsoft’s contracted
major focus and drove us to support Carbon Direct’s removal pathways that will reduce outstanding scale-up supply of impactful renewable energy and renewable resources produce more electricity
cross-sector work on this topic alongside Frontier market uncertainties, and which could feasibly scale mechanisms enabling access for all. than the datacenter can use, Powerex will take the
Climate. We believe that the time for responsibly in the next several years. In addition to the science surplus renewable power, allowing hydro generation
scaling BECCS is here and look forward to the Partnering to scale clean energy to be reduced and water to be conserved for
of enhanced rock weathering (ERW), we note that
coming wave of project developments. innovative business models will be important to Microsoft partnership goals are threefold: achieve later use. This will enable clean deliveries back to
expand projects with such front-loaded costs. our own operational needs, accelerate the this datacenter in later hours, when Microsoft’s
development of technologies that will help our contracted renewable resources produce less
customers and partners, and rapidly increase the electricity than the datacenter needs.
scale of the global sustainability market.
Microsoft and Helion announced an agreement to
In 2023, Microsoft increased its contracted provide Microsoft with electricity from its first fusion
portfolio of renewable energy assets to over 19.8 power plant. The plant is expected to be online by
gigawatts (GW) across 21 countries. We signed 2028 and will target power generation of 50 MW
new PPAs around the world, including with AES in or greater, dramatically shortening the projected
19.8 GW
We increased our contracted portfolio
Brazil, Constellation Energy in Virginia, Powerex in
Washington, Contact Energy in New Zealand, and
Lightsource bp in Poland.
timeline for commercially viable fusion energy.
The planned operational date for this first-of-its-kind
facility is significantly sooner than typical projections
for deployment of commercial fusion power.
of renewable energy assets to over
19.8 gigawatts.
We support carbon-free electricity infrastructure

through procurement and investment.
Advocating for clean energy infrastructure

The Cajuina wind project The Skyward Community Solar project
In August 2023, Microsoft hosted and participated
Microsoft’s first power purchase agreement In Oregon, we signed on as the major commercial in the Asia-Pacific Economic Cooperation (APEC)
in Brazil (154 MW) is sourced from the Cajuina partner on the Skyward Community Solar project, roundtable on GHG accounting standards on
Wind Complex, developed by AES Brasil, and a solar farm in the Greater Portland area that August 4 and the APEC Energy Ministers Meeting on
will be operated by an all-female operations generates nearly 3.6 million kilowatt-hours of August 15.
and maintenance (O&M) team. AES Brasil is clean energy each year. Clean electricity from the
the first company in the country to have a wind project is fed into the electric grid, replacing fossil Microsoft has a direct interest in an expanded
farm operated and maintained locally by a team fuels and reducing carbon emissions from our and clean electric grid; with over 60 Azure regions
composed entirely of women. workplace operations. operating now or coming soon, and more than 300
datacenters globally. Over half of these regions are
in APEC economies.
Investing in sustainable aviation fuel

In 2023, Microsoft entered a 10-year contract with
World Energy for sustainable aviation fuel (SAF)
certificates, aiming to replace 43.7 million gallons of
fossil jet fuel, and jointly funded a large-scale global
SAF purchase with International Airlines Group
(IAG). Additionally, Microsoft joined the Roundtable
on Sustainable Biomaterials (RSB), contributing to
Deerfoot solar project RSB’s sustainability framework and participating
The Deerfoot solar project in Canada (37 MW)
43.7M
in programs supporting SAF development.
is majority-owned (51%) by local First Nations, Together with RSB and Alaska Airlines, Microsoft
Chiniki and Goodstoney. This project is expected launched SAF-now.org, an educational resource
to generate economic returns for the Indigenous designed to empower key decision makers with
communities and contribute to the lasting Microsoft entered a 10-year contract with
information on topics most relevant to choosing SAF.
prosperity of the Nations for future generations. World Energy for sustainable aviation fuel
(SAF) certificates, aiming to replace 43.7
million gallons of fossil jet fuel.
Learnings Growing the supply

for clean energy will
Partnership and
investment remains
Scaling markets for
lower-carbon materials
Measurement plays an
important role in Scope
Sharing our learnings
to support global
and require policy advocacy
Microsoft decarbonization
critical for Scope 3
emissions reduction
requires investment
While lower-carbon building
3 reduction
Driving Scope 3 reductions
construction efforts
With our Redmond campus
what’s next policy advocacy is expected
to contribute to reducing our
Collaboration remains critical
to success, for Microsoft and
construction materials are
on the market today, they do
requires developing better data
visibility and more accurate
modernization project still in
progress, we are continuing to
upstream emissions in two ways: our suppliers. While many of not exist at the volume, in and actionable methodologies catalog emissions, carbon, water,
our suppliers are willing and the geographies, nor at the than are generally available and energy use data. This data
1 Helping to create more direct
want to reduce their footprints, scale needed to decarbonize today. With improved life cycle will inform future construction
corporate renewable
they may still face considerable the sector. We continue to assessment (LCA) methodologies and modernization efforts at
procurement options in
barriers like access to capital or pursue key mitigations to and detailed analysis of specific Microsoft campuses globally.
markets that are currently
market knowledge. embodied carbon risk through products, manufacturers,
difficult to access, as in much We will continue to share
extensive collaboration across geographic locations, and
of Asia-Pacific, thus increasing As we work to achieve our our learnings in hope that it
Microsoft datacenters. emissions life cycle stages, we
opportunities for reducing own operational needs, we are inspires greater sustainability
are better able to understand the
operational emissions in the also working to accelerate the Our actions are focused on in construction—as well as
complexity of our supply chain
near term. development of solutions that will accelerating the uptake of low- transparency in reporting—from
and which tangible levers we can
help our customers and partners, embodied carbon solutions other organizations large and
2 Contributing to the enactment pull both with our suppliers and
and rapidly increase the scale of and driving innovation through small in the future.
of policies that decarbonize through policy.
global sustainability markets. new building materials with the
the grids on which our
potential to drastically reduce Additionally, we are exploring
suppliers operate.
embodied carbon from those how technology, like AI and
These efforts can help to reduce materials. Building on our blockchain, can further increase
the amount of baseline emissions experience with other industrial accountability and traceability for
to be addressed through sectors, we will use forward our Scope 3 carbon emissions.
renewable procurement. contracting mechanisms to
spur the market supply of
lower-carbon materials.
Getting to
water positive 1.5M
In FY23, we met our water
Water In 2023, we continued to drive progress by focusing access target by providing
Reduction 26 on accelerating solutions to water challenges more than 1.5 million people
through innovation and partnerships. In 2023, we with access to clean water
Replenishment 28
nearly doubled our water replenishment portfolio, and sanitation solutions.
Access 30
and met our 2030 water access target to provide
Innovation 32 1.5 million people with access to clean water and
Policy 33 sanitation services. Our internal water fee continues
Learnings and what’s next 34 to play a critical role in funding replenishment and
access projects while providing an incentive to our
business groups to reduce water use.
Our approach
Amid this progress, we also believe Microsoft
Today, one in four people live in countries facing
has a responsibility to support our customers
high water stress, a number that is expected to
and the world in addressing the water crisis.
increase to one in three by 2050. We believe
Investments made across Microsoft operations are
Microsoft has an important role to play in protecting
made with a view to accelerating global progress.
freshwater resources in the areas where we operate
Our investments in innovation will help establish
and around the world. We recognize that water
new approaches to reducing water consumption,
reduction alone is not enough to address growing
and investments in replenishment will help scale
global water challenges—reduction, replenishment,
solutions and drive greater impact in the basins
access, innovation, and policy all play important
where we operate.
roles in our water positive journey.
Committing to improving water Keep community needs and impact

use efficiency Five pillars of
at the forefront
water positive
As our datacenter business continues to grow, and In 2023, we became more intentional about
we balance the need for power and water, Microsoft Reducing our water integrating environmental justice into our
remains committed to reducing the intensity with footprint across our replenishment program.
which we withdraw resources, focusing on being direct operations We aim to align our project investments with
as efficient as possible. Our datacenter strategy
the needs and desires of the local communities
puts us on track to achieve a 40% water intensity
and consider how we can support marginalized
reduction target by 2030. We will continue to
Replenishing more communities while avoiding potential unintended
design and innovate to minimize water use and
water than we consume consequences of projects that could cause harm
help break the relationship between AI growth and
across our operations to those communities. In 2023 we refreshed our
resource consumption.
criteria to ensure we keep environmental justice at
the forefront of our replenishment investments and
project assessment. We will continue to evolve our
Increasing access approach to meet the needs of the communities
to water and where we work.
sanitation services
1 Projects should not pose any potential health
impacts on local communities.
2 Community members should be involved in the We prioritize water By partnering with
Scaling water solutions decision-making process for projects that directly
replenishment projects
through innovation that fit a basin’s credible organizations
affect their communities. unique needs.
and digitization that have an in-depth
3 A process to address community concerns should
exist for projects that directly affect
understanding of local
those communities. community needs, we
Advocating for have the best likelihood
4 Projects should consider the cultural and
effective and innovative
water policy
historical significance of the area and ensure that of ensuring that we keep
there are no impacts on cultural resources.
community impact at
the forefront.

water positive Replenishing more water than we use by 2030
We will replenish more water than we consume across our global operations,
25.4 million m3 of water replenishment volume
In FY23, we contracted for replenishment projects that are estimated to provide
with a focus on water-stressed regions where we work. more than 25 million m3 in volumetric water benefit over the lifetime of these
projects. Since the inception of this program, projects contracted are estimated
As we work to be water positive, we continue to
to provide more than 61 million m3 in volumetric water benefit.
scale our efforts to reduce water use across our
operations, while increasing procurement from
alternative sources and investing in innovative Increasing access to water Over 1.5 million people with water access
replenishment and access projects. We will provide 1.5 million people with access to clean water and sanitation In FY23, we met our water access target by providing more than 1.5 million
services by 2030. people with access to clean water and sanitation solutions in Brazil, Chile, India,
Indonesia, and Mexico.
Reducing our water intensity Improving water efficiency

We will make progress against our target to improve water use efficiency by As of January 2024, we are on track to meet our 40% target. We remain
40% across our global, owned datacenter operations by 2030, from a 2022 focused on reducing the water intensity of our operations and will continue to
baseline. report on our progress in future sustainability reporting.
25.4M
In FY23, we contracted for replenishment
projects that are estimated to provide more
than 25.4 million m3 in volumetric water benefit.
Reduction Advancing best practices

In an ongoing effort to embed best practices into
Reducing water use at our campuses
As part of our Redmond campus modernization
Water Table 1–Measuring our annual
water consumption informs our
our methods, we have developed and implemented project, we’ve implemented new infrastructure replenishment targets
We take a holistic approach to water reduction our Sustainability Standards for new construction to significantly improve water use and reuse.
In FY23, our water consumption increased in
across our campuses and datacenters to drive projects, including requirements that reflect each of These improvements are estimated to yield over
alignment with our business growth. This data
efficiency and reuse. Innovation is a thread that runs Microsoft’s climate commitment targets. For water, 50% reduction in water use for the new facilities
from our operations informs the amount
throughout our work toward our water positive project design teams now create a water budget compared to pre-modernization.
of water we need to replenish. See p28 for
commitment, like piloting innovative approaches and water reuse plan early in the design phase. more information.
Indoors, we estimate a reduction in water use of
to reduce our water use intensity, and project The following updates are the latest in an ongoing
over 7 million gallons annually, through
investments we make. effort to improve our construction standards
implementing efficient features and constructing Total water consumption
and efficiency.
cisterns for rainwater capture.
A water budget quantifies and maps all water 8M
Outdoors, we estimate a reduction in irrigation
end uses and sources, potable and non-potable.
water of over 30 million gallons annually, through 6,399,415
This allows teams to target only non-potable sources
planting native and adaptive vegetation as well
7,843,744
for non-potable end-use and increase the use of 6M
as installing efficient irrigation systems.
recycled water and greywater. 4,772,890
We estimate that our Thermal Energy Center will 4,196,461
The new Sustainability Standards also require 4M
help save over 10 million gallons of water per
teams to develop a water reuse plan which outlines
year. The Thermal Energy Center at our Redmond
strategies to reduce, capture, and reuse water on the
Campus uses several unconventional approaches
construction site, for example, capturing stormwater 2M
to heat rejection, including geothermal heat
Water m3
from sediment ponds to be used later for dust
exchange, heat recovery chillers, and water
control and vehicle washing.
softening in its cooling towers.
0M
50%
While these water reduction strategies implemented FY20 FY21 FY22 FY23
through the Redmond campus modernization Base Current
projects are impactful, they also represent year year
Improvements as part of our Redmond important proofs-of-concept and testing grounds,
campus modernization project are estimated helping us apply learnings and techniques to other
to yield over 50% reduction in water use for campuses globally.
new facilities. Find out more in our Data Fact Sheet
Reduction continued
Maximizing cooling efficiency in Innovations at datacenters

existing datacenters In 2023, we expanded our usage of alternative water
sources, such as reclaimed and recycled water, in
In 2022, all owned datacenters that use water for
Texas, Washington, California, and Singapore, further
cooling underwent an audit to ensure operational
reducing our dependence on freshwater supply.
values aligned with design expectations.
We are harvesting rainwater to partially offset
Observed deviations were reviewed and corrected,
cooling and humidification needs at our Netherlands
which resulted in lower water and maximized water
and Ireland datacenters, and to offset humidification
usage efficiency.
at our Sweden datacenters. Rainwater harvesting
Datacenter water withdrawal and discharge are is also part of the design for new datacenters
closely tracked and used to monitor our water in Canada, England, Finland, Italy, South Africa,
consumption. Additionally, we are developing and Austria.
advanced prediction models that anticipate water
consumption based on real-time weather data.
Comparing anticipated and actual consumption
Our new datacenters are
values helps quickly identify operational designed and optimized to
inefficiencies and provides the ability for support AI workloads and
advanced troubleshooting.
will consume zero water
Our new datacenters are designed and optimized to
support AI workloads and will consume zero water
for cooling.
for cooling. This initiative aims to further reduce
our global reliance on freshwater resources as AI
compute demands increase.
We are reducing our reliance on freshwater sources for our existing datacenters.
Replenishment One of the challenges with water replenishment

is the lack of protocols and standards available
In November 2023, we published a white paper that
shares some of our learnings as we developed our Water Table 2–Replenishing more
to support companies in evaluating projects and global corporate water replenishment program. water than we consume
measuring impact. Given this, we defined four core We also shared for the first time an overview of all Since year one, we have contracted 49
In FY23, we grew our water replenishment program principles to guide our strategy: replenishment projects we have funded to date. replenishment programs in water-stressed
significantly, adding rigor to our approach while basins, which are expected to deliver more
Prioritize investment in areas with high Our hope is that, in combination with existing
nearly doubling the size of our portfolio. As of than 61 million m3 of replenishment volume
water stress and high operational water guidance documents and resources, this will help
July 2023, we invested more than $16 million in over their lifetime.
consumption. By 2030, we expect to replenish others navigate the complexities of replenishment
49 replenishment projects around the world, for
more water than we consume across our entire and even inspire action and investment by other Total contracted volume
more than 61 million m3 of potential volumetric
direct operations globally and replenish all of parties in innovative new replenishment approaches. water replenishment
water benefits (the equivalent volume of 24,000
that water in approximately 40 priority high water
Olympic size swimming pools) over the lifetime of
the projects.
stress locations where we operate. We’re increasingly looking 28M
Invest in locally relevant projects for opportunities to support
Once we sign a contract for a replenishment project,
that offer co-benefits. We prioritize water new project implementers that
it takes 1 to 3 years for that project to become
25,449,121
replenishment projects that fit a basin’s unique 21M
operational. As such, we are contracting for projects
needs while also offering social and bring creative and innovative
today that will come online within a few years. 15,686,416
environmental co-benefits. approaches—such as through
14M 12,937,207
Keep community needs and impact new technologies or funding
at the forefront. We are intentionally integrating models—that will help the
environmental justice into our replenishment
market scale quickly to 7M
investments, considering how we can support
Water m3
marginalized communities while avoiding meet demand. 2,840,030
potential unintended harmful consequences. 0M
Focus on innovation with an aim to build FY20 FY21 FY22 FY23
61M m3
Our replenishment projects are contracted to
project supply and scale. We’re increasingly
looking for opportunities to support new project
implementers that bring creative and innovative
Base
year
Current
year
approaches—such as through new technologies

deliver more than 61 million m3 of volumetric or funding models—that will help the market
benefit over their lifetime. scale quickly to meet demand. Find out more in our Data Fact Sheet
Replenishment continued
AI Accelerating progress with AI Partnerships Partnerships Partnerships
In support of our water replenishment target, Restoring the Lake Improving water resilience in Addressing water loss and
we’ve partnered with FIDO Tech to reduce water
Xochimilco ecosystem the lower Colorado River improving resilience
loss from leaks through three projects in the aging
water distribution networks of London (England), Conservation International is working to Bonneville Environmental Foundation (BEF), With support from Microsoft, Bonneville
Querétaro (Mexico), and Phoenix, Arizona (United restore the Lake Xochimilco ecosystem— in partnership with Microsoft and others, is Environmental Foundation is working to
States). The projects use FIDO’s AI-enabled acoustic home of the endangered axolotl and the last engaged in the Lower Colorado River Resilience improve water resiliency in the Dallas-Fort
leak analysis to identify and track leaks over a natural remnant of the Valley of Mexico lagoon project to conserve water in Lake Mead and Worth area, Texas. A partnership between
distance of 350 km within the networks. Once leaks system—which has been severely modified by support water resilience in Arizona and the BEF’s Business for Water Stewardship, Sensor
are identified, the local water utilities will conduct urbanization, resulting in water pollution and lower Colorado River Basin. The project brings Industries, Pacific Institute, and local housing
repairs. Over a 10-year period, FIDO plans to track endangering biodiversity. Using a site-specific together water leasing, habitat restoration, authorities will install 600 leak detection sensors
volumetric benefits alongside other complementary model designed to protect this ecosystem environmental flows, and private and public for toilets in multi-family, low-income housing
benefits, including greenhouse gas reductions. through various conservation measures, such as sector investment to increase water resilience in developments. The sensors have a 10-year
restoration of the traditional chinampa wetland the lower Colorado River. lifetime and will allow for real-time monitoring
Another project will support the use of AI and site-
agricultural technique, planting of native of leaks, enabling prompt response from
specific data to improve irrigation management
species, and employing biofilters to improve maintenance to minimize water loss.
on 385 hectares per year of private irrigated
water quality, the project is expanding its reach
family farms in the Maipo Basin near Santiago,
through support from Microsoft to incorporate
Chile. In partnership with Kilimo, the system
more local farmers and a larger wetland
can provide tailored irrigation schedules for a
restoration area.
variety of high-value crops, helping farmers to
decrease groundwater pumping and diversion of
surface water.
Access Increasing access to water

and sanitation
Enhancing and sustaining the
availability of safe drinking water
We met our target to provide
more than 1.5 million people
As of 2023, having invested more than $3 million WaterAid is partnering with Microsoft to ensure with access to water and
Today, one in four people lack access to safely to support communities in Brazil, India, Indonesia, the sustainable availability of groundwater while
Mexico, and Chile, we have reached our target to adapting to climate change in the Deccan region of
sanitation services.
managed drinking water and more than half of
the global population does not have access to safe provide more than 1.5 million people with access to India. This project will harvest rainwater and enhance
sanitation. Our water positive goal is about more water or sanitation services. A majority of our work the availability of groundwater in water-starved
than only reducing and replenishing, it is also about to date has been implemented by Water.org, an regions through artificial groundwater recharge.
helping to provide people around the world with organization that helps people without safe access Envisioned as a three-year program that follows up
access to safe water and sanitation services. to water and sanitation get access to affordable on previous work in Karnataka that demonstrated
financing, which enables them to install household significant volumetric benefits, WaterAid will scale
taps and toilets and to collect, store, and purify this project into the Hyderabad district of Telangana
rainwater and water from municipal sources. state and expand its work in Raichur and Gulbarga
districts of North Karnataka. In Hyderabad, this
While we are proud of the progress we have made,
project will cover 25 residential welfare associations
we recognize it is not enough, and we remain
and create profound impact at the district level.
committed to continuing to support marginalized
communities that have limited access to water and Helping to expand access to safe drinking water
sanitation services. In partnership with WaterEquity in Indonesia’s rainforest communities.
to create a water and climate resilience investment
strategy, we are turning our attention to vulnerable In partnership with Water.org we are also working to
populations who are susceptible to increased expand access to safe drinking water in Indonesia’s
climate shocks. This is WaterEquity’s first strategy rainforest communities. Many lack running water
to focus exclusively on investing in municipal-level at home and spend time each day carrying heavy
climate-resilient water and sanitation infrastructure buckets of water from the nearest water source.
$3M
for low-income populations, supporting people in Sapdiah is among those who live in Indonesia’s
countries in South and Southeast Asia, sub-Saharan rainforests and was able to overcome this challenge
Africa, and Latin America. This work represents our by securing a microloan for a water tank and filter
third water-related investment advanced through through a local financial partner of Water.org.
We have invested more than $3 million
to improve water access in Brazil, India, Microsoft’s $1 billion Climate Innovation Fund.
Indonesia, Mexico, and Chile.
Access continued
Water Table 3–Delivering on our water positive target by enabling access to water and sanitation services, and through water replenishment projects
49 Population provided
with water access
Total number of Water replenishment

water replenishment projects
United Kingdom projects to date
A Mexico
Water.org in Mexico
Spain
focused on the B Chile United States China
Metropolitan Area of
Through our
Mexico City, disbursing
collaboration with Agua Mexico A
microloans that will D
Segura, close to 4,000
benefit more than India
people benefited from
1,500 people.
improved access to
drinking water for the
1,500 community of Cerrillo

in the municipality of
Curacaví, and more than C
D India
Through our
E
E Indonesia
people in Mexico collaboration Water.org reached
1,000 students gained C Brazil
provided with with Water.org, more over 500,000
access to safe drinking
water access In Brazil, Water.org than 900,000 people people throughout
water at schools in South Africa
disbursed more than have been reached in the Indonesia, primarily in
the communities of
15,000 WaterCredit states of Andhra Pradesh, the regions of East,
Quilicura and Colina.
loans that will Karnataka, Maharashtra, West and Central Java.
benefit more than B Tamil Nadu, Telangana,
4,954 60,000 people. Chile and others.

517,713
people in Chile
provided with
water access
62,986 923,760 1,510,913 people in Indonesia
provided with
people in Brazil people in India Total number of water access
provided with provided with people reached
water access water access to date
Innovation Improving water data and insights

In recognition of the need for future water
We are also co-funding the development of a
guidance document for water access and sanitation
Scaling water solutions
Our focus on innovation doesn’t stop with
projects, modeled after the VWBA guidance for
projections to be based on the latest available addressing Microsoft’s water goals related to our
replenishment projects, to create more guidelines
With the publication in 2023 of our water data, Microsoft became one of the inaugural World direct operations. A significant focus of this pillar is
around water access and sanitation project
replenishment white paper, we are sharing our Resources Institute (WRI) Aqueduct Pro Sponsors, to help our customers and the world more broadly
typologies, quantifying benefits.
learnings and best practices to help others providing support for the build out of the most in responding to the global water crisis. Our Climate
recent WRI Aqueduct tool. Aqueduct 4.0, which Microsoft is also sponsoring HydroSHEDS v2, Innovation Fund has invested $45 million in scaling
embarking on replenishment. This paper shares
is free to the public and available online, helps the next generation of the hydrographic data innovative water solutions, including $25 million in
our learnings as we developed our global
companies, organizations, and investors understand framework HydroSHEDS. The global standard for WaterEquity’s water and climate resilience strategy in
corporate water replenishment program. This is
risks, with new projections on water stress, demand, mapping basins, rivers, and lakes, HydroSHEDS has FY23. This strategy focuses exclusively on investing
not meant to be a single “source of truth” to guide
and supply. The tool uses the latest CMIP6 climate enabled advances in global and regional freshwater in municipal-level climate-resilient water and
corporate replenishment decisions, but we hope
forcings from the IPCC Climate Change 2022: and biodiversity work and is the basis for many sanitation infrastructure.
that in combination with other existing guidance
Impacts, Adaptation and Vulnerability report. management and decision-making applications,
documents and resources it will help leaders in Furthermore, we remain committed to driving data
including water risk assessment tools such as WRI’s
this space better understand the complexities Along with other organizations engaged in digitalization for water. In FY23, we introduced
Aqueduct and WWF’s Risk Filter Suite.
involved. We still have a lot to learn, and we hope water replenishment, we are helping to fund critical new water data capabilities in Microsoft
this encourages others to share their own insights the development of Volumetric Water Benefit HydroSHEDS v2 refines global river network and Cloud for Sustainability. The Microsoft Cloud
as well. We look forward to publishing updates as Accounting (VWBA) 2.0, which will establish catchment delineations using TanDEM-X elevation for Sustainability water data model provides the
we continue to evolve our strategy and grow our methodologies for quantifying the volumetric data. The new version includes latitudes above 60°N framework required for storing and linking water
project portfolio. water benefits of water stewardship activities and and below 60°S for full global coverage. quality and quantity measurement data and water
help achieve the scale needed to address global sustainability reference data.
water challenges.
HydroSHEDS
VWBA 2.0 will refine the existing guidance
hydrographic
related to project selection and volumetric water data framework is
benefit quantification; provide principles to enabling advances
guide companies in making credible volumetric in freshwater
$45M
water benefit quantification claims; provide and biodiversity
management.
guidance for collecting, tracking, and reporting
information to substantiate claims; and refine some
Through our Climate Innovation Fund, we have quantification methodologies.
invested $45 million in scaling water solutions.
Policy Improving water reuse Increasing water security

and recycling Microsoft is supporting The Nature Conservancy working with the Jicarilla
At Microsoft, we are working to improve Apache Nation, and the New Mexico Interstate Stream Commission (NMISC),
Advocating effective and innovative We continue water stewardship and to be good partners in implementing a first-of-its-kind water sharing agreement that allows the
water policy to look for with local municipal water resource managers NMISC to lease up to 20,000 acre-feet of water per year from the Nation to
in the communities where we operate. benefit threatened, endangered, and sensitive fish species and increase water
As water challenges continue to intensify, we need opportunities This is why Microsoft is working to increase the security for New Mexico. This agreement demonstrates how Tribal Nations
to go beyond reduction, replenishment, and access,
and consider opportunities to improve management
to advocate for procurement of recycled or reclaimed non- and state governments can work together on a sovereign-to-sovereign basis,
meaningful potable water in our datacenters and other with support from conservation organizations, to find collaborative solutions
of this essential resource. In the United States and
facilities. We recently signed on as a founding that benefit multiple interests and their surrounding community.
in many other countries around the world, less than policy. Some of
1% of water used is recycled today; in contrast, member of the WateReuse Association’s
some countries, like Israel, recycle roughly 90% of
our advocacy Coalition for Water Recycling, a group of
their wastewater. Water reuse and recycling has projects include companies looking to support the adoption Supporting more sustainable water governance
the potential to lessen demand for water in water- and expansion of water reuse across the United
the following: States. The Coalition will work to advance policy
Water Europe is a multistakeholder organization representing the
stressed regions, while also helping minimize the whole water value-chain focused on achieving a Water-Smart Society5.
discharge of contaminated water into sensitive areas. solutions and build partnerships between
As members, we continue to support research, analysis, and advocacy
recycled water utilities, regulatory agencies,
on water in the European Commission.
and industry. Companies that join this coalition
will have a unique role to play in helping to
advocate for more reuse and recycling across
the United States.
Learnings Innovation will

continue to play a
Water reuse
remains a big
Partnering to create a
water positive future
Improving
measurement
Investing to
accelerate progress
and powerful role
As a global community, we need
opportunity globally
The global average for water
We believe that the collective
power of multiple organizations
Understanding the value and
impact of water-related projects
Project supply is particularly
low in high water stress basins
what’s next to scale investment in water to

help all of us meet our corporate
reuse is roughly 10%.6 In the
United States, less than 1% of
funding innovation, driving
action, and advocating for
requires better monitoring.
Developing enhanced guidelines
where many companies have
operations. In some regions,
goals, to help the world protect water is reused, and there are public policy will be critical to and establishing standards for few to no pre-designed projects
freshwater resources, and to very few utilities globally that addressing the global water crisis. measuring project outcomes ready for investment and
help ensure that everyone, offer reclaimed water to industrial Collective action is a thread that will help everyone account for implementation are available.
including those most vulnerable, users.7 This means that most of we see across each of Microsoft’s impacts in a consistent and We are tackling this by building
have access to water and the water we all use every day is five pillars for water positive. reliable manner. supply and working to scale
sanitation services. potable water that is disposed of projects, like FIDO, so they are
Given the collective approach In support of this, we’re helping
and polluted after it is used. available to others.
As we identify innovative required to solve shared water fund the next iteration of the
approaches that work, we look At Microsoft, we tackle reuse challenges, we plan to continue VWBA 2.0 and the development Building a more ready supply
forward to scaling these within within our datacenters and building on partnerships like of standardized accounting will require:
Microsoft and sharing them campuses: maximizing reuse the Water Resilience Coalition methods for the co-benefits of
1 More project implementers,
outside of our four walls to of each drop of water that we (WRC) that bring companies water access, sanitation, and
brokers, and corporate
increase supply for replenishment withdraw, procuring reclaimed, together to pool funding and hygiene (WASH) projects (WASH
investors.
projects and further reduce non-potable water from utilities invest in solutions in locations Benefit Accounting). We are
pressure on the shared water and from alternative sources, with extreme water stress. We will also supporting the CEO Water 2 Broader awareness among
resources we depend on. including rainwater, air-to-water also continue to co-invest in Mandate in building out the professionals at utilities,
generation, and other innovative water replenishment projects Water Action Hub 5.0, a platform governments, consulting
We plan to continue to identify firms, and NGOs.
approaches where available. around the world. A complete that connects stakeholders to a
and invest in technology
list of replenishment projects we range of water stewardship tools. 3 Innovative financing.
adoption opportunities for In 2023 we joined the Coalition
have funded as of July 2023 can Microsoft is also participating in
emerging water technologies for Water Recycling to continue
be found in our replenishment the Water Resilience Coalition’s
through our Climate advocating to help increase water
white paper. Net Positive Water Impact (NPWI)
Innovation Fund and through reuse across the United States.
working group, which plans to
our replenishment and
release its Operational Guidance
access investments.
paper in early 2024.
Image captured by John Tien, Director of Commodity Sourcing, United States
Getting to
zero waste 89.4%
Reuse and recycle rates of
Waste We recognize the urgent need to reduce waste
servers and components across
Reducing waste at our campuses 37 and carbon emissions associated with the life cycle
all cloud hardware reached
and datacenters of materials by prioritizing reduction and reuse as
89.4% in FY23.
Advancing circular cloud hardware 40 much as possible. As a company that manufactures
and packaging devices, builds campuses and datacenters, and
Improving device and packaging circularity 42 uses manufactured goods in our operations, we
have committed to responsibly design and source
Learnings and what’s next 45
materials, and are taking an increasingly circular
approach to reach our target of zero waste by 2030.
Our approach
This strategy, grounded in the prioritization of
Every year, people consume 100 billion metric tons reduction and reuse, enables us to extend the life of
of materials, and only 7.2% of those materials are the materials we use, and reduce waste and carbon
cycled back into the economy after use, according to emissions as a result. This effort begins upstream by
the 2023 Circularity Gap Report. Retooling existing reducing the quantity of materials wherever possible,
linear take-make-waste systems and infrastructure keeps products in use longer through reuse and
is required to meet the critical need to accelerate repair, and recovers materials downstream to our
progress in how we design and use products to recycling and composting programs.
effectively reduce material consumption.

zero waste Driving to zero waste building and operations
We will achieve 90% diversion of operational waste at owned
18,537 metric tons of operational waste diverted
In FY23, we diverted 18,537 metric tons of solid waste from landfills and incinerators
datacenters and campuses, and 75% diversion for all construction across our owned datacenters and campuses.
As we work to acheive zero waste, we are taking and demolition projects, by 2030.
an increasingly circular approach to materials
management to reduce waste and carbon emissions. Increasing reuse and recycling of servers 89.4% reuse and recycling
and components Our reuse and recycle rates of servers and components across all cloud hardware
By 2025, 90% of servers and components for all cloud hardware will reached 89.4% in FY23.
be reused and recycled with support from our Circular Centers.
Eliminating single-use plastic Reduction in single-use plastics to 2.7%

By 2025, we plan to eliminate single-use plastics in all Microsoft On our way to eliminate single-use plastics in Microsoft product packaging by 2025,
primary product packaging. we reduced plastics across Microsoft’s product packaging portfolio for another year,
achieving 2.7% in FY23.
Making fully recyclable products and packaging Devices

We plan to design Surface devices, Xbox products and accessories, Recycled materials Repairability Device recyclability
and all Microsoft product packaging to be 100% recyclable in OECD The post-consumer recycled content We expanded our To be reported in
countries by 2030. used in our devices packaging portfolio of repairable future years.
currently stands at 53.8%. Surface products in 2023.
Innovating cloud packaging Increasing circularity of cloud packaging
2.7%
By 2025, all cloud packaging is planned to have a minimum of 50%
8
In FY23, we increased circularity in our rack packaging, which makes up most of our
recycled content; eliminate single-use plastics; will be 100% reusable, packaging waste by mass. We’re pioneering an innovative reusable rack packaging
recyclable or compostable; and packaging weight will be reduced by system that drives progress across all four packaging targets. As we scale our reuse
a minimum of 10% from a December 2020 baseline. system, we are partnering with our logistics service providers to implement a global
We reduced single-use plastics in our
recycling program across our worldwide locations.
Microsoft product packaging to 2.7% in FY23.
Reducing waste Reducing operational

waste in our workplaces Waste Table 1–Diverting operational waste from landfills and incinerators
at our campuses As we continue to pursue Zero Waste certification In FY23 we diverted more than 18,500 metric tons of waste from being landfilled or incinerated across
on campuses worldwide, we have focused on the our owned datacenters and campuses.
and datacenters reduction of single-use materials and operational

waste through the widespread deployment of
Diverted Non-diverted
reusable serviceware at several campuses, including A Reused B Recycled C Composted D Incinerated E Landfilled
Hyderabad and Bengaluru, India; Silicon Valley,
Getting to zero waste at our campuses and California; Dublin, Ireland; and Thames Valley
Diversion rate
datacenters requires ambitious efforts to design for Park, England. We have also deployed beverage
FY20
circularity; reducing as much waste as we can, as well
as reusing and repairing products to extend their
dispensers to replace single-use cartons, cans, and
bottles. Additionally, we’re engaging employees with
Base
year
A B C D E
82.2%
useful life. We’re thinking through everything—from novel, effective messaging around participation to
durable serviceware to air filters—with circularity further reduce single-use materials.
in mind and prioritizing the prevention of waste
from the start as we approach the construction,
Our Redmond campus has been Zero Waste
certified for seven consecutive years. In FY23, we
FY21 A B C D E
80.7%
furnishing, renovation, and demolition of the
initiated a reuse pilot on our Redmond campus
buildings in our datacenter and campus portfolio.
Campuses
where employee devices and peripherals used on
campus turned in for recycling were refurbished
FY22 A B C D E
84.9%
and reused, reducing operational waste, extending
Reducing construction the internal life cycle of devices and peripherals
FY23
and demolition waste
In FY23, we’ve achieved over 90% construction and
previously destined for recycle. The pilot was
a success, with over 18,000 items redeployed
Current
year
A B C D E
82.0%
demolition waste diversion rate on the Redmond internally, diverting 33,000 pounds of e-waste.
campus modernization project. This accounts for We’re evaluating the results for pilot expansion 0% 20% 40% 60% 80% 90% 100%
over 11,000 tons of waste diverted from the landfill in future years.
Target
thanks to thorough and detailed planning that
started early in concept design and continued
throughout construction.

Reducing waste at our campuses and datacenters continued
In Silicon Valley, Dublin, Reading, and Herzliya LinkedIn waste reduction Datacenters
(Israel), campuses performed waste characterizations At our Dublin campus, LinkedIn has piloted a bin- Our goal by the year 2030 is for 75% construction and demolition waste diversion
to determine how materials are sorted and find free kitchens program with a dedicated fermentation for all projects, and 90% diversion for core and shell projects over 75,000 square
intervention opportunities to prevent waste room, where trim waste and fruit and vegetable feet. On the operational side, our goal is to divert 90% of operational waste by
contamination. In China, our campuses are actively pulps are dehydrated and repurposed. The removal Sustainability 2030 for our owned datacenters.
working with third-party waste auditors to codify of the bins has resulted in an average reduction of
terms and definitions around waste that are easily
Champion:
food waste by 55% per serving since its introduction. Reducing construction and demolition waste
translated and understood by colleagues across Emilia Zamora
Additionally, LinkedIn creates in-house made Microsoft and our suppliers continue to look for innovative solutions within the
the world. Finally, across Microsoft campuses we
products and is cultivating strategic partnerships construction processes to reduce waste across the building materials’ entire life
are working to better define reduction and reuse
with vendor partners to facilitate plastic packaging As a member of the cycle and supply chain. In FY23, we piloted construction circularity principles
calculations in preparation for more campuses to
reduction programs across all facets of vendor Circular Cloud Supply onsite and gathered key learnings to apply to future projects. We continue
pursue Zero Waste certification.
supply chains. Chain team, I have to enhance our real-time database allowing for more robust data analysis.
the opportunity to Moving forward, construction circularity, upstream design considerations, take-
At our Dublin campus and globally, 100% of our
AI Accelerating progress with AI be at the forefront back programs, and repurposing of excess materials are all sustainability practices
micro-kitchens are free of plastic bottles, and
of circular supply we continue to pursue at datacenter construction projects.
As part of a three-year pilot program (FY22–FY25), each site with onsite full-service kitchens uses
chain design and
we are rolling out an AI-powered food waste reusable plateware.
deployment.
prevention technology across several major locations Use of house-made oat milk and almond milk By supporting
including Bengaluru and Hyderabad, India; Shanghai, collectively diverted an average of 15.5 pounds of decommissioned
Beijing, and Suzhou, China; Charlotte, North plastic and 75 pounds of cardboard from material channel
Carolina; Silicon Valley, California; Dublin, Ireland; entering the landfill each month. development and
and Reading, England. Using scales and scanning operations, our team
LinkedIn is partnering with suppliers to
devices, the system tracks, learns, and classifies both has the responsibility
implement reusable cooking oil containers
back-of-house prep waste and front-of-house plate to find the optimal
(eliminating 1,854 pounds of packaging from
waste. The dining staff uses the data collected each path for every part.
landfills and oceans), bulk coffee (eliminating 420
month to calculate and monitor diversion rates to I feel lucky to be on
pounds of packaging), and bulk milk (eliminating
inform future purchases across campuses, bringing a team that works
over 50 pounds of single-use milk packaging).
Microsoft one step closer to zero waste. every day to support
our datacenters
and minimize
electronic waste.
Reducing waste at our campuses and datacenters continued
Reducing waste in our In 2023, we successfully launched a pilot to test a

We continue to
datacenter operations durable air filter product in a real-world datacenter work to reduce
environment. Over the next few years, we will waste across the
Wooden pallets are a crucial component of
evaluate ongoing performance and maintenance life cycle and
Microsoft’s datacenter supply chain. We have been
requirements for this innovative product. supply chain of
actively working across our datacenters worldwide our datacenters.
to establish programs that promote wooden Additionally, our Boydton, Virginia and Cheyenne,
pallet reuse and recycling. By conducting research Wyoming datacenters completed a pilot with local
to understand local market opportunities and technical schools to give a second life to over 200
establishing relationships with local haulers, we have used fiber optic cables. By partnering with local
been able to significantly increase wooden pallet schools, we’re enabling cable reuse while also
diversion. In FY23, Microsoft increased the quantity providing an educational opportunity for community
of wooden pallets diverted from landfills and members. We are looking into scaling this initiative
incinerators by nearly 79% compared to FY22. globally to build on the success of the pilot and Community environmental engagement By partnering with local schools,
serve more communities where we operate. At our Amsterdam datacenters, we hosted a
Air filtration is critical for datacenter operations we’re enabling cable reuse while
because it helps maintain a clean environment for month-long series of interactive workshops to
bring a hands-on approach to learning about also providing an educational
sensitive electronic equipment, reducing the risk of
waste. Workshop topics include the principles of opportunity for community
75%
contamination and potential equipment failure.
zero waste; the history of plastics; an introduction members. We are looking into
We have been assessing whether durable air filters— to the United Nations Sustainable Development
with an anticipated lifespan of up to 15 years—can Goals; waste and carbon emissions; procurement scaling this initiative globally to
replace the disposable air filters that we currently Our goal by the year 2030 is for 75% practices and waste impacts; and an overview of build on the success of the pilot
use at our datacenters without compromising key construction and demolition waste diversion Microsoft’s zero waste initiatives. All workshops
performance metrics. for all projects.
and serve more communities
included an opportunity for self-reflection and tips
for integrating sustainable practices into daily life. where we operate.
Additionally, in our Singapore and Busan, South
Korea datacenters, we began using small-scale
onsite biodigesters to convert used coffee grounds
into compost, which is then used in the site
landscaping. The program provides an opportunity
for datacenter personnel to learn about composting
and Microsoft’s zero waste commitments.
Advancing circular Improving reuse and recycling in

cloud hardware Waste Table 2–Improving reuse and recycling of servers and components for all
cloud hardware
cloud hardware Our reuse and recycling rates for servers and
components across all cloud hardware reached
and packaging 89% in FY23. This progress was in large part due
to working directly with recyclers to understand
In FY23 Microsoft increased reuse and recycling of servers and components to 89.4%.
recycling efficiency on Microsoft-specific equipment.

A Reused B Recycled
Through this partnership, we were able to determine
A critical part of achieving our zero waste goal is that Microsoft servers were on average 86%
managing cloud hardware and packaging across recyclable, as compared to the industry average of FY20
our datacenters. This year, we continued to optimize
circularity within our datacenter operations by
67% that was previously assumed. Base
year
A B
86.7%
Four Circular Centers were launched in FY22 in
scaling our Circular Centers, and implemented
Amsterdam, Dublin, Boydton, and Singapore, with an
a novel technological innovation that embeds
sustainability guidance within our material assets.
additional two in Quincy, Washington and Chicago,
Illinois in 2023. As the program continues to expand,
FY21 A B
76.0%
This solution has further accelerated our efforts to
we plan to launch two new Circular Centers in FY25
reuse and recycle cloud hardware wherever possible.
in England and Australia, and expand our Circular
Centers in Amsterdam and Dublin.
FY22 A B
82.0%
Additionally, we are designing a growing portion of FY23
our own hardware needs and we make sustainability
considerations a key part of the entire design
Current
year
A B
89.4%
process—including energy efficiency, repairability, 0% 20% 40% 60% 80% 90% 100%
upgradability, and durability.
Target
We continue to implement ecodesign principles and
requirements outlining the sustainability guidelines
that hardware engineers and suppliers should follow
when designing hardware for the Microsoft Cloud,
Our Circular Center program will support our including Design for Serviceability specifications
target to reuse or recycle 90% of datacenter and requirements for recycled content as well as
decommissioned cloud computing hardware material recyclability. Find out more in our Data Fact Sheet
assets by 2025.
Advancing circular cloud hardware and packaging continued
To support our efforts to reuse and recycle cloud Understanding our packaging landscape Reducing, reusing, and recycling Transforming the long tail
hardware, we developed the patent-pending Supporting Microsoft datacenters are over rack packaging of supplier packaging.
Intelligent Disposition and Routing System (IDARS), 150 different original equipment manufacturers We are pioneering two transformative programs In many cases, parts other than racks arriving at
which establishes and executes a zero waste plan (OEMs), as well as a variety of products, services, to address rack packaging waste: Sustainable our datacenters have packaging that is supplier
for our cloud hardware assets. IDARS is an end- and suppliers who support our cloud business. Rack Packaging transformation and Rack designed and applied, preventing any unilateral
to-end system that identifies the most sustainable Multiple types of packaging are associated with Packaging Recycling. capabilities for Microsoft to transform the packaging
disposition path for every part at any point in its life those products and services, which fall into two of the products that we receive. Therefore,
cycle across the supply chain. The innovative Sustainable Rack Packaging system
primary categories: IT hardware assets that are collaboration within industry is necessary to drive
is designed to be made predominantly from
Paired with Microsoft Dynamics 365 Supply Chain integrated into a rack and packaged together; and sustainable packaging transformation. In FY23 and
recycled materials, completely devoid of single-use
Management and Microsoft Power Platform, IDARS IT hardware assets that arrive at our datacenters continuing into FY24 and beyond, Microsoft will
plastics, and fully repairable to prolong its lifespan.
utilizes the bill of materials of assets, inventory, packaged individually, or in groups, that are not yet closely collaborate with our suppliers to transform
The deployment of this system is estimated to
and demand to optimize the sustainable path, and integrated into a rack. packaging reaching our datacenters.
enable us to reduce over 100,000 metric tons of
provides Circular Center technicians with precise In FY23, Microsoft studied its heterogeneous waste from the landfill. This kind of groundbreaking
instructions on how to steward the asset onto its supply chain to identify the largest producers of packaging intervention is crucial for the cloud supply
next phase. This technology, along with our close packaging waste. We found that rack packaging chain to meet Microsoft’s zero waste targets.
collaboration with both upstream and downstream contributes most of our waste by mass, while other
partners, offers a model for the technology industry. But we’re not just looking to the future. We’re
parts arriving at our datacenters comprised the
delivering results now through our Rack Packaging
remaining mass. Given that Microsoft controls the
Increasing circularity of cloud packaging Recycling program. By partnering with our logistics
design and application of rack packaging, and that
In addition to reducing waste in cloud hardware, service providers, we’ve implemented a global
rack packaging is the majority waste contributor
Microsoft has the responsibility to address the recycling and responsible disposal program across
by mass, one of our main transformation focuses
environmental impact of packaging used to our worldwide locations. This program is designed
of FY23, and continuing into FY24, will be rack
transport cloud hardware to, from, or between to mitigate the impacts of existing packaging well
packaging transformation.
Microsoft datacenters. We also have an opportunity ahead of the full deployment of the Sustainable Rack
to utilize reusable systems to deliver sustainability Packaging solution. In this first year of deployment,
results and cost savings. To support Microsoft’s the Rack Packaging Recycling program is
public sustainability targets, our cloud supply chain forecasted to divert over 2,500 metric tons of waste
has begun the sustainable transformation of our from landfill.
cloud packaging landscape.
We are pioneering two transformative programs

to address rack packaging waste.
Improving device Reducing waste in packaging design

As part of Microsoft’s commitment to zero waste,
and packaging we are working to maximize the circularity of our

product packaging. This is accomplished first by
circularity
increasing our use of post-consumer recycled
content in the packaging materials, and second by
designing packages that are recyclable in existing
collection systems. The post-consumer recycled
Over the past year, we have continued our work content used in our devices packaging currently
to reduce the environmental impacts of Microsoft stands at 53.8%, while the calculated or theoretical
devices and packaging by increasing circularity and recyclability of our product packaging stands at 94%,
reducing carbon intensity across the entire product portfolio average. Our designers and engineers work
life cycle. relentlessly to increase use of recycled materials and
recyclability of packaging to support the circulation
of packaging materials, while delivering solutions
that protect the product.
A key pillar of our zero waste packaging strategy
is the use of renewable and recyclable materials,
and the elimination of single-use plastics used
in packaging by the end of calendar year 2025. Packaging continues to evolve to improve recyclability. Image shows packaging evolution from left to right
from 2005 to 2024.
We made strong headway against this goal in FY23.
The portfolio average of single-use plastic by weight FY23 was a year focused on the development of We take a data-driven, science-based approach
was reduced from 3.3% to 2.7%. We introduced new packaging technologies that are currently to this work and the tracking of our progress.
several single-use plastic-free highly recyclable deployed in new and existing products. The packaging recyclability and single-use
retail packages. These include the line of Microsoft These technologies include: plastics percentages were included in our
53.8%
The post-consumer recycled content used
Adaptive Accessories and Surface Thunderbolt™ 4
Dock. The transition to sustainable wraps and bags
continued with the expansion of bamboo bags
across our line of Surface commercial devices.
1 Fiber-based cushioning solutions to replace
plastic foam.
third-party assurance.
2 Coatings to replace film laminations.

in our devices packaging currently stands
3 Paper-based security labels to replace
at 53.8%.
plastic shrink wrap.
Improving device and packaging circularity continued
Waste Table 3–Designing our product packaging for circularity Waste Table 4–Reducing single-use plastics
In FY23, we achieved a rate of 93.9% recyclability across all Microsoft product packaging. In FY23 we decreased single-use plastics to 2.7% across all Microsoft product packaging.
100% 6%
Target 5.7%
4.7%
95% 4%
Packaging recyclability
Target 100%
Single-use plastics
recyclable
94.4% packaging
93.9%
by 2030 3.3%
92.7%
2.7%
90% 2%
90.2%
Target 0%
single-use
plastics
by 2025
85% 0% Target
FY20 FY21 FY22 FY23 FY30 FY20 FY21 FY22 FY23
Base year Current year Base year Current year
Find out more in our Data Fact Sheet Find out more in our Data Fact Sheet
Improving device and packaging circularity continued
Designing for repairability Designing with more recycled content In addition to expanding takeback programs, we To improve discoverability and access to these
Designing our products for repairability reduces We continue to pursue innovative design with the are also expanding the scope of the products under programs, Windows 11 now allows OEMs to
waste by enabling servicing of the component or inclusion of recycled content such as aluminum, our recycling program. Business customers can include recycle and trade-in links in the Settings
sub-assembly needing repair. To reduce the overall rare earth magnets, plastics, and gold and tin now return Surface Hub 2S computer cartridges app. Microsoft and other device manufacturers
waste impact of Surface products, we collaborate solder paste in key components of our products. for recycling in many countries globally, allowing have included these links on their PCs.
across the disciplines of engineering, design, and Our Surface Thunderbolt™ 4 Dock and power supply customers to upgrade their existing Surface Hub 2S Approximately 150,000 customers interact with
business to ensure that our strategies to reduce unit enclosures (excluding the power cable) use 20% to the next generation computing platform.10 these links each month, based on Windows optional
waste are circular, timely, and globally relevant. ocean-bound plastic and feature lighter materials diagnostic data.
than our previous docks.
In 2023, we filled out our new Surface device
portfolio of repairable products with the launches of Expanding takeback programs
Surface Go 4, Surface Laptop Studio 2, and Surface
In September 2023, we expanded our device
Laptop Go 3. With the addition of these products, all
Microsoft Store Trade-In Program to Canada for
our latest model devices include spare parts such as
consumers. In addition, we also launched a new
displays, motherboards, keyboards, and batteries.
trade-in program for our commercial customers
We also increased access to services for commercial in the United States. Consumers and companies
customers by growing our authorized service can trade in their end-of-life devices, extending
provider network by more than 50%, and increasing the life of their devices through refurbishment
availability of spare parts for independent repair where feasible, and where not feasible, providing
services and end users via the Microsoft Store online. environmentally sound management practices
In addition to an expanded repair network, warranty following Microsoft’s end-of-life requirements
support for our commercial customers enables (H09117) publicly available on our website.
in-region Same Unit Repair in select countries.
This option provides our customers with choices,
and it reduces waste.9
By making our devices more repairable, it is possible
to extend their life.
Watch the video here: Surface Go 4

20%
Our Surface Thunderbolt™ 4 Dock and
power supply unit enclosures use 20%
ocean-bound plastic.
We are expanding the scope of the products under our recycling program.
Learnings Build circularity

into everything
Prevention is first
Prevention is critical to reduce waste, and initiatives
Prioritize circular materials
Plastics and hard-to-recycle materials, such as fabrics
and Microsoft will continue to
implement our roadmaps
to reduce and reuse materials should be prioritized
to minimize consumption and reduce carbon
or glues, can inhibit the recovery of a product and its
components. By reducing hard-to-recycle materials
what’s next across the company to further

enable key activities that are
emissions. Identification of prevention opportunities,
such as redesigning products or prioritizing local
and prioritizing more readily recoverable material
choices such as metals and cardboard, designers can
expected to result in zero waste reuse within a targeted geography, can contribute to accelerate progress toward circularity by utilizing
outcomes centering circularity. a company’s diversion rate while effectively moving materials that can cycle through more systems.
We will continue to scale our the needle forward on circularity. Technology can
programs (including Circular scale circularity,
Centers), design for circularity collaboratively
in buildings and hardware, and
Reuse and recycling go hand in hand
eliminate single-use plastics Increased data visibility is Microsoft continues to establish a foundation for
from packaging for Microsoft generating key insights on reuse across the company. While the scaling of
products and IT asset packaging the degree of circularity reuse efforts will continue to be prioritized, it is also
in our datacenters. within products and solutions. important to improve recycling. Both are critical
To further accelerate the to accelerating circularity, and we must build on
In addition to further advancing application of these insights, global progress to ensure that technology and
circularity within our operations, innovative technology, such infrastructure are available to improve both reuse
we also see opportunities for as product tracking or “digital and recycling.
broader industry to drive waste Market development is needed to passports”, can be utilized
prevention activities, develop
help close the material recovery gap to support mass scaling of a
critical circular economy markets, collaborative and transparent
scale enabling technology, and Designing products for material recirculating is
circular system that generates
innovate circular materials. essential to accelerating circularity, but to achieve
engagement and increased
the intended impacts of design efforts, mature
transparency between producers
recovery markets need to be in place to safely
and consumers.
collect and prepare materials for recirculation.
Infrastructure, technology, policy, and financing are
key drivers to extending the useful life of materials,
and further market development is needed to close
the gap on recovery.
Image captured by Darlene Campos, Director of Sustainability Strategy, United States
Protecting
our ecosystems
15,849
In FY23, 15,849 acres of land
were legally designated as
permanently protected in Belize
and the United States.
Ecosystems Our approach
Improving biodiversity at our campuses 48
In 2020, we committed to protecting more land
Increasing biodiversity at our datacenters 50 than we use by 2025. As of FY23, 15,849 acres of
Protecting more land than we use 51 land have been legally designated as permanently
Datacenter community 53 protected. We have exceeded our land protection
environmental sustainability target of 11,000 by more than 40%.
Learnings and what’s next 55 AI gives new hope and opportunity for ecosystem
and biodiversity management at a scale previously
not possible. Researchers and practitioners are using
AI to enable more reliable biodiversity monitoring
and assessments, and to transform conservation
decision making with the analysis of real-time data
and early warnings of ecological tipping points.
Our targets Our progress Ecosystems Chart 1–Meeting our target of protecting more land than we use by 2025
As of FY23, Microsoft has contracted to protect 17,439 acres of land, and 15,849 acres were designated
Taking responsibility for our 15,849 acres as permanently protected.
land footprint permanently protected
We will take responsibility for the ecosystem We have exceeded our land protection target of
impacts of our direct operations by protecting 11,000 by more than 40%.
more land than we use by 2025.
Total land protected
15,849 acres Total land contracted

to be protected
17,439
acres
Microsoft land use footprint
11,000 acres
Image captured by Martin Tatar, Business Ops & Program Manager, Czech Republic
Improving Designing more

sustainable workplaces
Biomimicry within our operations
biodiversity at Improvements made to our headquarters as part of

the Redmond campus modernization project include
Kaitlin Chuzi
our campuses
Director of Biomimicry and
protections for local ecosystems such as green roofs, Advanced Ecosystems
open space restoration, and heat island reduction.
As the Director of Biomimicry and Advanced
The Redmond campus modernization project Ecosystems within the Microsoft Datacenter
In FY23, we updated our Sustainability Standards for includes 31,000 square feet of green roofs. Systems Technology team, Kaitlin Chuzi brings
new construction to include ecosystem protection These vegetation-filled canopies provide habitats 3.8 billion years of best practices in nature to the
for both flora and fauna. Namely, for projects that for pollinators and wildlife, while reducing design table to champion an aspirational vision:
include landscaping, a local expert will be consulted rainwater runoff and creating pleasant scenery creating technology that is indistinguishable
to avoid invasive species and ensure plantings are for employees on campus. from nature. A strong advocate for data-
native to the area. And to protect local wildlife, The project is designed with a network of driven decision making, her vision is supported
projects that alter or update an existing facade will underground-only parking, restoring over 30% by practical, measurable strategies. Kaitlin’s
be designed to meet LEED Bird Collision Deterrence of the site area to open space, or nearly 1 million methodology—crucial in her efforts to support
pilot credits. square feet. In lieu of parking, we’ve instead Microsoft’s progress towards a net zero and
planted native and adaptive vegetation in restored nature-positive future—is to equip teams with a
soil in this area. Our Redmond campus modernization project framework and tools to assess the impact of their
includes protections for local ecosystems. designs on the natural environment and identify
Open space occupies over 1.3 million square feet strategies to enhance the surrounding ecosystem
of the Redmond campus modernization project’s Together, these design choices contribute to and community.
site area. In combination with the green roofs, this better human, plant, and animal health, decreased
pollution, and less required energy for cooling Within the datacenter team, Kaitlin integrates
space helps mitigate water runoff as well as the
biomimetic principles in construction and
heat island effect where large clusters of concrete buildings on campus—creating a more enjoyable
operations. She leads projects that demonstrate
1.3M
and urban structures absorb and retain more heat workplace in greater harmony with the landscape
how technology can not only coexist with but
compared to natural landscapes. it occupies.
enhance local ecosystems and communities.
For Kaitlin, the nature of innovation is recognizing
Open space occupies over 1.3 million square that we are part of nature and have the choice
feet of the Redmond campus modernization and ability to build products and technologies
project site area. that have a positive, lasting impact.
Improving biodiversity at our campuses continued
Creating homes for pollinators on Protecting salmon

Microsoft campuses Our Redmond campus modernization project is the
It’s hard to overstate the importance of bees to first Microsoft location in our portfolio to be certified
our ecosystem. It’s estimated that one third of our Salmon Safe. This peer-reviewed certification in
food supply depends on insect pollination, most of the US Pacific Northwest ensures our water reuse
which is done by bees.11 Yet, for reasons that range practices protect local watersheds and prevent harm
from habitat loss to invasive plants, pesticides, and to salmon. We’ve achieved this by constructing
climate change, bee populations globally have been two rain gardens on campus and procuring metal
declining over the last decade. By taking hundreds of landscape and building components that exclude
thousands of bees under our wing, we’re spreading zinc and copper, which can lead to toxic rainwater
awareness about the essential role pollinators play runoff for some aquatic species.
in maintaining biodiversity and working to create
solutions to sustain them.
Belgian start-up, BeeOdiversity, has developed what
The benefits of urban beehives AI Accelerating progress with AI it calls BeeOimpact, a system that is using machine
When working to restore urban ecosystems,
Protecting
learning to extrapolate bee-gathered data over large
honeybees can be a great choice for nurturing
areas. BeeOimpact uses machine learning in Azure Data
healthy flora and promoting greater biodiversity.
ecosystems
Factory to identify areas where pesticides may be in high
Honeybees have a wide flying radius and great
concentrations and assesses the impact of an activity on
pollinating abilities, all while being naturally docile
local biodiversity.
and bees
and uninterested in humans. By increasing the
pollinator population of the environment, we create Once the data is analyzed, BeeOdiversity scientists make
recommendations to clients and stakeholders to reduce
with AI
a thriving campus that supports biodiversity.
pesticide use and improve the overall environment. “In
that way we are working on factors like biodiversity and
pollution,” says cofounder Bach Kim Nguyen. “And in the
end, we save the bees.”
Increasing Wherever possible, we incorporate green building

practices that not only reduce our carbon footprint
but also to create a resilient ecosystem that
supports biodiversity, manages stormwater, and
This approach will allow Microsoft to measure the
biodiversity impact of ecological enhancement
biodiversity at
but also support local ecosystems. Features such prevents erosion. efforts over time and validate that the ecological
as green roofs and walls, native landscaping, enhancements we deploy on our datacenter
The next phase will focus on soil remediation,
and sustainable water management systems are campuses have a positive impact on the
our datacenters integrated into our design concepts. These not only
help to minimize our impact on local habitats but
preparing the ground for the introduction of diverse
plant species aimed at attracting a broader range of
local environment.
birds and insects. The goal is to create a year-round This innovative tool captures and analyzes a
also may provide new ones.
thriving environment, emphasizing the importance segment of the insect population, providing insights
A primary consideration for our datacenter Our approach to land development for datacenters of a diverse mix of trees and shrubs for wildlife. into the overall health of the ecosystem. As we learn
construction and use is biodiversity. Before any is not just about building sustainably, but about valuable lessons through this pilot, we are exploring
new development begins, we conduct thorough coexisting harmoniously with the natural world, how these strategies can be incorporated across our
AI Accelerating progress with AI
ecological assessments to understand the local flora ensuring that as we grow, we also give back. footprint. This initiative underscores our unwavering
and fauna. This helps to ensure we are aware of, and Using the tools of biomimicry, we are assessing Overcoming biodiversity bottlenecks commitment not only to the communities we
can take steps to protect, any endangered or native the impact of our datacenters and identifying operate in but also to the planet.
species in the proposed area. This process also opportunities to enhance the ecosystems around us. As we expand our footprint to meet the demand for
results in benchmarks for ecosystem performance And, as we learn from our pilots, we are exploring cloud services, we are implementing regenerative
that help identify enhancements to improve the how our designs for biodiversity can be design solutions around our datacenters that
impact of our datacenters. implemented across our footprint. enhance local biodiversity, improve stormwater
management, and contribute to climate resilience.
This effort doesn’t stop at identification; we have Modeled results suggest that ecosystem performance As part of this initiative, we are piloting AI-driven
developed design playbooks for our internal teams can be restored to as much as 75%, as evidenced by Microsoft technology to monitor and measure the
and are actively piloting solutions that support and where we are able to successfully recreate 75% of the impact of our solutions. This is a powerful example
enhance local biodiversity around our datacenters. function of the untouched ecosystem. of how technology can be nature positive as well.
Our North Holland datacenter, located near In late 2023, we deployed our first on-campus
Middenmeer, Netherlands, stands as an example to Microsoft Premonition device to pilot ecological
75%
this commitment. In collaboration with the Hollands monitoring. Premonition is a biological weather
Kroon municipality, we embarked on an ambitious station that lures, monitors, and samples
project to restore and enhance the ecosystem invertebrate species to easily track ecosystem
Modeled results suggest efforts to restore and around the datacenter. Initiated in early 2022, services, biodiversity, and disease transmission.
enhance ecosystems can recreate 75% of the the aim of Phase 1 was not only to integrate
the datacenter visually with the municipality We are incorporating green building practices
function of the untouched ecosystem.
that support local ecosystems.
Protecting more Conservation projects in the

United States
Land protection efforts
in the United States help
land than we use

conserve vital migration
Buffalo Horn Ranch, Colorado corridors for deer, elk,
Preventing development and conserving vital and other animals.
sagebrush, riparian, and forestland habitat, as
We’ve continued to make progress on our goal to well as a migration corridor and pathway for two
protect more land than we use in partnership with of Colorado’s largest migratory ungulate herds,
the National Fish and Wildlife Foundation (NFWF) a conservation easement on Buffalo Horn Ranch
and The Nature Conservancy (TNC). In addition to north of Meeker, Colorado will permanently protect
the 12,270 acres protected in Belize, we added 3,579 approximately 14,000 acres of critical winter and
acres of land protected in the United States. transition range for elk and mule deer.
We are also working on recounting the amount of Kootenai National Forest, Montana
land that Microsoft directly operates on. We recount Linking migration corridors for mule deer and elk,
periodically to ensure that our protected lands creating landscape continuity, and stitching together
continue to balance with land used. landscape-scale conservation efforts within the
Kootenai National Forest in Montana, this project
will protect 35,653 acres of habitat under permanent
conservation easement. This easement is on track to
close by mid-year 2024.
Fort Union Ranch, New Mexico East Humboldt Range, Nevada

Protecting 7,000 acres of native grasslands in Conserving habitat along a critical migratory corridor
northeast New Mexico, this conservation easement for the largest population of mule deer in Nevada,
3,579
will improve habitat and enhance movement as well as bighorn sheep, mountain goat, and
and migration for pronghorn and other wildlife several species of conservation priority including the
dependent upon these grasslands. This area of Fort greater sage-grouse, this project will permanently
Union Ranch includes both winter and summer protect more than 12,000 acres of private rangeland
In 2023, 3,579 additional acres of land were
ranges for the pronghorn. along the base of the East Humboldt mountains in
permanently protected in the United States.
northern Nevada through a conservation easement.
Protecting more land than we use continued
Partnering to Protecting the Belize Maya Forest

In 2021 Microsoft made a contribution to help the Belize Maya Forest Trust in their
Regenerative agriculture
protect vital quest to protect 236,000 acres in this biodiversity hotspot. This land was placed under One reason for the acquisition of BMF was to halt the continued expansion
declaration of trust by the Belizean government, putting 9% of Belize’s land under of large-scale mechanized agriculture in the region. As such, part of the
agreement between The Nature Conservancy and the Government of Belize
ecosystems
permanent protection. The designation of land protection is just the first important
step for the long-term conservation and management of Belize Maya Forest Project is for additional investment in regenerative agriculture in the buffer zones
(BMF). The Belize Maya Forest Trust was established as a local nonprofit, trustee, and neighboring BMF. Model and demonstration projects in partnership with
steward to create a globally recognized, locally relevant model of healthy, biodiverse the major stakeholders in the farming community, including the University
forest protected for and by all Belizeans and to be a global benchmark for effective and of Belize’s Central Farm campus and the Valley of Peace High School,
lasting conservation. will greatly assist to promote regenerative practices in the communities
surrounding BMF.
Ranger program The team and partners to date have planted approximately 1,500 native
To help legally enforce forest protection, Inga edulis plants as part of an alley cropping system in which rows of Inga
the ranger force has increased to 12 local provide added biomass and nitrogen for soil health and integrity alongside
rangers patrolling the BMF. All the patrols are the production of corn or other crops, as well as the establishment of two
now being recorded using the open-source acres of cover crops that can be used as green manure or to produce seeds
Spatial Monitoring and Reporting Tool for sale to other farmers in the area.
(SMART) used by parks globally. A significant
portion of the rangers’ time, apart from
anti-poaching patrols and maintenance, is
dedicated to fire management training and
fire suppression.
Datacenter We support two main types of projects: Ecological

restoration and urban forestry.
community Over the past five years, we have funded 112

sustainability projects in partnership with
environmental these global communities, totaling $6.7 million.
In 2023, we funded 22 new

sustainability projects in 21 locations around
the world, leading to over 20,000
The Microsoft Datacenter Community Environmental
urban trees supported and 30,000
Sustainability program responds to local needs in square meters of area improved for
the communities that host Microsoft datacenters human and ecological use. Ecological restoration Cyberjaya Lake Gardens Ecological Restoration
and where our employees live and work. We are
actively working to protect the environmental health Loudoun Wildlife Ecological Restoration The community-based Ecological Enhancement
Loudoun Wildlife Conservancy’s JK Black Oak of Cyberjaya Lake Gardens project in Malaysia,
of these communities. We support science-informed
Wildlife Sanctuary, near Microsoft datacenters in is implemented with the support of the Sepang
nature-based solution projects, designed for
northeast Virginia, faces ecological challenges due Municipal Council, SER, and Microsoft. The project
human well-being, social equity, and environmental
to invasive species and excessive deer pressure. aims to restore the 15-acre main lake, enhance
benefits. Through partnerships with local leaders
Microsoft is funding a project to restore the biodiversity and water quality, and connect the local
and organizations, we aim to identify priority
degraded habitat and biodiversity. Goals for this community to this important piece of nature.
environmental issues, build local partnerships,
and actively participate in supporting sustainable project include creating deer exclusion zones for This project is a holistic initiative aimed at improving
solutions to protect and restore our communities’ understory recovery and removing invasive plants, the biodiversity of the area and water quality of
natural environments. which will benefit 541 plant and animal species. the lake. The project’s cornerstone is the use of
The project fosters community engagement through nature-based solutions, such as wetlands for water
volunteer involvement, nature walks, and digital filtration, biofilters for stormwater treatment, and
outreach. After the funding period, the conservancy habitat creation for biodiversity improvement.
plans to continue its impact, applying lessons Moreover, it actively involves the local community
learned to enhance biodiversity, ensuring the long- including education institutions through citizen
term ecological and community benefits of the JK science initiatives.
Black Oak Wildlife Sanctuary.
Datacenter community environmental sustainability continued
Urban forestry Trees for Schools and Urban Food Forests Cool Streets Jarama Riverbed Revitalization
Tree Equity and Shade for Students in Phoenix In collaboration with Microsoft, Project Roots, In partnership with Blacktown City Council, Microsoft Fundacion FDI, with support from Microsoft and
and the Cartwright School District, Trees Matter is leading a local initiative in Sydney and Melbourne One Tree Planted, planted 2,000 trees along
The Arizona Sustainability Alliance, in partnership
is launching an initiative in West Phoenix. to combat urban heat and reduce carbon emissions Madrid’s Jarama riverbed from January to May 2023.
with the City of Phoenix, American Forests, and
Targeting Title I schools and nearby communities, by planting 400 street trees in sun-exposed areas. This initiative aims to restore a five-hectare area
Microsoft, is combating extreme heat in Phoenix by
the project combines Trees for Schools and Urban Urban areas globally are warming 29% faster near our San Sebastian de Los Reyes datacenter
advancing Tree Equity in low-income communities.
Food Forests programs. Working with Cartwright’s than rural ones, making trees crucial for cooling community, improving water quality, sequestering
With 80 trees planted so far at local schools near the
STEM and food service experts, the initiative neighborhoods and absorbing carbon dioxide. 547 tons of carbon over 50 years, and enhancing
Microsoft datacenter campus, this initiative is helping
educates students and residents about local food The Hebersham project engages the community, biodiversity. The project creates a green space
to address the city’s record-breaking high heat days
systems and tree cultivation, focusing on tree allowing residents to contribute to the tree planting for the community and benefits at-risk species.
by focusing on areas lacking trees, often affecting
identification, harvesting, and processing, and design, considering factors like appearance Fundacion FDI prioritizes inclusivity, involving
marginalized communities. The project enhances
community members are encouraged to explore and environmental impact. Over 80 Microsoft people with disabilities as volunteers and paid
school environments by providing shade to decrease
nearby food sources. Microsoft volunteers will employees and local citizens planted 45 large employees. Future plans include an environmental
temperatures, improve air quality, and foster mental
participate in tree planting events at Cartwright canopy trees, along with shrubs and understory education center in collaboration with local schools.
well-being. The schools’ staff, students, and families
schools, promoting environmental awareness. plants, in Heber Park at Hebersham. The initiative This collaborative effort tackles environmental
actively participate, ensuring communities voices are
This initiative aims to empower marginalized promotes community collaboration, enhancing issues while fostering community engagement
heard. The Arizona Sustainability Alliance employs a
communities, inspire environmental consciousness, public spaces’ livability while addressing climate and education.
five-year monitoring plan, collaborating with schools
and foster sustainable local food systems in change. Microsoft’s volunteer hours are matched,
and providing ongoing teacher education, ensuring
West Phoenix. and donations go to reforestation nonprofit One
the project’s long-term impact even beyond the
Tree Planted.
funding period.
Learnings Datacenters
that support
Supporting
biodiversity with AI
and local ecosystems
Microsoft’s vision of a sustainable
Preventing and reversing
biodiversity loss requires
what’s next future is one where technology
and nature coexist and thrive,
early detection and a deep
understanding of the factors
and that includes designing driving change. AI can help
datacenters to serve both us better monitor and track
functional and environmental biodiversity at a scale not
goals. This sets the stage for previously possible. Access to
sustainable development and real-time data and insights can
community engagement. inform better conservation
In our commitment to our decisions at critical moments.
environmental stewardship, we We will continue exploring how
have completed concept designs machine learning, geospatial,
for five additional datacenter bioacoustics, and computer
campuses across four regions. vision data can be used to
This will help to ensure we support conservation of
create a regenerative framework global ecosystems.
that is globally applicable and
locally configurable.
Image captured by Haley Alesi, Senior Sustainability Manager, United States

Progress through partnership
Ellen MacArthur Foundation The Carbon Call Student Energy Greenlining
Microsoft is a Network Partner of the Ellen Microsoft was a founding member of The Student Energy is a global youth-led Greenlining is based in Northern California
MacArthur Foundation, which is focused on Carbon Call, a ClimateWorks Foundation- organization with ~50,000 members (college and works with local organizations to bring
developing and promoting the idea of a circular hosted initiative, that mobilized action to and young professionals) in 120 countries. economic opportunity to communities of color.
economy. We are elevating opportunities for improve the interoperability of digital GHG Student Energy provides clean energy Its programs include a Greenlining the Block
Microsoft employees to learn and engage accounting infrastructure. The Carbon Call educational resources and training, convenes initiative, an academy for leaders, and policy
on topics of the circular economy through developed solution blueprints for better the largest student clean energy summit, and advocacy. LinkedIn’s grants have enabled it to
community platforms, workshops, events, discovery, understanding, and sharing of GHG has launched a program supporting student expand its online reach and visibility and raise
courses, and collaborative projects. data, key to tracking our progress to a net zero leadership of clean energy projects. LinkedIn has awareness for climate equity and justice.
carbon economy. partnered with it for six years. The LinkedIn
Learn more about the Ellen Learn more about Greenlining
MacArthur Foundation
ad grant enables it to expand its membership,
Wide adoption of these solution blueprints
promote its summits, and raise the visibility of its
will facilitate data exchange across supply
online resources.
chains and increase transparency and accurate
interpretation of corporate carbon disclosures. Learn more about Student Energy
ClimateWorks Foundation will advance these
solution blueprints with standard-setters and
regulators through their global intelligence
advocacy efforts, in collaboration with
xBRL International.
Learn more about The Carbon Call and

the ClimateWorks Foundation
Customer sustainability
How are we
advancing
technology
for net zero?
Microsoft is committed to helping to provide Microsoft Cloud for Sustainability 59
the digital technology needed to build a more
Devices 61
sustainable world and supporting our customers
on their own sustainability journeys. From creating Green software 65
tools to better measure and manage environmental Arts and culture 67
data through Microsoft Cloud for Sustainability, to Planetary Computer 68
reducing the carbon intensity of our devices and Progress through partnership 69
building the Planetary Computer, we understand
that not one person or company can solve the
climate crisis and technology can play a powerful Captured by:
role in accelerating progress. Yasna Amas M
Project Manager,
LATAM
Customer Our targets Our progress

sustainability Empowering customers and partners
We are working to help our customers, partners, and suppliers around
Measuring and managing sustainability data
Microsoft Cloud for Sustainability helps customers to track and to manage
the world to reduce their carbon footprints, understand water-related risks, sustainability data at scale. In 2023, we expanded Microsoft Sustainability
and make environmental decisions through our learnings and with the Manager to include Scopes 1, 2, and all 15 categories of Scope 3 carbon
power of data, AI, and digital technology. emissions across organizations’ operations and value chains.
Building a Planetary Computer Empowering communities with planetary data

We are aggregating environmental data from around the We are providing open access to petabytes of environmental monitoring
world and putting it to work through computing and machine learning data in consistent, analysis-ready formats to help empower communities with
in a Planetary Computer. actionable information.
We are working to create

devices that are built with
integrity and with reduced
waste and carbon impact
across their life cycles.
Microsoft Cloud Monitoring and

managing environmental
Analyzing and reporting
ESG performance
for Sustainability sustainability performance
In 2023, we expanded Microsoft Sustainability
As the world shifts from voluntary to regulatory
environmental sustainability reporting, tools that can
Sustainability Champion: help capture and analyze data at scale will become
Manager, enabling calculation and data
Throughout our Microsoft sustainability journey, management of Scopes 1, 2, and all 15 categories Matt Hellman increasingly important.
one of the most important things we’ve learned of Scope 3 carbon emissions across organizations’ In 2023, we introduced Project ESG Lake (Preview),
is that we need better data. As we’ve worked to operations and value chains. These new capabilities enabling organizations to centralize and standardize
I am a Sustainability Global Black Belt
address this challenge, it has led us to advance our also give customers the ability to gain full visibility data in a comprehensive ESG data estate.
(GBB) at Microsoft, where I work with
reporting and management tools to garner richer into their environmental impact to address reporting This solution offers an expansive ESG data model
customers to achieve their sustainability
insights and inform our actions. In keeping with needs. In addition, a new ESG value chain solution that organizations can use to transform data from
targets by adopting best practices and
our commitment to empower others on their own in Sustainability Manager enables customers to across business units and supply chains into a
technology solutions. I am also a co-
sustainability journeys, we are sharing our learnings use surveys and customized workflows to collect standard schema ready for advanced analytics
leader for the Sustainability Connected
and technology to help customers more efficiently from their value chain partners the detailed and reporting.
Community (SCC), a global network
advance their progress with data. data about sustainability activities needed for
of employees at Microsoft who are To help our customers track the required actions
reporting, science-based target setting, and
Microsoft Cloud for Sustainability helps passionate about learning, inspiring and document evidence for emerging ESG reporting
reduction strategies.
organizations to track and manage data at scale others, and activating sustainability in and compliance initiatives, we rolled out the first
and to unify ESG data so they can record, report, Additionally, the Microsoft Cloud for Sustainability their lives and careers. Climate change is of several planned new reporting templates in
and holistically understand the sustainability impact data model was expanded in preview to support the most urgent challenge we face, and Microsoft Purview Compliance Manager.
of their organization and value chain. With a solid water data. The model makes water data available we all have a role to play in shaping our
for use cases such as water sustainability disclosures For regulations coming from the European Union’s
foundation for managing ESG data across their future. It is the intersection of making
and regulatory water quality reporting. Corporate Sustainability Reporting Directive (CSRD),
business units and value chains, organizations can a positive difference for the planet and
we released the CSRD template (Preview). This new
be more prepared to gain the insights needed to driving value for our customers and
template will help organizations to explore and plan
make data-informed decisions that can help to partners that motivates and empowers
for the data required for CSRD and will enable data
transform their business. me every day.
governance workflows to collect data for disclosures,
internally review disclosure data, and generate a
draft report for reviewed disclosure data.
Microsoft Cloud for Sustainability continued
Empowering organizations with Environmental Credit Service (Preview) is a managed

service under Microsoft Cloud for Sustainability Accelerating progress
guidance and training
that provides a common infrastructure to track
In support of our goal of building a community of environmental credit provenance from creation Companies around
shared learning and action, in 2023 we: through retirement. This service helps decrease time
to market and increase the quality and quantity of
the world have begun
Published new LinkedIn Learning modules to
share learnings on how sustainability affects credits—ultimately giving credit purchasers more implementing Microsoft
organizations and how to minimize confidence and fueling marketplace momentum. Cloud for Sustainability tools
environmental impacts.
Turning data into insights with AI to improve sustainability and
Made technical guidance available within the business growth.
Access to more reliable data intelligence enables
Azure Well-Architected Framework, focused on
organizations to make more targeted decisions
workload optimization strategies to help OSTP Group, a Nordic-based manufacturer of
about their sustainability strategies. To help
organizations build more sustainable IT. welded stainless steel tubular products and
customers perform advanced analytics and generate
custom equipment for pressure corrosion
Released new Well-Architected for Industry even more detailed, actionable data insights, we
applications, prioritizes sustainability and has an
guidance to help organizations build Microsoft have built AI into many of our sustainability products Automation, transparency, and centralized visibility
ambitious target to be carbon neutral at its sites
Cloud for Sustainability workloads using proven and solutions. New features in Microsoft Cloud for enable everyone from executives to frontline
by 2025. Using Microsoft technologies, including
best practices and scalable principles for cloud Sustainability such as Intelligent Insights, released business workers to access the data they need
Microsoft Cloud for Sustainability, OSTP built
adoption and governance. to preview in 2023, help organizations find outliers, while spending less time on data collection.
a digital platform to gather and report carbon
Other tools created to empower customers on their trends, and correlations between their activity data AI capabilities in Microsoft Cloud for Sustainability
dioxide emissions data in real-time. Cloud for
sustainability journey include the Emissions Impact and calculated emissions through an integrated and will aid faster decision making and help the
Sustainability helps OSTP measure emissions
Dashboard and Environmental Credit Service. interactive AI model. These insights can inform more organization optimize its roadmap.
accurately and in near-real-time and unify data
impactful decisions for companies and the planet.
Emissions Impact Dashboard is a tool to improve intelligence providing a more comprehensive view
transparency into the carbon emissions generated of the impact of its operations and value chain.
by the use of Azure or Microsoft 365 cloud
services. Using third-party validated methodology,
the application factors in Microsoft’s Scope 1,
2, and 3 (direct and indirect) emissions as well
as the efficiency of a customer’s on-premises
environment.12
Devices Designing and building

for circularity
Extending the life of our devices
Designing for circularity conserves resources,
Reducing the impact of
product usage
We have embedded ecodesign principles, as minimizes waste, and extends the lifespan of Our newest laptops and tablets are ENERGY STAR®
Sustainability is a core part of our product outlined in the ISO/TR 14062 standard, into our our devices. Certified and registered EPEAT® Gold in more than
promise—we work to create devices that are built internal product development process, positioning Our devices are designed to be easier to service 30 countries. We continue to focus on increasing
with integrity and with reduced waste and carbon sustainability and circularity as foundational and maintain so that customers have more flexibility the energy efficiency of our devices to reduce
impact across their life cycles. elements of innovation. and opportunities to extend their use. As we design direct emissions.
We are committed to reducing the carbon 1 Starting at a new product’s inception, defined products that are easier to service with more Our latest products are ENERGY STAR® Certified,
intensity of our devices and we’ve made significant roles and clear sustainability targets are set to replacement components and expanded device consuming less than the recommended energy
investments in designing for a smaller manufacturing guide decision making throughout development. servicing options, we also continue to grow our limit set by the latest ENERGY STAR® computer
footprint by reducing waste, moving to more service network to offer servicing alternatives closer specification. For example, our Surface Laptop Go 3
2 During the initial design stages, screening life
efficient manufacturing processes, and increasing to our customers. This encourages consumers to uses 52% less energy and our Surface Laptop Studio
cycle assessments (LCAs) are used to gauge
the use of recycled and repurposed materials. choose servicing over replacement by removing 2 uses 65% less energy than the ENERGY STAR® limit.
potential carbon reductions of various design
perceived barriers and inconvenience, and by
concepts and to assess circularity. Surface Emissions Estimator
reducing cost.
3 Upon the product launch, detailed LCAs measure Since its inception, the emphasis for the Surface
The newest generation of Surface Laptop, Surface
the tangible achievements in carbon reduction Emissions Estimator has been to facilitate ease of use
Pro, and Surface Laptop Go lines are the most
and circularity, offering valuable insights for and accessibility for all Surface customers. This goal
repairable devices in their product lines to date; and
future design improvements. was further heightened in September 2023, with
for customers interested in self-service, we now offer
spare parts on the Microsoft Store.13 the tool accessible on a standalone webpage, and
integration into Microsoft Intune and the Surface
We publish the carbon footprint
Management portal, thereby expanding its reach
of each device, along with other to millions of new customers. This progress helped
sustainability metrics, in our to establish a new benchmark for other device
manufacturers. We continue to work to embed
Eco-profiles. Rigorous third-party CoPilot in Windows 11 chat functionality into the
ecolabels and standards provide Surface Emissions Estimator, aiming to demystify
validation of our products’ data interpretation for customers, eliminating
the need for extensive knowledge in life cycle
environmental attributes assessment or sustainability in order to understand
The Surface Thunderbolt™ 4 Dock uses 20%
ocean-bound plastic. and achievements. an individual’s emissions impact.
Devices continued
Xbox We have also revamped the update process,

positioning the Xbox as the world’s first gaming
Case study
Supporting game
console with carbon awareness. This innovative Following the initial collaboration with Xbox,
feature means that when a console is plugged in, and as a result of these changes, Epic estimates
creators and
Xbox is the first gaming console to offer carbon- connected to the internet, and has access to regional around 200 MWh per day of savings across the
aware game downloads and updates as part of carbon intensity data, Xbox will intelligently schedule total player base of Fortnite, or 73 GWh per year,
Shutdown (energy saving) mode. We have made game, app, and OS updates during times when which is the equivalent to 14 wind turbines running
significant strides in enhancing the energy efficiency
of these devices while simultaneously adopting
renewable energy is at its highest in the local energy
grid. This scheduling not only ensures convenient
developers for a year.14 Just as importantly, Epic has helped to
reduce the energy bills of its players on Xbox and
innovative approaches to product design aimed at updates but also strives to minimize carbon other platforms.
reducing waste and increasing recyclability within emissions by aligning updates with periods when a
The launch of the Xbox Developer Sustainability Case studies from our collaboration with some of
our Xbox controller lineup. higher proportion of electricity on the grid is derived
Toolkit in March 2023 marked the start of these studios can be read on Xbox Game Devs
from lower-carbon sources.
Recognizing that a substantial portion of emissions Docs today. Xbox continues to partner with the
empowering game creators and developers
in the Xbox value chain stems from console usage, New in 2023, Xbox also added the Active Hours UN-facilitated Playing for the Planet alliance to
with the knowledge and resources they need to
our primary focus over the past year has been to feature. Those that select the Sleep power option promote sustainable game design. We continue to
enhance the environmental impact of their games.
transition the majority of our players to Shutdown can now adjust their console’s active hours. Xbox will add more to our innovative Sustainability Toolkit
This toolkit introduces a range of analytical and
mode. This Shutdown energy saving mode offers boot quickly and be available for remote wake and are collaborating with even more studios
visual systems, measurement tools, and valuable
up to 20 times reduction in power consumption during the user’s selected active hours. When the into 2024.
resources that empower creators to make well-
compared to the higher power Sleep mode. active hours are done for the day, Xbox will fully
informed decisions regarding their games’
Importantly, players still maintain the ability to shut down and will draw 0.5 W versus 10–15 W
energy consumption to lower gamers’ energy
download updates for all their software while in while active.
bills and lower carbon emissions. By utilizing the
energy saving mode.
This year at Gamescom 2023, the world’s biggest toolkit, game developers gain access to precision
event for computer and video games and Europe’s engineering insights that enable them to pinpoint
biggest business platform for the games industry, and reduce energy usage during moments when
Phil Spencer, on behalf of Xbox, was honored to be
presented with the Green Game Studio of the Year
award in recognition of the industry advancements
we have made.
players don’t require maximum power, all while
safeguarding the overall gaming experience from
any adverse effects. We’ve already seen great
success with games like Halo Infinite, Fortnite,
200 MWh per day
of savings across Fortnite’s total player base,
Call of Duty: Warzone 2, and more. or 73 GWh per year, which is the equivalent
to 14 wind turbines running for a year.14
Devices continued
Improving design and efficiency Improving efficiency Advancing measurement and Microsoft Devices is working with the Carbon Trust
with AI Last year, we announced that a limited run of accountability and other leading tech companies, such as Amazon,
enhanced Xbox Series X|S consoles containing Meta, Samsung, and Sky, to develop an industry-
In FY23, we focused on improving data relevance
Our life cycle assessments (LCAs) help to build first specification for measuring, accounting for, and
power supply energy monitoring began providing and precision. First, to better reflect our supply chain
sustainability into our devices with the goal of decarbonizing the carbon emissions associated with
us with anonymized insights into console power and the impacts associated with the manufacturing
facilitating product and supply chain decision connected devices while being used by customers.
consumption. Over the course of 2023, we have of our products, we shifted from a spend-based
making at a larger scale.
been able to use this telemetry to build all-new data approach to using product-specific carbon footprints Microsoft and Xbox, as part of Playing for the
Partnership between Microsoft software engineering models and reports showing the dynamic power to account for the emissions of our devices. Planet, have also worked with the Carbon Trust to
teams and Makersite—an AI and data company consumption of individual titles across the Xbox In addition, we have enhanced our LCA approach, develop a report which aims to provide clarity on
specializing in digital twins—has transformed our platform. By doing so, we have been able to work moving away from a generic model based on the complexity of emissions related to video gaming,
LCA process by shifting from directional modeling with gaming development studios 343 Industries, secondary data to a more detailed model including and how they can be addressed going forward. As a
to a supply-chain-focused environmental impact Mojang, Infinity Ward at Activision, Epic, and others more supplier data. Second, although our customer next step, Xbox is currently working with Playing for
accounting approach. Makersite’s AI gives us the to support our publishing partners in their own use phase methodology is already informed by the Planet and the Carbon Trust to build a carbon
capability to automate the analysis of electronic pursuit of improving their energy footprint. real-world optional diagnostics, a detailed analysis calculator for video game businesses, to support the
product bill of material (BOM) data and material revealed some areas of improvement, such as industry in reducing its carbon footprint.
Microsoft continues to align with the Global
composition data—modeling each part, component, shifting from monthly to daily data.
Logistics Emissions Council framework. This globally
and sub-assembly down to the chemical
recognized and verifiable calculation method is Microsoft has used optional diagnostic data from
composition. Manual effort is significantly reduced
applied across all shipments in the global supply Windows devices to estimate power consumption
compared to a typical LCA process, while granularity
chain network to calculate carbon emissions. since 2020, and each year we have worked
and representativeness is improved.
Shipment-level emissions data empowers everyone to improve the quality of the methodology.
across the supply chain organization through Requiring numbers to be re-baselined each year is
data, reporting, simulation, and the ability to drive necessary to pursue increasingly better data. Initially,
decisions to reduce Microsoft’s emissions. we took a simple approach of gathering Windows
optional diagnostic data, averaging daily energy
We continue to focus on consumption for all sampled devices over a month,
increasing the energy and extrapolating to the entire group. We then
worked to refine the data; by grouping devices by We continue to explore how AI can help improve
efficiency of our devices characteristics significant to energy consumption the design and efficiency of our devices.
to reduce direct emissions. before extrapolation, we were able to focus only on
devices that were being actively used.
Devices continued
Manufacturing and sourcing Quantifying the decarbonization impact from our Optimization control
for sustainability suppliers transitioning to renewable energy, Containers for Xbox are loose loaded rather than
through improvements to our LCAs. By shifting palletized, saving over 400 containers’ worth
In the past year we have made significant away from using generic industry models to of emissions, or 280 mtCO2e. Use of reusable,
steps in improving the sustainability impact supplier-specific primary data, the decarbonization lightweight pallets from factories to destinations
of our manufacturing and sourcing practices. efforts from our suppliers’ transition to renewable resulted in a savings of 950 mtCO2e.
Some examples include: energy are being reflected in our products.
For example, increased use of documented Technology and operational enhancements
Increasing the amount of renewable energy used
in our manufacturing supply chain. In FY23, 59 renewable energy in the supply chain resulted in a Electric vehicles and alternate fuel emissions
suppliers transitioned to using renewable energy reduction of approximately 13 kg CO2 equivalent in remain a focus of outbound shipments and final
in manufacturing facilities for Microsoft with six the carbon footprint of each Surface Laptop mile deliveries. Approximately 25% of all online
transitioning to 100%. These efforts contributed to Studio 2 as compared to the previous generation consumer deliveries were made with an electric or
105,000 mtCO2e, avoiding emissions roughly Surface Laptop Studio.15 Decarbonizing our device carbon neutral option. Our devices supply chain
equivalent to 21,000 homes’ annual average supply chain drove initiatives and solar installation across the
energy usage. distribution network, resulting in three net zero
Meeting our decarbonization goal and achieving
distribution facilities, with a reduction of over
Increasing the number of our suppliers responding carbon negativity by 2030 requires focus on three
1,000 mtCO2e annually.
to the CDP climate change questionnaire from key areas in our device supply chain: measurement
98.3% in 2022 to 99.4% in 2023. This enables and visibility, optimization control, and instilling
Microsoft Devices to have greater visibility into technology and operational enhancements to drive
emissions reduction and lead the industry.
25%
supplier progress towards a sustainable future by
partnering with suppliers to identify areas of Measurement and visibility
improvement, set targets, implement best
The financial budget is mirrored and translated into
practices, and track progress.
a carbon emissions budget for logistics. This enables Approximately 25% of all online consumer
Improving the integrity of the decarbonization precise emissions target setting for monthly/ deliveries were made with an electric or
data shared by our suppliers by conducting quarterly reporting actuals against targets, driving carbon neutral option.
internal audits and independent third-party transparency across the business and enabling
external audits, including onsite supplier decision making and recalibration to the annual
assessments for suppliers who transitioned to target and control annual results. Microsoft Devices
using renewable energy in FY23. logistics emissions resulted in a 10% reduction in
emissions. Of that reduction, 5% is tied to reduction
initiatives throughout our logistics network.
Green software Windows energy recommendations

With Windows running on more than a billion
Developing standards, tools, and
best practices
The Impact Engine Framework, a new project
designed to help technologists to model, measure,
simulate, and monitor the environmental impacts
computers around the world, small software Microsoft continues to be a steering member of the of software without having to code using a plug-in
Microsoft remains committed to adopting green and configuration changes in the operating Green Software Foundation (GSF). With members infrastructure. The Azure model was one of the
software engineering principles in every step system can result in significant reductions in on the steering committee, various working groups, first to be created and showcased at the
of building, deploying, and managing software energy consumption for our customers. With the and developers on Open Source projects, Microsoft 2023 Decarb Software event.
applications, making them carbon efficient. introduction of Energy Recommendations in remains committed to building a trusted ecosystem
Windows 11 in February 2023, we continued the work of people, standards, tooling, and best practices for Releasing a white paper, in a partnership with
Carbon efficient software can be described as
we started in 2022 to make Windows carbon aware, creating and building green software. UBS and WattTime through the Green Software
energy efficient (uses less energy to perform a given
with a focus on empowering customers to reduce Foundation, outlining our contributions to
workload), hardware efficient (uses less hardware Some of our accomplishments together include:
energy consumption and carbon emissions, and the open-source Carbon-Aware software
to do the same workload), and carbon-aware (does
improve battery life. The Software Carbon Intensity (SCI) Specification, development kit (SDK). The Carbon-Aware SDK
more when the available electricity is cleaner and
an easy-to-implement industry standard created tool lets developers use a web API and command
does less when the available electricity is dirtier). Energy Recommendations make it easier for
by the Green Software Foundation to help line interface to assist in building carbon-aware
The following sections detail what Microsoft is doing customers to make choices about their energy
organizations understand and prioritize their software, enabling any organization to become
to increase the carbon efficiency of our software, settings. This collection of settings can have an
approach to reducing carbon emissions. It is in the carbon-aware by modifying computation to take
and to advance green software practices with outsized impact on power consumption. In the
final stages of ISO’s review to become an ISO advantage of the lowest-carbon sources of
customers and partners and across the globe. first four months this functionality was available
standard, which is the first step in becoming an energy possible.
(February to June 2023), approximately 11 million
internationally recognized standard. Additionally, Microsoft Learn offers training on the
Energy Recommendations customers adopted one or more recommendations.
Principles of Sustainable Software Engineering for
make it easier for customers developers to build green software skills through
to make choices about their hands-on learning. The training helps developers to
understand a core set of competencies needed to
energy settings.
define, build, and run green software applications.
We seek to build a trusted ecosystem of people,

standards, tooling, and best practices.
Green software continued
Empowering change with cloud “The time for climate Helping customers and partners Azure AI and Wildlife
computing and AI adaptation is now. It optimize Azure workload Protection Solutions
Vestas is using a combination of simulation, is encouraging that Microsoft developed new technical guidance and Wildlife Protection Solutions (WPS) uses remote
modeling, and machine learning in its business, best practices to help customers and partners cameras to gather image data about the status of
from minimizing the wake effect affecting windmill
Microsoft is leading by adopt and operate on Azure sustainably as part the species it protects, but the number of images
turbines within wind farms to designing the example to prioritize of the Cloud Adoption Framework. This covers that must be analyzed before action can be taken
turbines themselves. getting the most guidance across the cloud adoption journey, from is overwhelming. To overcome this challenge, WPS
strategy and planning to optimized landing zones, uses MegaDetector, an AI model developed by
Microsoft and Vestas co-developed an improved advanced technology in sustainable cloud operations, and governance setup. Microsoft AI for Earth, running on Microsoft Azure
solution for the existing Vestas Turbine Simulator
(VTS) to run large-scale simulations for wind turbines
the hands of those who We’re working across Microsoft to help customers
Virtual Machines to accelerate the processing of
need it most and making camera trap images. MegaDetector improves
to help determine optimal placement in wind farms and partners plan their path forward, improve
threat detection accuracy and processes images
and material design for location. The solution uses access a priority above sustainability, and create new business value while
faster than other AI models tried, in some cases
Green Software Foundation’s Carbon-Aware SDK reducing their operational footprint. This includes:
to efficiently move workloads between regions.
all else. We’re excited by up to 50%. The processing power of Azure AI
Sustainability guidance within the Azure Well- infrastructure makes a critical difference and offers
Vestas has deployed this solution to help it lower to bring this weather Architected Framework, designed to help optimize performance gains.
carbon emissions based on renewable production intelligence to Africa”. Azure workloads for greener IT, as well as a new
capacity, and to optimize cost by utilizing spot
Azure Well-Architected Framework sustainability
instances availability in the regions. Shimon Elkabetz,
self-assessment.
CEO and Co-founder at Tomorrow.io
Microsoft is also collaborating with weather
The newly launched Cloud Adoption Framework
intelligence leader Tomorrow.io to introduce an
– Sustainability Guidance.
innovative cloud-based solution to bridge the
weather risk gap with swift, efficient, affordable, and The primary objective is to provide Sustainable software engineering practices in
reliable solutions. This pioneering solution harnesses governments in the Global South with Azure Kubernetes Service, which includes design
Tomorrow.io’s extensive global coverage, which the opportunity to empower existing and configuration checklists, recommended
includes near real-time data from a novel weather meteorological agencies, enabling weather design, and configuration options.
radar satellite constellation, and incorporates it with intelligence, early warning systems, Educational sessions, hackathons, and value-based
a machine learning and AI-powered, high-resolution and climate information to citizens delivery workshops run by our Customer Success
global weather model hosted on the Azure High- and organizations. Unit for customers interested in optimizing their
Performance Computing platform. Azure environments and applications.
Arts and culture Ahluwalia’s Autumn/Winter 23 collection, Symphony

Unlocked, features Digital IDs powered by EON’s
Ahluwalia collaborated with Microsoft in 2021 for
the award-winning Circulate Program, creating
Product Cloud platform, built on Microsoft Azure. an entirely new AI platform that would allow
To reveal a unique story and soundtrack behind customers to upcycle and recycle their preloved
Ahluwalia Circulate and each piece, customers scan a QR code on their clothes. Circulate has since become an integral part
Symphony Unlocked garment with a smartphone. Ahluwalia endeavors of Ahluwalia’s operations. The incorporation of
to encourage people to cherish and nurture their Digital IDs powered by EON into their new clothing
Innovations in AI are a critical component to garments by providing digital access to the stories line represents the next step in the evolution of
accelerating circularity in the fashion industry. behind each product. With this transparency, Ahluwalia’s business model.
This year, we brought together two existing enabled by technology, they can also discover
Microsoft partners, EON and Ahluwalia, to extend The partnership between EON and Ahluwalia
each item’s unique production process and the
access to data traceability at the product level provides a glimpse into the high-tech future of
creative inspiration.
and enable customers to feel a deeper sense of fashion that cloud technology, powered by Microsoft
connection with the garments they’re wearing. Azure, can help accelerate.
Watch the video here: Ahluwalia Symphony
“Building a circular economy depends on data,” Unlocked – Microsoft Unlocked Upcycling fashion with STEAM
explains Natasha Franck, Founder and CEO at EON.
Microsoft partnered with Junk Kouture, a worldwide
“We need visibility of products at every stage of their “The way our community creative platform set on inspiring young people
life cycle—how they’re made, where they’re made, connects with our brand aged 13 to 18 to create upcycled fashion that brings
and how they’re recycled. That’s a huge challenge attention to the issues facing society at large.
in the fashion industry, where clothing brands have and our clothes is important The partnership’s goal is to help a new generation of
notoriously complex supply chains.” to us. Technology is helping talented, eco-conscious designers use their passion
us to ensure the story to create a better, healthier world. Microsoft tools
allow them to make the most of their creative spark
behind our clothes is and truly bring their most ambitious pieces to life.
heard and seen.” In partnering with Microsoft, Junk Kouture hopes to
use STEAM (science, technology, engineering, art,
Priya Ahluwalia, and mathematics) to help bring even more young,
Creative Director and Founder of Ahluwalia forward-looking creators to the table.
Ahluwalia aims to provide transparency at every

stage, from creation to closet.
Planetary Computer Within the Microsoft Planetary Computer, we

provide open access to petabytes of environmental
Partnering on the
Planetary Computer
Esri and Synthetaic
In July 2023, the Planetary Computer joined
monitoring data in consistent, analysis-ready Microsoft’s Azure Space product group, which
formats. This data has the power to unlock Maps depicting the intactness of global biodiversity
will enable Microsoft’s partners and customers to
The impacts of climate change are often unevenly adaptation and resilience research, planning, and have become a critical tool for spatial planning and
use the Planetary Computer in new ways. Today,
distributed, with a greater burden falling on those projects in communities globally, ensuring that all management, monitoring the extent of biodiversity
Azure Space is building upon the existing catalog
living in poor and marginalized communities, people have access to the actionable information across Earth, and identifying critical remaining
of the Planetary Computer to drive a path to new
particularly in the Global South. While individuals they need to protect and preserve their communities intact habitat. Yet these maps are often years out
capabilities and partnerships that will empower
in these groups are usually not the largest and surrounding environment. of date by the time they are available to scientists
users with some of the largest Earth observation
contributors to climate change, they have been and policymakers. To address this gap, Impact
With over 120 data sources and over 50 petabytes datasets at their fingertips—petabytes worth of
disproportionately affected by extreme climate Observatory and Vizzuality used the Microsoft
of data, the Planetary Computer maintains one possibilities for understanding our planet. In keeping
events including droughts, floods, storms, and Planetary Computer to create 100-meter gridded
of the largest collections of open data about with Microsoft’s partner-first approach, Esri and
heatwaves, which contribute to other problems like maps of terrestrial Biodiversity Intactness for the
our planet. In 2023, we continued to grow the Synthetaic will provide essential capabilities that
food insecurity and exacerbate existing challenges entire planet. In 2023, we released these maps
Planetary Computer data catalog, adding nine new integrate with the Planetary Computer. By combining
like poverty. through the Planetary Computer data catalog,
datasets that provide insights into land, ocean, the power of data analysis in Synthetaic’s RAIC with
where they can now be used by conservation
To avoid the worst effects of climate change, and atmospheric changes over time. Each month the data visualization of Esri’s ArcGIS, customers
stakeholders globally.
governments, organizations, companies, and citizen the Planetary Computer data catalog is accessed will be able to glean insights from data within the
scientists in these communities deserve equal billions of times by researchers, scientists, students, Planetary Computer at vast speed and scale.
access to open, interoperable, reliable, and timely and organizations to measure, monitor, model, and Chesapeake Conservancy
climate data. ultimately manage Earth’s natural systems.
In a regional effort to protect 30% of the
Storing, indexing, and distributing data at this Chesapeake Bay watershed by 2030, the Chesapeake
scale has required that the Planetary Computer be Conservancy is collaborating with Microsoft to
built from the ground up with cloud optimization develop an AI system that maps ground-mounted
and interoperability in mind. As a result, Microsoft solar arrays using up-to-date satellite data, enabling
has become one of the largest supporters of the them to regularly track one of the most rapid
SpatioTemporal Asset Catalog (STAC) specification, drivers of land use change in the Chesapeake
an open community standard for increasing access Bay watershed. Going forward, the Chesapeake
to earth observation and earth science data in Conservancy will work with Microsoft and our
the cloud. The Planetary Computer maintains one of partners to produce their 1-meter land use data
the largest collections of open data about
more frequently and accurately, keeping an active
our planet.
pulse on the entire Chesapeake Bay watershed.
Carbon Trust Green Software Foundation Sustainable Packaging Coalition Circular Electronics Partnerships
The Carbon Trust has created a secretariat titled Microsoft continues to support sustainability With over 600 member organizations, the The Circular Electronics Partnership (CEP) unites
Decarbonizing the Use Phase of Connected through its efforts with the Green Software Sustainable Packaging Coalition (SPC) is its six influential partners, industry leaders,
Devices (DUCD) with representatives from Foundation, of which it is a founding member. the leading voice on sustainable packaging. and the wider stakeholder network behind
several leading technology companies With participation on the steering committee, For many years, Microsoft has been a key a vision for a circular electronics industry by
including Microsoft. The secretariat is focused Community, Open Source, and Standards partner of the SPC, working with like-minded 2030. CEP drives collective action to resolve the
on developing a standard for measuring the Working Groups, and Open Source green member organizations to use the power of barriers that companies face in their transition to
carbon emissions of connected devices and software projects, Microsoft is committed industry to advance sustainable packaging circular electronics.
using various carbon removal instruments to to helping developers become Green through education, collaboration, and
Learn more about CEP
decarbonize those emissions. Software Practitioners. action. Through these key pillars, Microsoft’s
partnership with SPC has helped create a more
Learn more about the Carbon Trust The foundation is advancing carbon-aware
informed marketplace focused on developing a
computing, industry standards to improve how
circular economy.
we measure software, building knowledge and
tools on green software principles and patterns, Learn more about the Sustainable
fostering climate advocacy, and accelerating Packaging Coalition
innovation to nurture a workforce fit to build
climate-conscious solutions that reduce the
environmental impacts of software.
Learn more about our partnership

Global sustainability
How are we
enabling a more
sustainable world?
Microsoft’s actions alone will not solve the climate Investing in innovation 72
crisis. As a global technology leader, we also commit
Accelerate sustainability solutions with AI 76
to help societal conditions that will cultivate a net
zero economy. We’re focused on accelerating Policy and advocacy 79
the availability of new climate technologies, Employee engagement 81
strengthening our climate policy agenda, helping to Scaling impact through Green Skilling 82
develop a more reliable and interoperable carbon Progress through partnership 83
accounting system, advocating for skilling programs
to expand the green workforce, and working to
enable a just energy transition. Captured by:
Holly Alpine
Community
Environmental
Sustainability,
United States
Global Our targets Our progress

sustainability Using our voice on climate-related public policy
We aim to support new public policy initiatives to accelerate carbon reporting,
Advancing progress through advocacy
In 2023, Microsoft expanded our global policy engagement to drive consistent
reduction, and removal; the transition to clean energy; water access and stress and interoperable sustainability reporting, support certifiable long-lasting
We are committed to helping build the enabling reduction; and the ability to measure, manage, and protect ecosystems. carbon removal projects, expand carbon-free electricity, advance circular
societal conditions that will support a net zero economy solutions, and align AI with sustainability outcomes.
economy for Microsoft, our customers, and
the world. Investing in climate innovation $761 million allocated towards climate technologies1
We have created a $1 billion Climate Innovation Fund to accelerate the global Through the Microsoft Climate Innovation Fund (CIF), we have allocated $761
development of carbon reduction and removal technologies, as well as million towards climate technologies that reflect our vision for the sustainability
related climate solutions to reduce water and waste. markets of the future.1
Driving collective action Partnering to accelerate progress with AI

We will continue partnering with others to drive deeper engagement to The ability of AI to measure, predict, and optimize complex systems as well
help the world reach net zero, focused on rigorous and consistent carbon as accelerate the development of sustainability solutions can help the world
accounting and innovation, water access and stress reduction, and the circular overcome key challenges. We are working with a wide range of partners to
economy. help unlock the full potential of AI for accelerating progress towards net zero.
Empowering our global workforce Tools to help close the green skills gap
We recognize that our employees are the most important asset and resource Microsoft and LinkedIn are taking action to empower the workforce with the
in advancing innovation in sustainability and are creating opportunities for green skills needed to drive climate progress. We are sharing our research,
them to contribute to our efforts. learnings, and tools to empower and build the workforce we need.
$761M
Since launching our $1 billion Climate
Innovation Fund (CIF), we have allocated
$761 million towards climate technologies.1
Investing in With over 55 investments in CIF’s portfolio, we have

fostered relationships with our relevant business
Through the CIF,
Microsoft is investing
innovation
groups and designed opportunities to integrate with to build a high-quality
our climate intelligence and technology solutions. carbon removal market.
As an end customer, we are also able to offer novel
contracting structures that align with the needs
Since launching the Microsoft Climate Innovation of our portfolio companies, such as multi-year or
Fund (CIF) in January 2020 as part of our corporate forward procurement contracts and pilot projects.
sustainability commitments, we have allocated Our investments create impact beyond financial
$761 million towards climate technologies that investment by sending a demand signal to
reflect our vision for the sustainability markets of nascent markets, advocating with industry and
the future.1 Our investment priorities have evolved government agencies on shared policies and market
to focus on specific sectors. We remain committed building standards, and catalyzing additional
to optimizing climate impact in underfunded capital resources.
markets, with alignment to climate equity and our
core business. We continue to lead on first-of-a-kind climate
finance solutions and build bridges to bankable, Investing in carbon reduction FlexiDAO, a carbon-free energy analytics platform
We are advancing innovation beyond Microsoft’s scaled climate technologies that we and the world and removal solutions in which CIF invested in 2022, is helping Microsoft
four walls through CIF, with an emphasis on need to create a more sustainable and prosperous source, track, and certify energy towards our
expanding access to capital for innovators working future for all.
Addressing our own 100/100/0 carbon-free energy commitment.
to address the climate challenge, build new markets, environmental footprint The advanced and detailed management of a
and use AI to accelerate solution development In 2023, we brought together our portfolio in clean energy portfolio requires digital solutions to
Through CIF, we made investments in companies
and scale adoption. We continue to invest across Redmond, Washington, to connect our ecosystem accelerate market adoption, which we’re partnering
positioned to directly affect our Scope 2 and 3
energy systems, industrial supply chains, and natural of innovators and collaborate on reaching scale with FlexiDAO to develop and deploy across 37% of
emissions. These investments include:
systems, and prioritize direct equity and debt and our shared impact goals. It was a powerful our global Scope 2 carbon-free energy portfolio.
reminder of the value of convening entrepreneurs H2 Green Steel, a near-zero emissions steel
investments to finance solutions with the potential
and stakeholders working across multiple sectors to producer in Sweden, aims to build the world’s first Heirloom Technologies, a direct air capture
for mainstream adoption by 2030.
catalyze partnerships, share diverse perspectives, large-scale green steel plant with 95% reduction in company, currently operating America’s first and
As a corporate climate investor, we are differentiated and be reminded that we are in this together. carbon dioxide emissions compared to traditional only commercial direct air capture facility, has built
by our ability to mobilize our core business resources steel-making. Powered by renewable electricity, the on our investment in 2021 to provide Microsoft with
in support of our investees, in addition to providing plant will generate enough green hydrogen to bring up to 315,000 tons of permanent carbon removal
catalytic capital. 5 million tons of green steel to the market by 2030. delivery over a multi-year period.
Investing in innovation continued
Building the high-quality carbon Innovative portfolio collaborations Investing in water

removal market To meet climate needs, both innovation and We expanded our focus on water innovation in 2023 with our work in building
Unlocking the supply of high-quality carbon collaboration will play important roles. In 2023, a new strategy led by WaterEquity, a nonprofit investment manager focused on
removal credits is a core priority for CIF’s broader partnerships between CIF portfolio companies, expanding access to clean water and sanitation across the globe. This strategy,
investments. Within that area, we advanced the such as the following, helped to amplify the climate Sustainability “Water and Climate Resilience,” helps to improve and expand water infrastructure
nature-based solutions opportunities with new impact of their technologies. Champion: in the Global South and will work to unlock access to clean water for an estimated
investments in digital monitoring, verification, In 2023, CarbonCure Technologies and Heirloom 10 million or more people.16
and reporting (MRV) and ecosystem restoration.
Haley Alesi
Technologies teamed up to demonstrate the power
These include the following: of direct air capture paired with permanent carbon
Yard Stick Public Benefit Corporation (PBC) dioxide storage in concrete to achieve carbon As an outdoor
provides in-ground measurement of soil carbon. removal. Heirloom Technologies captured carbon enthusiast, I have
This is a crucial digital MRV service to the carbon dioxide from the atmosphere using their direct air seen the direct
markets, accelerating project developers’ time capture technology in Brisbane, California, while effects of climate
to market and helping to ensure customers are CarbonCure’s reclaimed water technology injected change already and
purchasing high-quality credits. the captured carbon dioxide into the process share a sense of
wastewater at a Central Concrete batch plant in San urgency to protect
Vibrant Planet PBC uses complex data fusion and AI
Jose, California. our planet.
to map forests at fine scale to support its customers
At Microsoft, I have
in monitoring current conditions and devising Climeworks anchors the direct air capture
the privilege of
adaptive management strategies to mitigate wildfire technology in Louisiana’s Project Cypress with
developing tools
and climate risk, improve climate adaptation, and Ohio-based nonprofit Battelle and Heirloom
and systems that
enhance ecosystem services. Technologies. This project was one of two initial
empower Microsoft’s
selections by the United States Department of
suppliers to operate
Energy as one of two under the advanced tier of
more sustainably,
the regional DAC Hubs program. If awarded, the
using the large
project will receive federal funding and is set to
stage and voice
scale up to 1 million metric tons of annual carbon
that Microsoft has
removal capacity.
to extend positive
and sustainable
impacts globally.
LineVision uses AI and computational fluid KOKO Networks, a clean technology company that EverEnviro, a Green Growth Equity Fund portfolio
AI This is a feature powered by AI dynamics to integrate local weather data with near operates a bioethanol cooking fuel utility in Kenya, company and one of India’s leading producers of
real-time ground sensor measurements to provide a is helping to switch households from charcoal to renewable natural gas, is supporting farmers to
Investing in AI
reliable hourly rating of the current-carrying capacity clean and safe fuel. KOKO reached its one millionth sustainably clear their fields in a faster manner,
The Climate Innovation Fund has made several of transmission lines. This dynamic line rating allows customer this year and is expanding to Rwanda and helping grow crops on time with better yields. It has
investments in 2023 in innovative uses of AI to transmission owners to unlock additional carrying other East African countries.16 created a network of Village Level Entrepreneurs
address some of climate’s biggest questions. capacity from their existing infrastructure compared to harvest, collect, and transport agri residue to
AI excels at combining disparate datasets with to traditional static line ratings and bring additional KOKO Networks its renewable natural gas plants, creating rural
varying spatial and temporal characteristics, renewable energy onto the grid. employment in the residue supply chain. Through its
enabling the data to relate so that it can be reasoned operations, EverEnviro is ensuring better waste
against—and this is exactly the type of technological Equity as a core principle management in both urban and rural areas by using
capability needed to provide more timely answers multiple feedstock in its processing and providing
Climate equity is a core principle of our investment
to the pressing questions being posed by a access to alternate clean fuel.
strategy. We recognize the disproportionate impact
changing climate.
of climate change on communities around the world Solstice, a CIF portfolio alum, is collaborating with
CIF is focused on areas where we believe AI and work to ensure we are investing in leaders and our energy procurement team and ENGIE North
can make a material difference, including novel companies that meet people where they are with the America on the development of two community
material development, climate intelligence and solutions they need. solar projects in Illinois that will serve historically
risk forecasting, digital MRV, and environmental excluded communities and help reduce participating
We know that to reach global climate goals, we
monitoring. In addition to Vibrant Planet PBC, residents’ electric supply costs by up to 60%.17
need to invest in a clean energy transition on
mentioned previously, in which we shared how we
virtually every continent and with every community. We consider every CIF investment through the lens
are building the high-quality carbon removal market,
These communities have a right to thrive, which of climate equity and social co-benefits. This will
examples in our portfolio include the following:
means increasing energy access and bringing CrossBoundary Energy Access, a project financing continue to be a focus as we invest our capital.
Mitiga Solutions provides climate risk intelligence healthier, more affordable solutions to the facility for solar mini grids, has funded its first batch
that combines science, AI, and high-performing market. We are investing in clean energy growth of mini grids in Nigeria with development partner
computing to help customers analyze, report, and infrastructure that directly serves low-to-
1M
ENGIE. Around 28,000 people will have first-time
and act on their business exposure to climate risk medium income households. Investments include electricity access, including productive energy
through their self-serve platform EarthScan™ and the following: loads for grain milling and other income
risk models. Mitiga’s mission is to make the world generating activities.16
more resilient by providing climate intelligence on KOKO Networks is helping households switch
any asset, anywhere in seconds. from charcoal to clean and safe fuel. KOKO
reached its one millionth customer this year.
First-of-a-kind financing Impact measurement and reporting Skilling for green jobs New Sun Road actively supports skilling and
encourages community contribution. It has
Many of the first-of-a-kind (FOAK) commercial At the launch of the Climate Innovation Fund, The clean energy transition will require a new
partnered with Microsoft to establish solar-powered
projects in our portfolio have been funded with we partnered with Rhodium Group to develop a generation of skills and talent to fill the economic
community centers in rural Guatemala that provide
an objective to create a bridge to bankability bespoke approach to forecasting environmental opportunity potential and green jobs. Our portfolio
broadband, digital skills, devices, educational
and economic sustainability alongside technical impact outcomes to optimize for climate impact companies, such as the following, are training the
experiences, and mentorship to women and youths
outcomes at scale. We are learning that structuring across CIF’s diverse priority sectors and financing workforce that can build the green economy of
in rural and high-migration areas. The company
these investments requires balancing flexibility and mechanisms. We have learned the challenge and the future.
often partners with local organizations to design,
creativity, while also ensuring we set our investees necessity of adequately quantifying the catalytic
BlocPower has been working since 2021 to install, and operate renewable energy systems, as
up to demonstrate the performance track record impact of our capital. With a portfolio of 55
ensure that green jobs include underrepresented well as train local technicians and entrepreneurs
required to raise institutional finance. investments, we can now internally benchmark
community members. In partnership with the to manage and maintain microgrids and provide
impact per dollar invested, which allows us to
We appreciate that FOAK risk involves not only New York City Mayor’s Office of Criminal Justice, customer support, creating jobs and building
further filter for the highest impact for our portfolio.
technology risk, but also development risk. BlocPower’s Civilian Climate Corps program has expertise in the local economy.
CIF is supporting the GHG emissions accounting
This requires teams that want to build FOAK projects trained over 1,700 members in skills such as HVAC
ecosystem through an investment in Novata, whose
to be sure they have the right skills, talent, and and electrical, largely in communities hardest hit by
digital platform was designed by and for the private
culture to execute projects successfully, as the gun violence.16
equity market and radically simplifies the process
competencies needed for project development are
of collecting, analyzing, and reporting on ESG and Eavor’s technology solution and target geographic
very different from those needed for technology
sustainability data. locations offer a valuable chance for those who
development in the initial stages of the company.
work in conventional fossil fuel companies to join
a climate-focused organization and apply their
industry best practices to facilitate a transition
towards cleaner, sustainable energy sources.
The geothermal industry has immense promise
as a catalyst for economic growth in the United
55
States, particularly benefiting rural communities.
The alignment presents a unique opportunity to
transfer technical knowledge and skillsets required in
We are advancing innovation beyond the oil and gas sectors directly, while also providing
Microsoft’s four walls through CIF, with a direct benefits to the communities that have been
portfolio of over 55 investments to help affected by fossil fuel production and use.
address the climate challenge.
Accelerate AI This is a feature powered by AI
sustainability Unlocking the transformative potential

of AI for sustainability
solutions with AI While AI has the potential to accelerate the world’s sustainability transformation,
its success is not guaranteed. Establishing the right enabling conditions is
critical and the right enabling conditions can help initiate a self-sustaining
cycle, akin to a flywheel, in which AI can generate sustainability solutions that
Microsoft is investing in AI-based solutions in areas
expedite decarbonization.
where progress on our global sustainability goals is
bottlenecked. As the world enters a new era of AI, AI’s three game- Microsoft has outlined a five-point playbook for establishing the enabling
“Given the urgency
there is both an opportunity and an urgent need to conditions needed to use AI ethically and responsibly to accelerate the global
of the planetary changing abilities
focus the abilities of AI on accelerating sustainability. sustainability transition.
In November 2023, we published a white paper and
crisis, society needs On the journey to net zero, the world has
faced many bottlenecks to progress. AI has
playbook that expands on the incredible potential to push harder on Five-point playbook… …to unlock the flywheel for
three unique abilities that can help society
of AI to accelerate sustainability solutions and the AI accelerator 1 Invest in AI to accelerate accelerating sustainability
overcome key bottlenecks to this progress.
introduces our five-point playbook for creating sustainability solutions
while establishing These include the ability to:
the needed enabling conditions to unlock the
2 Develop digital and More
transformative potential of AI for sustainability. guardrails that Measure, predict, and data infrastructure for sustainable
steer the world optimize complex systems the inclusive use of AI AI operations
safely, securely, and for sustainability

Accelerate the development 3 Minimize resource use
equitably toward of sustainability solutions Accelerating
in AI operations
net zero emissions, the transition
4 Advance AI to net zero
climate resilience, Empower the More
policy principles
sustainability workforce Greater AI-enabled
and a nature-positive and governance
decarbonization climate
for sustainability
future.” solutions
5 Build workforce capacity
Accelerating AI with to use AI for sustainability
Sustainability: A Playbook
Accelerate sustainability solutions with AI continued
Partnering to accelerate progress Accelerating the development of better batteries Enabling more efficient carbon capture and storage
with AI BatteryML is an open-source tool that aims to Carbon capture and storage involves capturing carbon dioxide from industrial
streamline and unify the approaches to predicting emissions and storing it in subsurface structures. To optimize the amount
The ability of AI to measure, predict, and optimize and analyzing battery performance. In 2023, of carbon dioxide that can be safely stored, we have collaborated with
complex systems as well as accelerate the BatteryML harmonized the fragmented and diverse Schlumberger and Northern Lights to build an optimization workflow based on
development of sustainability solutions can help the Sustainability
landscape of battery data by introducing a unified global numerical optimization. This workflow relies on an AI simulator to find
world overcome some of the key challenges we face data format. This made it possible for various
Champion: the optimal location of the carbon dioxide injection wells. The AI-based carbon
on the transition to net zero. Microsoft is working models and features to be cohesively applied across Bichlien Nguyen dioxide flow simulations and genetic-based optimization on a test case resulted
with a wide range of partners, such as the following, multiple datasets, simplifying the experimentation in providing superior well placement, $50 million higher net value, faster total
to help unlock the full potential of AI for accelerating process and amplifying the efficacy of analyzing workflow time, and lower compute costs under all conditions tested.
progress towards net zero. factors that dictate lithium-ion battery performance. Bichlien is a
BatteryML’s versatile model repository underscores principal researcher
Transforming the world’s approach to
the synergy of machine learning and battery at Microsoft Research
measuring emissions
science. Future directions involve broadening its AI4Science and has
The Global Carbon Budget project, in collaboration
model repository, incorporating real-time data a PhD in chemistry.
with Tsinghua University, aims to develop the world’s
analytics, and fostering collaborations with the wider She is working to
first near real-time global carbon budget assessment
research community. help accelerate
framework driven by AI and data science techniques.
the development
In 2023, the team outperformed the state-of- Reducing embedded emissions in concrete of sustainable
the-art model in reconstructing ocean historical The University of Washington aims to offset the use technologies.
observations and predicting ocean carbon sink of classic concrete with biomaterials. The concrete Most recently, she
data in a near real-time context. The next frontier is industry is estimated to account for 8% of global has been working
broadening the project’s scope to encompass more greenhouse gas emissions, with 80% of that impact on the application
comprehensive facets of the global carbon budget. attributable to cement, a component of concrete. of AI for the
To propose concrete formulations that meet desired discovery and design
quality criteria, machine learning is used to evaluate of more sustainable AI can be used to evaluate large numbers of candidate materials to aid in the
the large number of candidate materials. We are discovery of more sustainable concrete and other materials.
molecules
currently performing experiments to demonstrate and materials.
the utility of machine learning in accelerating
discovery and demonstrating that bio-cements can
meet strength requirements for various applications.
Accelerate sustainability solutions with AI continued
Developing climate resilience with AI Helping guide disaster response Microsoft is working with partners from around the Better understanding global biodiversity
Microsoft AI for Good Lab is researching the use world to help better understand, halt, and ultimately The world currently lacks the consistent, frequent,
As highlighted by the IPCC, the world is already
of new AI models and methods in supporting reverse the loss of nature. high spatial-resolution observations of biodiversity
experiencing the impacts of climate change. AI can
first responders during the immediate aftermath that are needed to deliver a nature positive world.
be used to help better understand risks and inform Helping to conserve the Amazon
of natural disasters. This year, in partnership with For example, it’s been estimated that less than 1%
the response to disasters when they strike. The Amazon rainforest, one of the Earth’s most vital
Planet Labs PBC and its temporal and spatial of the planet has been sampled at a resolution of
ecosystems, faces a dire threat as approximately 18%
Improving early warnings resolution data, we provided research on rapid 1 km.18 Microsoft has helped to develop a vision for
of it has already been lost and an additional 17% has
Microsoft is collaborating with the United Nations damage assessments to first responders tasked a global biodiversity observing system as a global
suffered degradation. Deforestation in the Amazon,
to research the use of AI to advance the Early with helping people after the flood in Derna, network of interconnected national and regional
driven by farming and illegal mining, poses severe
Warning for All Initiative, with a goal of better Libya, the wildfires in Maui, and the earthquakes networks to assess biodiversity trends worldwide.
consequences for climate stability and biodiversity.
understanding the populations that may be more in Turkey and Afghanistan. This research has This global system would provide the insights and
To combat this crisis, technology, particularly
at risk of extreme weather events and other proven invaluable to emergency response data needed to realize the world’s biodiversity goals,
AI, is being harnessed to predict and prevent
threats, often due to climate change. organizations in determining how to deploy and including those outlined in the Kunming-Montreal
deforestation. At Microsoft, our AI for Good Lab has
allocate limited resources to save lives and Global Biodiversity Framework (KM-GBF).
Mapping population and risk been at the forefront of this research, collaborating
Knowing where people live and anticipating provide essential services to people affected by with Colombian organizations and utilizing Producing more food with less impact to nature
migration patterns is essential for policy decision natural disasters. innovative methods through Project Guacamaya. Project FarmVibes.AI is an open-source geospatial
making, from ensuring food security to multi-modal machine learning toolkit that includes
Supporting a nature positive world Project Guacamaya employs AI to understand
workflows and example Jupyter notebooks.
evacuation planning and improving population
the interconnectedness between forestation and
health. Population growth and migration in Achieving a nature positive world is essential for The toolkit demonstrates how to build rich heatmaps
biodiversity in the Amazon. It uses high-resolution
places like the Sahel region of North Africa are human well-being, a healthy planet, and economic of nitrogen, phosphorus, potassium, and carbon
satellite imagery from Planet Labs PBC to detect
difficult to characterize due to a lack of recent prosperity for all. However, as highlighted in the using soil sample/sensor data along with remote
deforestation and signs of impending deforestation,
census counts or local population maps. AI can Kunming-Montreal Global Biodiversity Framework, sensing (satellite data). This workflow can help
such as detecting unauthorized roads. Additionally,
help us to produce population estimates where optimize fertilizer use. Another workflow identifies
camera traps in the rainforest capture wildlife
there are geographic or temporal gaps. ...despite ongoing efforts, farms that are irrigated versus rainfed. Future work
movements, and AI algorithms help classify animals
Microsoft AI for Good Lab, Planet Labs PBC, and biodiversity is deteriorating with remarkable accuracy. Sound analysis using
involves building AI models and workflows for water
the Institute for Health Metrics and Evaluation are use, soil carbon estimates using causal modeling,
worldwide at rates unprecedented bioacoustics further distinguishes between bird and
and hyper local weather predictions.
working on research to estimate population at
non-avian wildlife. These technologies can provide
highly granular levels using satellite imagery to in human history.
valuable insights into ecological changes and
better understand the impact of local threats on
early warnings.
health and assess strategies to mitigate risk.
Policy and advocacy Driving reporting and

disclosure policies
Advancing carbon removal
We advanced government efforts to drive clear
We submitted comments to the United Nations
Framework Convention on Climate Change
(UNFCCC) to enable the incorporation of robust
We continued driving consistent, robust, and accounting and high-quality standards, prioritized
highly durable carbon dioxide removal in countries’
We believe that Microsoft and the broader private interoperable GHG reporting metrics, promoting highly durable solutions, and engaged local and
climate plans under Article 6. In 2023, we also
sector have an important role to play in advocating comprehensive yet flexible corporate GHG affected communities.
fulfilled our carbon dioxide removal commitment
for effective and innovative sustainability policies. disclosures and using new technologies to calculate In the United States, we supported and informed under the First Movers Coalition.
In 2020, we pledged to use our voice on public and track emissions and climate impacts. In the the Department of Energy efforts to create direct air
policy issues to help advance global decarbonization United States, Microsoft was an early advocate for a capture hubs. Advocating for carbon-free
efforts to achieve zero waste, to be water positive, first-in-the-nation GHG disclosure law in California electricity policy
and submitted comments in SEC and FAR proposals. In the European Union, we advocated for strong
and to protect all ecosystems.
carbon dioxide removal guidelines, high-quality We doubled down on our efforts to advance
In addition, we made efforts to align our US trade
Over the past year, Microsoft expanded our standards, and clear definitions in the draft Carbon electricity policy around the world, advocating for
associations with Microsoft’s disclosure principles.
global policy engagement to drive consistent and Removal Certification Framework, and we joined the progress that supports sustainability and resilience
interoperable sustainability reporting, support In Europe, we are informing the implementation of Negative Emissions Platform trade association to in carbon-free generation, infrastructure, and
certifiable long-lasting carbon removal projects, Corporate Sustainability Reporting Directive (CSRD) amplify our voice. supply chain.
expand carbon-free electricity, advance circular legislation in European Union member states and
In the United States, we supported legislative
economy solutions, and align AI with sustainability continuing to engage with the Commission on
efforts to streamline permitting for clean energy
outcomes. We magnified our advocacy impact the development of the European Sustainability
and transmission projects, as well as conducted a
through strategic engagements at APEC and Reporting Standards (ESRS).
review to drive alignment between our US trade
COP28, and through efforts to align our US trade We are engaging with governments in Australia, associations and our electricity policy priorities.
associations with Microsoft’s climate and energy the United Kingdom, and Singapore to inform their
policy priorities. In the European Union, we advocated for expanded
ESG reporting rules and working with the ISSB in its
access to clean energy and increased investments in
efforts to create global ESG reporting standards.
grid infrastructure in the Electricity Market Design
Microsoft helped create open-source, technical and the revision of Renewable Energy Directive III.
80
specifications to improve the interoperability of
corporate carbon reports. The Carbon Call will
deliver these actionable solution blueprints to
regulators and standard-setters and continue We are advocating for progress that supports
Microsoft and over 80 other Carbon Call
to advocate for its adoption, in partnership with sustainability and resilience in carbon-free
members are working to improve the generation, infrastructure, and supply chain.
Microsoft and over 80 other Carbon Call members.
interoperability of corporate carbon reports.
Overview
O verview Microsoft sustainability Customer sustainability Global sustainability Appendix 80
Policy and advocacy continued
APEC Energy Ministers Meeting frameworks—such as the Sustainability Indicators 2 Achieving carbon-free grids in the time needed
for Data Centers coming from the Delegated to meet climate targets will require strong policy
Microsoft hosted and participated in the APEC
Act for the Energy Efficiency Directive—to support. Key areas of focus include: robust and
roundtable on GHG accounting standards and a
include AI and incentivize the use of AI to enable diverse markets; data transparency and accuracy
Ministerial roundtable on grid decarbonization as
sustainability outcomes. to inform economic and environmental
part of the 2023 APEC Energy Ministers Meeting in
August. With over 250 government representatives Microsoft partnered with the UNFCCC in its pavilion efficiencies in markets and dispatch; grid
from 20 of the 21 APEC member economies present, at COP28 in Dubai and is supporting the UNFCCC enhancing technologies and expanded
topics ranged from clean electricity procurement to help deliver development and implementation transmission capacity; and deployment of
to electricity policy and carbon accounting. of new systems and tools required to put into fast-emerging carbon-free solutions to augment
These meetings delivered near consensus on a operation the Enhanced Transparency Framework existing clean resources and support a
new aspirational goal of approximately 70% carbon under the Paris Agreement. Using AI and data decarbonized grid.
free and carbon neutral electricity for the APEC analytics, this collaboration aims to augment the 3 The use of advanced digital technologies,
region by 2035, as well as a methane emissions capacity of UNFCCC with generative AI to increase including AI, can help expedite public policy
Advanced nuclear and fusion energy reduction target. transparency, accountability, and reporting on implementation, remove impediments, and
climate change commitments. speed the transition to a decarbonized grid.
In December 2023, we published a policy brief Advocating for waste reduction AI can enable faster decision making for power
that highlights the importance of carbon-free
In the European Union, we informed and advocated
Learnings and what’s next grid resource and transmission planning, as well
electricity, the role advanced nuclear and fusion
for a robust and coherent Eco-design for Sustainable 1 ESG reporting rules are fast evolving in many as speed permitting decisions and the grid
energy may play in a decarbonized energy future,
Products Regulation (ESPR), as well as new initiatives countries around the world. Increasingly based interconnection process for critical clean energy
and the priorities that guide our policy advocacy.
such as the European Green Claims Directive, the on a threshold of business activity, the policy assets. Moreover, AI could increasingly become
We focus on advanced nuclear and fusion energy
revision of the Waste of Electronics and Electronic scope is broadening from GHG emissions the basis of data science-led approaches for
technologies because of their potential and because
Equipment Directive, and the European Right to reporting to other environmental, social, and operating the clean energy grid of the future.
these technologies are rapidly evolving and face
Repair Directive. governance areas and the data requested is Utilities, balancing authorities, and their
a different set of regulatory considerations than
becoming more market, sector, and activity regulators will need policy means for including AI
other carbon-free technologies. Microsoft’s policy Advancing progress with AI specific. With more governments and regulators in power system management. In the year ahead,
advocacy priorities focus on advancing research,
Microsoft published Accelerating Sustainability consulting on proposed local policy, there is we will advocate and work with governments
development, and demonstration projects; enabling
with AI: A Playbook. The playbook outlines policy increased urgency for consistent rules across and partners to develop policy incentives,
safe deployment of technologies; and encouraging
principles to govern AI and align it with sustainability geographies and digital solutions to help investments, and a conducive environment
an efficient and effective regulatory process for new
outcomes. We are engaging with the European companies share data and report. to use AI for sustainability outcomes.
technologies to be deployed.
Union institutions to inform the AI Act to build
on existing and emerging sustainability policy
Employee Fostering our employee community

In 2023, local chapters around the world hosted
Employee eco-challenge
During a month-long eco-challenge, employees
Hackathon
Our 2023 Hack for Sustainability challenged over
engagement dozens of volunteer opportunities and represented
the community at numerous sustainability events,
completed nearly 93,000 actions to help build
more sustainable day-to-day habits. Through these
700 participants to create innovative AI solutions
for environmental challenges across our company
universities, and startup accelerators. The SCC actions, and the nearly 10,000 reflections that were and around the world. The scale and computational
was hands-on with projects like tree plantings, shared during the challenge, our employees worked power enabled by AI and cloud computing is
Employees play an invaluable role in our Microsoft
supporting local food projects and trash cleanups; to transform their individual behaviors to focus just beginning to identify solutions to help enrich
sustainability journey. Over the past year, our
donating time and money to local nonprofits; and more on sustainable living. These actions included biodiversity and protect ecosystems.
volunteer Sustainability Connected Community
working hard to ensure that environmental justice conducting household waste audits, completing
(SCC) expanded our mission to “make sustainability Participants submitted 142 projects that aimed
was factored into the work we do every day. additional sustainability trainings, installing low-
part of everybody’s job” at Microsoft. Through panel to achieve broader societal transformation that
flow showerheads, conserving electricity, and
discussions, employee-led initiatives, and new The SCC has a strong presence in EMEA, with supports environmental sustainability. The winning
investigating water collection systems for their
chapters, the SCC expanded opportunities to “think chapters representing the community at numerous projects this year proposed solutions for reducing
homes. Altogether, this resulted in over 1.5 million
globally and act locally.” sustainability events, universities, and startups in AI computing carbon intensity, easier carbon
pounds of carbon dioxide savings, over 304,000
Portugal and France, as well as planting trees and accounting with a new innovative methodology, and
gallons of water saved, and nearly 2,700 pounds of
growing local produce with involvement from generative AI that helps to speed the transition to
waste composted and diverted from landfills.
LinkedIn employees and local leaders. carbon-free energy.
In APAC, over 800 employees participated in
activities during Earth Month. There were more
than 20 local events across more than 10 locations,
including tree plantings, beach cleanups, electronic
waste collection, and more. Eco Talks Asia, our
speaker series, hosted sustainability leaders
throughout the year for employee learning
and inspiration.
SCC chapters in Arizona and North Carolina are
1.5M
Employee eco-challenge actions resulted in
also having a big impact through panel discussions,
local campus initiatives, fundraising activities, and
employee resource group partnerships.
1.5 million pounds of carbon dioxide savings. Microsoft’s Rohit Shetty, Datacenter Technician
Manager, India
Scaling impact Delivering insights

Sustainability is inextricably tied to the LinkedIn
Building upon the report, LinkedIn’s Economic Graph
team developed deep dives that provide additional
Green Coaches Program
A grassroots initiative led by passionate members of
through Green
insights into leading trends. In September 2023,
Learning team’s vision of creating economic our Go Green employee volunteer team mentored
the team published a report looking at green skills
opportunities for every member of the global and upskilled over 200 professionals to help grow
across the German manufacturing sector, particularly
Skilling workforce. The global transition to a green economy
requires people with critical green skills employed
around auto manufacturing, with Germany’s Ifo
Institute. An accompanying research note provides a
their careers in the green economy, expand their
networks, and connect to opportunities through
in all industries and occupations. LinkedIn’s coaching conversations. LinkedIn employees
more global view of the role green skills will play in
Economic Graph provides actionable insights also provided other employees and leaders of
accelerating the electric vehicle transition.
To transform the global economy, the sustainability about the demand and supply of talent with green environmental nonprofit organizations with general
workforce must grow quickly. Globally, green hiring skills. LinkedIn Learning also offers a growing In 2023, LinkedIn also released The Green Gender coaching on how to optimize their individual and
is outpacing overall hiring. Driven by new climate catalog of sustainability skills courses to empower Gap Report which highlights the growing gender organizational LinkedIn profiles.
policies and commitments, we expect to see millions the workforce. gap in the green skill which highlights the
of new green jobs created globally. Despite this growing gender gap in the green skills economy. Global policy recommendations for
Drawing directly from the LinkedIn Economic green skilling
increase, talent remains tight with only one in eight Findings indicate that while women are entering the
Graph, the 2023 Green Skills Report highlights
workers globally having the green skills needed to workforce at a greater rate, many are still missing Our LinkedIn team met with climate and workforce
global trends in the green economy. Given the
drive the green transition. Today, 16% of men are out on the chance to be part of the climate solution. government leaders during COP27 and COP28
scale of action needed to address the climate
part of the green talent pool, compared to only 10% And as the urgency of the climate problem increases, to push for greater investment in green jobs and
crisis, the report explores ways to help accelerate
of women.19 our planet is missing out on the full contributions green skills development. This included sharing a
green skills development. The report also includes
of a group that makes up nearly half of the global list of global policy recommendations guided by the
Microsoft and LinkedIn are taking action to leading trends in energy production, transportation,
workforce. Microsoft and LinkedIn are working to belief that green jobs, green skills, and the people
empower the workforce with the green skills and finance, and policy implications tied to labor
advance new policies and programs that close the who have them are critical to achieving global
needed to drive climate progress. We are sharing market insights.
green skills gender gap—and that accelerate the climate progress.
our research, learnings, and tools to empower and
proliferation of green skills throughout the entire
build the workforce we need. With over one billion
global workforce.
users active on LinkedIn, we have an opportunity
to provide tools and resources to both help skill the
workforce and address the gender gap.
1 in 8
Today, only 1 in 8 workers have the green skills
needed to support a green transition.
Planet Labs PBC Instituto Humboldt and Instituto Sinchi Project Drawdown CERES
Microsoft AI for Good Lab collaborates Microsoft has partnered with the Humboldt LinkedIn has partnered with Project Drawdown CERES advances leadership among companies,
with Planet to bring geospatial machine Institute and the Sinchi Institute of Colombia for five years for their climate solutions investors, and capital markets influencers to
learning capabilities to vast datasets of high- to use AI to monitor biodiversity in the subject matter expertise. Drawdown’s team drive climate solutions and policy advocacy.
resolution satellite imagery. The use cases are Amazon rainforest. Using bioacoustics helped enrich LinkedIn’s green taxonomy by LinkedIn has participated for five years in the
numerous, including deforestation monitoring recordings, camera trap images of wildlife, spotlighting emerging green technologies, CERES-organized US LEAD program (Legislature
of the Colombian Amazon, irrigation water and satellite imagery, Microsoft is building skills, occupations, and industries that can draw Education and Advocacy Days) to meet
management for agricultural lands in Northern AI models that accelerate data analysis by 10 down carbon emissions. This information helps with members and staff of the US Congress.
Kenya, and measuring the global capacity times. This technology is scalable to other shape LinkedIn’s green jobs collection and In those policy meetings, LinkedIn has had the
for wind and solar energy production on a Amazon regions, so the aspiration is for more enables LinkedIn’s Economic Graph green data opportunity to provide lawmakers with insights
quarterly basis. governmental and non-governmental entities to insights for policymakers and business leaders. on the greening of the economy and advocated
take advantage of these AI technologies. In 2023 LinkedIn launched a Sustainability for investment and policies supporting
Learn more from Planet and explore Global
Renewables Watch
Resource Hub that includes Drawdown’s growth in clean energy, green jobs, and green
Learn more about our partnership
employee functional guides for going green workforce development.
and a LinkedIn Learning course for employees
Learn more about CERES
authored by the Drawdown team. LinkedIn has
provided Drawdown with ad grants totaling
over $1 million over the past three years, which
Drawdown has used to raise awareness and
reach a large target audience for its online
resources including its Climate 101 webinars and
employee green functional guides.
Learn more about Project Drawdown

Appendix
How can
we advance
sustainability?
Appendix A 85
Appendix B 86
#sustainabilitychampions 87
Captured by:
Therese Gule
Account Technology
Strategist, Norway
Appendix A Our Reports Hub available at Microsoft.com/

transparency provides a consolidated, comprehensive
ESG materiality
Our ESG reporting describes the topics we consider
identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,”
view of our ESG reporting and data ranging from to be the most important to stakeholders when “target,” “efforts,” “goal”, “commitment”, “opportunity,”
our carbon footprint to workforce demographics to evaluating environmental, social, and governance “plan,” “may,” “should,” “will,” “would,” “will be,” “will
political donations. This Environmental Sustainability continue,” “will likely result,” and similar expressions.
How we report Report is an important part of that overall set of
issues at Microsoft. Therefore, ESG materiality in our
Forward-looking statements are based on current
reporting does not directly correspond to the concept
Reporting principles and external standards disclosures. For this and other reports, we inform our of materiality used in securities law. A listing of what expectations and assumptions that are subject to risks
disclosure strategies with careful consideration of we currently identify and categorize as our top ESG and uncertainties that may cause actual results to
Microsoft works to conduct business in ways that are
commonly used global standards. We have reported issues can be found on our website. In 2020, Microsoft differ materially. We describe risks and uncertainties
principled, transparent, and accountable. We annually
to CDP Climate Change since 2004, and to CDP conducted a materiality assessment focused on that could cause actual results and events to differ
publish this Environmental Sustainability Report to
Water Security since 2011. On climate-related issues, environmental sustainability, which can be accessed in materially in our reports filed with the Securities and
provide information on our strategy, our performance
we strive to align with the recommendations the 2020 Microsoft Sustainability Report. Exchange Commission. We undertake no obligation
and progress against our goals, and key challenges
of the Task Force on Climate-related Financial to update or revise publicly any forward-looking
and trends we see in this work. We also publish our
environmental data, which is included in the separate
Disclosures (TCFD) and in FY22 we published Governance statements, whether because of new information,
our first TCFD report. The Environmental, Social, and Public Policy future events, or otherwise.
Environmental Data Fact Sheet. We presented
greenhouse gas emissions in accordance with the Committee of Microsoft’s Board of Directors provides
Working together with stakeholders A number of our ESG goals may depend on the
GHG Protocol and management’s criteria and select oversight and guidance on Microsoft’s environmental adoption of certain behaviors and activities by
We know that the decisions we make affect our sustainability strategy and efforts. During at least
environmental metrics that both reference the third parties, including our customers and partners.
employees, customers, partners, shareholders, one meeting each year and on an as-needed
Global Reporting Initiative (GRI) Standards and are If those parties do not adopt certain behaviors or
suppliers, and communities, and we take their voices basis, our Vice Chair and President and our Chief
reported in accordance with management’s criteria activities, or invest in certain evolving technologies,
into account. Microsoft receives input from millions Sustainability Officer present to this committee
as of and for the fiscal year ended June 30, 2023 we may not be able to meet some goals. Additionally,
of people each year—from individual customers to on our overall sustainability agenda, including our
(FY23). Microsoft’s environmental data reporting we are engaged in certain projects, solutions, and
policymakers and global human rights specialists. climate-related work, and solicit high-level input on
covers global wholly owned and partially owned technologies that, should they not perform as we
We bring outside perspectives into the company new and emerging initiatives. Additional information
subsidiaries over which Microsoft has management expect, could negatively affect our ability to meet
and inform our business decisions through a on Microsoft’s corporate governance is available at
and operational control, including Microsoft owned some ESG goals on time or at all. Finally, we make
variety of feedback channels. We go beyond formal microsoft.com/investor.
and leased real estate facilities and datacenters. certain claims regarding our products and projects,
channels, proactively engaging with key stakeholders,
Environmental data reported is subject to Microsoft’s including through our funding of certain projects,
advocacy groups, industry experts, corporate social Forward-looking statements
recalculation and structural changes policy as and the ability of those products, projects, and
responsibility (CSR) rating agencies, CSR-focused This report includes estimates, projections, and other
described in our Environmental Data Fact Sheet. funding efforts to affect third parties’ sustainability
investors, and many others. We also share our “forward-looking statements” within the meaning efforts; however, there can be no guarantee that our
learnings and practices, thereby generating industry of the Private Securities Litigation Reform Act of products, projects, or funding efforts will have the
dialogue, informing public debate, and advancing 1995, section 27A of the Securities Act of 1933, and effects we anticipate or intend.
greater progress. section 21E of the Securities Exchange Act of 1934.
These forward-looking statements generally are
Appendix B 1. This value references CIF capital allocated through

calendar year 2023.
7. The Federal Energy Management program’s
wastewater map includes data on reclaimed
water available in only six states across the
14. Whitepaper: Reducing Fortnite’s Power
Consumption - Unreal Engine
2. This definition is consistent with RE100 technical US. Reclaimed Wastewater Map | Department 15. The overall manufacturing carbon footprint of
criteria as of November 2023: Dec 12 – RE100 of Energy a product is influenced by energy and other
technical criteria + appendices.pdf (there100.org) auxiliaries used in manufacturing processes,
8. Our cloud packaging targets cover packaging technology, as well as materials production.
3. The Microsoft LEED Volume Program is based for any cloud infrastructure product that is The manufacturing carbon footprint varies by
on LEED v4.0 and includes 83 prototype credits. delivered to, collected from, or moved between product configuration (such as processor, storage,
These prototype credits share the same approach Microsoft datacenters. memory). This statement is solely referring to the
or strategy across multiple projects due to reduction seen in global warming potential from
technical and managerial uniformity and have 9. Based on estimated reductions in logistic carbon energy use in manufacturing processes.
already been approved by U.S. Green Building emissions and component waste reduction
Council (USGBC), thereby reducing duplicated attributable to same unit repair from January 1 to 16. This information has been self-reported by
efforts for project teams. Our architectural December 31, 2023 across multiple regions. the organization and has not been verified
engineering (A/E) teams are also encouraged to by Microsoft.
review the complete LEED scorecard and apply for 10. End-of-life management and recycling |
non-prototype credits that are most relevant to Microsoft Legal 17. ENGIE collaborates with Microsoft and Solstice to
their specific project. accelerate access to community solar for under-
11. The Importance of Pollinators | USDA resourced communities in Illinois - ENGIE North
4. Carbon Accounting at Microsoft 12. Customers and partners can access the Emissions America (engie-na.com)
5. A Water-Smart Society is defined as a society Impact Dashboard data directly through the 18. Sampling biases shape our view of the natural
in which the value of water is recognized and Microsoft Cloud for Sustainability API (preview). world; Hughes et al., 2021
realized to ensure water security, sustainability, Accompanying the dashboard is this white paper
and resilience; all available water sources are describing what customers can do to reduce 19. The Green Gender Gap: A special edition of
managed so that water scarcity and pollution are the environmental impact of their Microsoft 365 LinkedIn’s Global Green Skills Report 2023
avoided; water and resource loops are largely cloud usage.
closed to foster a circular economy and optimal 13. Customer Replaceable Units (CRUs) are
resource efficiency; the water system is resilient components available for purchase through your
against the impact of climate and demographic Surface Commercial Authorized Device Reseller.
change; and all relevant stakeholders are engaged Components can be replaced onsite by a skilled
in guaranteeing sustainable water governance. technician following Microsoft’s Service Guide.
6. ESSD - Country-level and gridded estimates of Opening and/or repairing your device can present
wastewater production, collection, treatment and electric shock, fire, and personal injury risk and
reuse (copernicus.org) other hazards. Use caution if undertaking do-it-
yourself repairs. Device damage caused during
repair will not be covered under Microsoft’s
Hardware Warranty or protection plans.
Availability of replaceable components and service
options may vary by market and/or at initial
product launch.
Captured by: Captured by: Captured by: Captured by: Captured by: Sustainability champion: Sustainability champion:
Finnian Power Therese Gule Yasna Amas M Martin Tatar Eoin Murphy Cameron Hughes Badarul Muneer
Sustainability, to me, is I love the natural beauty As a nature lover, At Microsoft I work with The most important part Cameron has been a Badarul has led
about the responsible of the world around I care about the our MVP community of of sustainability for me trailblazer in helping countrywide
stewardship of our me. I enjoy spending legacy we leave to technology experts to is finding a balance with colleagues and sustainability
planet’s resources to time in nature by hiking, future generations. reflect our commitment progress and protecting customers understand initiatives since 2022.
preserve them for skiing, and paddling. Sustainability is the to make a positive nature. National Parks their own environmental Through these efforts,
present and future These activities bring path to this legacy, as impact around the are a great example of footprint. He fosters his team has helped
generations. I volunteer calmness and inspiration it balances economic, globe, including how to protect nature for climate discussion and to reduce single-use
in a nature reserve to my life and help environmental, and social the environment. future generations. encourages action in his plastics, onboarded a
as a nature and me to understand the aspects. Through my Outside of Microsoft, community, highlighting local recycling company
wildlife photographer. importance of protecting personal actions and my when I am in nature, that everyone has a role to collect logistics waste,
The purpose of the the environment for role at Microsoft, I have I make a conscious to play in creating a and engaged with
photos I take is to future generations. the responsibility and decision to leave no more sustainable world. the building owners
promote awareness of the great opportunity trace, respecting the to record and track
the natural biodiversity to contribute to the environment and helping waste generation.
of our lands and the achievement of our to preserve it for future
wildlife they support. sustainability goals. generations to enjoy.
We all have a role in this.
More about Microsoft’s
#sustainabilitychampions Our employees are at the core of our sustainability journey. Their passion and commitment
catalyzes progress in every part of our business and their communities around the world.
Stay up to
date on our
progress
Learn more about our sustainability journey
and sign up for news and updates here.
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Reporting on our 2023 fiscal year

Overview Microsoft sustainability Customer Global Appendix

Our approach 23 Our approach 46

Cover captured by:

Accelerating innovation planet more than the issues

23.6 million MWh 61.7 million m 3

Carbon Water Waste Ecosystems

We are committed to sharing our learnings,

Carbon Water Waste Ecosystems

Carbon Water Waste Ecosystems

Our approach continued

Our journey to Our targets Our progress

Replacing with 100/100/0 carbon-free energy 19.8 GW of carbon-free energy

Removing the rest of our emissions 5M metric tons of carbon removal

At Microsoft, we are also partnering to

Carbon Water Waste Ecosystems

Our approach continued

Carbon Table 1–Breaking down our FY23 Scope 3 emissions by source

2 Capital Goods 38.24%

Scope 2 12 End of Life of Sold Products 0.03%

Find out more in our Data Fact Sheet

Carbon Water Waste Ecosystems

Our approach continued

Carbon Water Waste Ecosystems

Improving the Datacenter efficiency

of our operations to a PUE of 1.0 as possible. This year our datacenters

Carbon Water Waste Ecosystems

Improving the measurement and efficiency of our operations continued

Carbon Water Waste Ecosystems

Improving the measurement and efficiency of our operations continued

Carbon Water Waste Ecosystems

Improving the measurement and efficiency of our operations continued

Reducing the impact of our Greenhouse Gas Protocol

Carbon Water Waste Ecosystems

Building markets Building markets

and driving circularity

Carbon Water Waste Ecosystems

Building markets and driving progress continued

Advancing carbon dioxide removal (CDR) Progressing towards 2030

These multi-year agreements draw on our

As we fill our balanced portfolio of greater than Breakdown 3,549,242 1,465,777

of carbon removal in support of our carbon

Carbon Water Waste Ecosystems

Building markets and driving progress continued

We support carbon-free electricity infrastructure

Carbon Water Waste Ecosystems

Building markets and driving progress continued

Advocating for clean energy infrastructure

Investing in sustainable aviation fuel

Carbon Water Waste Ecosystems

Learnings Growing the supply

Carbon Water Waste Ecosystems

Carbon Water Waste Ecosystems

Our approach continued

Committing to improving water Keep community needs and impact

Carbon Water Waste Ecosystems

Our approach continued

Our journey to Our targets Our progress

Reducing our water intensity Improving water efficiency