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Microsoft unveils new tool for Scope 3 emissions

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Microsoft’s (NMS:MSFT) Cloud for Sustainability solution has expanded its tracking and measurement capabilities to include Scope 3 emissions. While the tool could be beneficial, its important to note that cloud computing can have a significant environmental impact due to its high electricity consumption.

  • Microsoft’s Cloud for Sustainability now offers the tracking of more categories of Scope 3 emissions.
  • Several tech giants are developing capabilities to help companies accelerate their sustainability progress.
  • Cloud computing itself needs to reduce its carbon footprint, which is larger than the airline industry.

Microsoft is expanding the features available on its emissions tracking and sustainability measurement tool. Cloud for sustainability now allows users to track eight of the 15 Scope 3 categories, as defined by the Greenhouse Gas (GHG) Protocol.

Enhancements to Cloud for Sustainability enable value chain tracking

Microsoft Sustainability Manager, a part of Cloud for Sustainability, helps users track, store and report their Scope 1 and 2 emissions. It is now extending its capabilities beyond the enterprise, enabling companies to do the same with Scope 3 emissions.

The solution provides previously built calculation methodologies for more than half of the 15 categories that make up Scope 3 emissions. The methodology for Scope 3 accounting used is based on the guidance from GHG Protocol, a standard setting body that establishes frameworks to measure and manage GHG emissions.

By increaing capabilities to calculate three new Scope 3 category emissions the solution now covers eight of the 15 categories defined by the GHG protocol. 

Cloud-based sustainability solutions are on the rise

Microsoft is one of several companies offering cloud-based sustainability tracking solutions. Alphabet (NMS:GOOGL), Salesforce (NYQ:CRM) and Amazon (NMS:AMZN) have all announced their own carbon and sustainability solutions. The one thing in common between all these solutions is that they are cloud-based, meaning they are hosted on servers in data centres.

Data centres are much more than just large buildings that house computers and servers. They involve complex wiring and cabling to connect the hardware to power and communication sources. Power, light and heating, ventilation and cooling (HVAC) connections are also necessary to run a data centre.

The data transmission networks that serve data centres are also an integral part of its value chain. What all this adds up to is a giant carbon footprint for the data centre industry. The IEA estimates that data centres and transmission networks are responsible for 1% of energy-related GHG emissions.

Hefty carbon footprint makes cloud computing worse than airlines

Cloud computing is estimated to have a larger carbon footprint that the airline industry, according to the Massachusetts Institute of Technology. Based on IEA estimates, global data centre electricity amounted to 220-320 terawatt hours (TWh) in 2021, or 0.9 – 1.3% of global final electricity demand.

Data transmission networks and heavy users, like crypto miners, add to this total. Adding a further 100-140 TWh from crypto mining use, and another 260-340 TWh used by data transmission networks, equals  2.4% to 3.35% of global final electricity demand that can be attributed to data centre use and operations.

The high electricity consumption highlights the need to decarbonise the cloud computing sector. To their credit, IEA analysis shows that tech firms have invested heavily in renewable energy projects.

As of September 2022, Amazon, Microsoft, Meta and Google were the four largest purchasers of corporate renewable energy PPAs, equal to over 38 GW. As cloud computing helps customers in their net zero efforts, it also needs to reduce its own carbon footprint.

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