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Sustainability outcomes and benefits for business

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Though the impact and benefits of the cloud have been traditionally measured with financial and efficiency metrics, it's become more common for customers to seek to understand how the cloud can help them to achieve their sustainability and environmental goals. Cloud computing can support your organization to reduce carbon emissions, use resources more efficiently, and lessen your environmental footprint.

Actively working toward an increased sustainability can help increase your revenue, reduce the operating costs, and improve your brand trust. Driving sustainability in your organization have several benefits:

  • Track and control carbon emissions: Use the emissions impact dashboard to track carbon emissions. Reveal insights that can justify a data center migration. Use the Azure Migration and Modernization Program to get expert help needed to set up the cloud environments.
  • Migrate to reduce the carbon footprint: Migrating to the cloud can be up to 98% more carbon efficient. Additionally, use the Azure Well-Architected Framework Sustainability workload guidance to further enhance your workloads and reduce the environmental footprint.
  • Drive sustainable innovation in the cloud: Meet customer demands for clean energy solutions and sustainable products.

Microsoft has been leading in many of these areas. The company has been operating as carbon-neutral since 2012 and has made a commitment to be carbon-negative by 2030. The carbon benefits of cloud computing, a study on the Microsoft cloud in partnership with WSP, supports research on how moving on-premises datacenters to the Microsoft cloud can significantly reduce carbon footprints.

Bühler Group's's IoT platform, known as Bühler Insights and powered by Azure IoT Hub, generates vital data so customers can monitor machine performance and generate accurate records for every product batch, helping food producers optimize safety, sustainability, and transparency across the supply chain.

Emerging software design principles

More opportunities have arisen recently to design software that is more sustainable. Green Software is an emerging discipline with principles, patterns, philosophies, practices, and competencies to define, develop and run sustainable software applications. The sooner this discipline is adopted into your sustainability journey, the better, as it will help to reduce the carbon emissions consumed by applications.

Read more about building Sustainable workloads on Azure in the Azure Well-Architected Framework guidance.

The Microsoft sustainability journey

The Microsoft journey started over a decade ago when the company started to apply new business practices and adopt cloud technology. We lowered our carbon emissions by 30 percent in 2009. Since then, Microsoft has made large strides forward by investing in reducing the company's carbon footprint further. Microsoft has focused on these four areas:

  • Carbon: Cutting energy consumption across corporate offices, charging carbon tax to business divisions, and using cloud-powered technology to lower emissions.
  • Ecosystem: Making a commitment to green datacenters and purchasing of 1.1 billion kilowatt-hours of green energy.
  • Water: Reducing use intensity and investing in technology for managing water.
  • Waste: Practicing responsible sourcing, recycling, and disposal; using software and technology to make buildings more efficient.

Additionally, there are four main drivers contributing to a lowered energy and carbon footprint of the Microsoft Cloud:

  • IT operational efficiency, IT equipment efficiency, and datacenter infrastructure efficiency: reduce the energy required to deliver the services.
  • Purchase of new renewable electricity: will power 100 percent of electricity consumed in Microsoft datacenters, buildings, and campuses by 2025.

Read more about how Microsoft's commitment to a planet-sized challenge has helped us plan and achieve sustainability goals.

Additionally, read how Microsoft measures datacenter water and energy use to improve Azure Cloud sustainability.

Building a sustainability strategy

Sustainability continues to gain importance as a performance indicator for organizations. As the sustainability transformation is making its mark on companies across industries, adding pressure from new types of stakeholders and challenging existing profit pools while creating opportunities to open new ones, companies are increasingly forced to respond effectively with new types of solutions and tech-enabled approaches.

This transformation is good for business. Research from multiple sources indicates that sustainability front runners have a lower cost-of-capital, deliver superior equity market returns, get easier access to new markets by creating new types of products and services, and/or are better at managing risk and ensuring more resilient operations.

Read about the Sustainability Executive Playbook

Common considerations for building a sustainability strategy could include:

  • Developing new ways of working to increase productivity
  • Migrating resources to a more carbon efficient infrastructure
  • Net Zero commitments
  • Improving emissions recording
  • Increased Operational efficiencies
  • Improving societal outcomes by co-developing with partners

Build green teams

Initiate the idea of building "green teams" that can have different sustainability metrics depending on the served domain, not dependent on the central sustainability team guidance but contributing to the overall green targets of the company.

Goals and metrics for teams owning sustainability

At Microsoft, we have a dedicated sustainability science team whose mission is to ensure that our sustainability work is grounded in the best available science. This drives our work in sustainability, from our climate commitments to partnering with our customers and partners on codesigning new solutions.

Establishing goals and metrics for teams owning sustainability in your organization is essential. Metrics can include greenhouse gas emissions, carbon footprint data, water use, and energy consumption.

The ultimate responsibility for measuring and owning these goals rests with the sustainability team, who aligns with the company's sustainability strategy set by the board.

Sustainability for your company's brand

There's a demand that customers, their executives and stakeholders, and their investors provide greater transparency into the environmental impact for the company from an operational point of view. Proactively working toward sustainability helps you establish a healthy brand for your company.

A sustainable business model can improve reputation, build trust and attract new talent/partners/investors. You can also see the benefits of sustainability as part of your business signature, combining your sustainability exercises with the capability to communicate the reasoning behind your green journey further.

Sustainability is critical to ensure long-term success as a player in the dynamic business space. Transforming the company towards a green model can also enable people's intrinsic motivation and attract new talent with an active interest in sustainability in the end.

Sustainability is an approach beyond a marketing play, with a conscious business purpose that can be part of a customer's brand identity. See Improve customer experience and engagement in the Cloud Adoption Framework.

  • Add sustainability and environmental responsibility to the mission statement, ensuring that brand value alignment with the business activities and practices.
  • Additionally, you should evaluate the end-to-end supply chain to ensure Scope 3 is also measured.
  • Ensure transparency on your commitments and progress through publicly exposing annual sustainability reports. Read more in Microsoft's 2021 Environmental Sustainability Report.
  • Be consistent in the communication of promoting your green efforts, thus ensuring maintaining consistent brand integrity.

Regulatory compliance

Customers are responsible for ensuring they're up to date with regulatory compliance regulations across their industry. Additionally, consider how government regulations or policies for your region might influence your organization's motivations for migrating to the cloud.

A few governmental sustainability goals include:

  • The UK Government targets bringing all greenhouse gas emissions to net zero by 2050.
  • The US Government target to achieve net zero by 2050.
  • A European Climate Law with a 55% reduction target in greenhouse emissions by 2030 and the European Union target to achieve net zero by 2050.

Understanding your current emissions

As defined by the Greenhouse Gas (GHG) Protocol, the operational boundaries of a carbon emissions inventory are broken down into three "scopes" (both direct and indirect) of emissions data, each further broken down into distinct emission sources:

  • Scope 1: Emissions that your organization produces directly (such as using carbon-based fuels).
  • Scope 2: Emissions that your organization incurs indirectly through purchasing electricity, heat, or steam.
  • Scope 3: Emissions that your organization incurs indirectly beyond Scope 2 emissions (for example, emissions related to your supply chain, waste disposal, business travel, and employee commuting).

Your sustainability journey starts with working towards understanding the factors contributing to the three scopes, followed by measuring and tracking the organization's progress with each category.

Sustainability tools and resources

To help you build your strategy Microsoft has a range of tooling and resources available.

Microsoft Cloud for Sustainability

Microsoft Cloud for Sustainability empowers organizations to accelerate sustainability progress and business growth by bringing together a set of Environmental, Social, and Governance (ESG) capabilities across the Microsoft cloud portfolio plus solutions from our global ecosystem of partners.

Microsoft Sustainability Manager

The Microsoft Sustainability Manager is an extensible solution that unifies data intelligence and provides comprehensive, integrated, and automated sustainability management for organizations at any stage of their sustainability journey. It automates manual processes, enabling organizations to more efficiently record, report, and reduce their emissions.

Microsoft Sustainability Manager covers data input from sources beyond just Azure workloads. For example, you can connect to AWS, GCP, SAP, and more.

Azure carbon optimization

Use Azure carbon optimization to measure and minimize the carbon impact of your Azure resources. With Carbon optimization, you can find opportunities to optimize resource utilization to lower carbon emissions and costs, track and analyze emissions associated with Azure resources and subscriptions, and access carbon data and insights through APIs and exports.

Carbon optimization provides emission data for all Azure resource types, based on billing and usage. The emissions calculation adopts the same methodology as the Emissions Impact Dashboard and the Cloud for Sustainability API, ensuring consistency, transparency, and easy comparison of emissions data across Azure.

This capability is readily available for you in the Azure portal, and you can start using it today.

Cloud migration

Many businesses understand that migrating workloads to the cloud can cut energy consumption and costs and reduce the physical footprints of their datacenters. Transitioning workloads to Microsoft Azure can produce up to 98 percent more carbon efficiency and up to 93 percent more energy efficiency than on-premises options, depending on specific server usage, renewable energy purchases, and other factors.

Use the Azure Migration and Modernization Program to apply best practices based on the proven Microsoft Cloud Adoption Framework for Azure and Well-Architected Framework at every stage of your cloud adoption journey.

Migrate and modernize your apps, data, and infrastructure using proven cloud migration tools and patterns.

Emissions savings estimator for Microsoft Cloud

The Emissions savings estimator for Microsoft Cloud enables you to define your on-premises infrastructure workloads and then uses the information to report your current on-premises footprint and comparable Azure footprint.

Using the emissions savings estimator will help you understand the emissions-related usage of Microsoft Cloud services and estimate how much you could save by migrating to Azure.

Emissions Impact Dashboard

Once you migrate or create resources within Microsoft Azure, you'll need a reliable way of monitoring those emissions as well. The Emissions Impact Dashboard provides transparency into greenhouse gas emissions associated with using Microsoft cloud services and enables a better understanding of the root causes of emissions changes. Organizations can measure the impact of Microsoft cloud usage on their carbon footprint, and they can drill down into emissions by month, service, and datacenter region.

Microsoft’s emissions reports are determined via a methodology that was validated by Stanford University in 2018, which aligns to ISO standards for measuring greenhouse gas emissions. These calculations are inclusive of Microsoft’s scopes 1, 2, and 3, which means that they include emissions from Microsoft’s extended network of vendors and suppliers. Reports reflect Microsoft’s investments in renewables and the fuel energy mix in the regions where your computing takes place alongside other factors.

Examples of sustainability outcomes

Focusing on sustainability and protecting limited environmental resources is key to our future, and this focus also benefits business. Today, companies can draw from a broad range of assets and resources that can help them to expand into new geographic areas and develop innovative resource management solutions.

AGL, one of Australia's leading integrated energy companies, built a solution on Azure that remotely manages networked solar batteries. Learn about how the company is growing an innovative energy partnership across Australia to help local customers give back to the grid.

Bee'ah is a sustainability pioneer in the Middle East that believes in technology and sustainability creating solutions for the future. Their services include waste management, environmental consulting, renewable energy, and sustainable transportation. Azure has supported the company to launch the first AI platform to digitize all operations and services. Read more about how the cloud drives sustainable management and digital innovation throughout the company's sustainability journey.

These customer stories demonstrate how prioritizing sustainability and environmental solutions can help organizations to create new business opportunities.

Next steps

An intentional approach can help organizations to navigate their sustainability journey. These five steps can influence outcomes for your company:

Step 1: Record and understand your company's current carbon emissions. Start by categorizing your emissions, which will help you to list of areas on which to focus.

Step 2: Evaluate whether your vendors, partners, and providers are taking steps to reduce their emissions and if these steps align with yours.

Step 3: Create an incentive for teams to reduce carbon emissions. The Microsoft carbon fee: theory and practice guide can help your organization to drive alignment and accountability across your teams.

Step 4: Seek out teams in your business to enlist their support and generate ideas for areas for improvement. Build an innovation culture where individuals are participants with a sense of ownership.

Step 5: Assess ways to incorporate Green Software Development principles into your company's sustainability goals. How can you work towards designing sustainable software applications that can be  reused and has extended  longevity of use and minimal computational and memory resource requirements?

Learn more about how your organization can measure and reach sustainability outcomes with the cloud.

Reach outcomes