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Whilst there is an ongoing debate about the role of carbon offsetting in the drive towards net zero, we believe that there is a valid role to play. It becomes increasingly difficult for large organisations to address the long tail of carbon emissions associated with their operations once they delve into their scope 3 supply chains. Even the best resourced and well-motivated leaders in the field of corporate sustainability have accepted that there is a balance to be struck once all efforts to reduce direct emissions have been implemented.

The diagram below illustrates this for Microsoft – which has itself committed to a net zero pathway.

When publishing its carbon pledge in January 2020, Microsoft noted the critical importance of addressing scope three emissions, saying that the company expected to emit 16 million metric tons of carbon during 2020. Of this total, about 100,000 are scope 1 emissions and about 4 million are scope 2 emissions. The remaining 12 million tons all fall into scope 3. Given the wide range of scope 3 activities, this higher percentage of the total is probably typical for most organisations.

This is because of the life cycle impacts as explained below:

  • Scope 1 emissions are the direct emissions that your activities create – like the exhaust from the car you drive, or for a business, the trucks it drives to transport its products from one place to another or the generators or heating plant it might run.
  • Scope 2 emissions are indirect emissions that come from the production of the electricity or heat you use, like the traditional energy sources that light up your home or power the buildings owned by a business.
  • Scope 3 emissions are the indirect emissions that come from all the other activities in which you’re engaged, including the emissions associated with producing the food you eat, or manufacturing the products that you buy. For a business, these emission sources can be extensive, and must be accounted for across its entire supply chain, the materials in its buildings, the business travel of its employees, and the full life cycle of its products, including the electricity customers may consume when using the product. Given this broad range, a company’s scope 3 emissions are often far larger than its scope 1 and 2 emissions put together.

Microsoft sees itself as an organisation with the capability and resources to make significant carbon reduction pledges, but also that it has a responsibility to adopt a leading role.

The company’s aggressive targets state that by 2030 Microsoft will remove more carbon than it emits. Moreover, it is targeting to remove by 2050, all the carbon emitted either directly or by electrical consumption (Scope 1 and 2 together) since it was founded in 1975. This will involve a portfolio of negative emission technologies (NET) potentially including afforestation and reforestation, soil carbon sequestration, bioenergy with carbon capture and storage (BECCs), and direct air capture (DAC).

We welcome these increasingly ambitious pledges among the wealthiest and most influential technology companies on the planet. Where competition is generated between such companies – it is the planet that benefits. This ambition deserves to be rewarded by customers making discerning choices to support these businesses. It is only by implementing such significant transformational changes that there is any chance of stabilising carbon in the earth’s atmosphere.

>>> Microsoft’s full announcement can be watched here.


Article by: David McDonald

As seen in Issue 9 of The Bottom Line