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Feb 24, 2020

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This Is Uncomfortable
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Jan 17, 2020

Microsoft’s billion-dollar investment in carbon removal

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The company's chief environmental officer says that every tech company is going to be expected to pursue climate change solutions.

A lot of tech companies have pledged that their operations are — or will — become carbon neutral. But this week, Microsoft announced plans to become carbon negative in the next 10 years. That means it will invest $1 billion in technologies to remove carbon from the atmosphere, in addition to using more renewable energy or off-setting the emissions it creates. 

In fact, Microsoft announced that by 2050 it wants to remove the equivalent of all the carbon that the company has ever emitted in its 44-year existence. Ikea is the only other major company that’s made a similar promise, which, let’s be honest, sounds expensive. 

I spoke with Lucas Joppa, the chief environmental officer at Microsoft, and  I asked him if this investment could hurt the business. The following is an edited transcript of our conversation.

Lucas Joppa: I don’t think that this will ultimately set us back as a business. I actually think that companies that do good do well. We’re making investments, of course, because we believe the best available science says that we must, but also because of incredible customer demand all around the world for digital solutions to help them better understand, monitor and optimize for their own carbon footprints. We’re aware, though, that not every company has the resources that Microsoft does, not every company is able to invest in the ways that we are. That’s why we’re also including in our commitments work to help lower the cost curve for others who might want to follow down this same path.

Molly Wood: Let’s talk about the investment part of this. You’ve pledged to invest $1 billion and also to pivot efforts in the direction of removing carbon, and technologies that can create resilient and sustainability, but also literally remove carbon. I wonder what some of those technologies are? Have you identified investment opportunities already?

Joppa: I think first and foremost, evolution has already provided some of the most powerful removal technologies of all through processes like photosynthesis. Some of the work will be in what’s called nature-based solutions through forestation, reforestation, soil carbon sequestration. But also, we’ll be looking at negative emission technologies like direct air capture, carbon capture and storage, bioenergy. What we’re really motivated to do is to ensure that the capital that we put out is as additional as possible.

Wood: So many companies are announcing sustainability initiatives and carbon-neutral initiatives, and it’s getting hard to parse who is doing what. How do we know, either in the business community or as consumers, that this isn’t greenwashing?

Joppa: I think it requires a lot of work on the side of corporations to be as transparent and as literal as possible. There’s a reason that we’re using the term “carbon negative,” because what we are saying is we are going to go below net zero. I think the best we can do is just to be clear-eyed and cold-hearted accountants, and that we shouldn’t avoid the fact that carbon math requires some math. We’re all going to have to start to better understand it if we’re going to be able to understand in parse through different corporate commitments.

Wood: Let’s also talk about incentives. Is this becoming a move like this on some level for every business? We’ve seen institutional investor BlackRock say it’s going to require its companies to have sustainability plans; Jet Blue is going carbon neutral and citing flight shaming as part of the reason. I wonder if some of this is becoming a business imperative, whether it’s to get ahead of regulation or even public sentiment.

Joppa: Absolutely. I think it’s surprising that businesses can operate today without meaningful, incredible sustainability plans. I do not think there’s a significant future where businesses will be able to succeed without having plans and being able to show meaningful progress. I think the BlackRock letter was a nice example, but that’s just one of an incredible number of market signals that are being sent from both consumers, customers, regulators, employees and more.

Wood: In the blog post announcing this, you said climate needs to become the world’s next moonshot. That’s a phrase that has bounced around the tech industry, but also it’s an industry that has promised to solve big problems. Should the rest of the industry be following this example?

Joppa: I think the rest of the industry needs to do what everybody needs to do, which is to look at climate and sustainability as what it is, which is the largest issue, the largest, most complex challenge that our species has ever faced, to be motivated by that, and then to look at that issue and the potential solutions through the lens of each organization’s core corporate competency. If you’re a technology company, I believe that you should be bringing technology solutions to the market. That does not mean that technology solutions are the silver bullet. It just means that whatever you as an organization are good at, that’s what you need to be bringing. We need everybody to be bringing their expertise to this party, and the urgency has never been greater.

Wood: How about hiring? In your blog post, you cite not just consumer demand, but also employee demand. Does this have the added benefit of helping you attract and retain talent for whom this is a big concern?

Joppa: Most definitely. You look at any poll, and the demographic that will be entering the workforce today and in the next five to 10 years moving forward, this is the No. 1 issue they care about. If you’re a technology company, like Microsoft is, then you’re probably motivated by solving big problems with scalable solutions. If that’s your M.O., then you’ve got to have climate and sustainability squarely within your focus. Your employees, the more that you do that, the more and the better the employee base that you’re going to be able to bring in — it’s just going to be an expectation, and rightfully so.

Wood: Just from a business perspective, we’ve seen Microsoft employees already ask the company not to do business to help, let’s say, improve the efficiency of oil and gas companies. Microsoft has a seven-year deal with Chevron. Is there some possibility that the aggressiveness in this arena will make for some awkward dance partners?

Joppa: I don’t know about awkward. I think that these are conversations that need to be had, and we are committing as part of our overall announcement to include conversations about and partnerships on sustainability and carbon reduction removal with all of our enterprise customers and major suppliers, market sector independent. If you take a scientific or a scientist’s view of the problem, you leave a lot of the passion and politics out of it and you just focus on the job that needs to get done. If you believe, like we do, that this problem is one that’s going to require solutions from everybody, from every organization, then it would seem strange to be turning your back on any particular sector or customer. That said, of course, these conversations aren’t always easy, aren’t always straightforward, but I think that as long as you just focus on the problem at hand, that needs to be solved. We’ve always appreciated a partnership model at Microsoft, and I don’t see that changing going forward with any of our existing or future customers.

Amazon is another tech giant whose employees have previously protested to demand that leaders take action on climate change in Seattle on Sep. 20, 2019. (Jason Redmond/AFP via Getty Images)

Related links: More insight from Molly Wood

This week’s announcement really is significant, according to the experts we spoke to on background about the move. But a little more on the strange dance partners problem. Microsoft employees have protested the company’s work with oil and gas companies, and also how Microsoft has occasionally donated money to politicians who deny climate change.

Microsoft’s announcement is probably only going to increase scrutiny of Amazon, which has been slow to jump on the renewable bandwagon until recently. Earlier this month, a group called Amazon Employees for Climate Justice said the company was trying to suppress its public efforts to hold the company accountable on climate issues.

In our coverage this fall on climate adaptation and Big Tech’s role in helping to address the problem, we detailed what the major companies in the Silicon Valley are doing around renewable energy and sustainability.

The team

Molly Wood Host
Jody Becker Interim Senior Producer
Stephanie Hughes Producer

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