In 2012, Microsoft made a commitment to going carbon-neutral, a designation that means all of the company’s energy use will either be attained through renewable sources or be offset with purchases of carbon credits. Microsoft is increasingly relying on the latter, and Greenpeace isn’t impressed.
The climate activism organization faulted Microsoft for its reliance on carbon offsets in its latest report on energy use in cloud computing. Greenpeace graded cloud-tech companies in four categories: energy transparency, renewable energy commitment, energy efficiency, and renewable energy deployment and advocacy. Microsoft received a C grade in each category.
“Microsoft’s strategy for reaching its ‘carbon neutral’ commitment remains primarily reliant on the purchase of unbundled renewable energy credits and carbon offsets, which have little if any impact on the energy powering its data centers,” the report said.
Microsoft’s sustainability plan hinges on what essentially is a company-wide carbon tax. Each division of the company is required to pay for its CO2 emissions, the funds from which go toward renewable-energy purchases.
Some of those purchases were lauded by Greenpeace, particularly the company’s purchase of 285 megawatts of wind energy generated on the same power grid as data centers in Texas and Illinois. Siting of renewable resources is an important metric in Greenpeace’s grades. Since energy produced by renewable sources such as solar or wind is funneled into local energy grids, only data centers within that system would benefit directly from those sources. Otherwise, purchasing energy credits is largely symbolic, and that’s what Greenpeace said Microsoft is relying on too heavily.
Consider Apple’s approach, which warranted straight A’s from Greenpeace. Apple coupled each of the three new data centers it announced last year with a local renewable energy source. It has circumvented coal-based utilities in the Eastern U.S., opting instead to build solar installations on its own dime. Here in the Northwest, Apple invested in a small hydropower project to supply electricity to an Oregon data center.
The difference in Apple’s and Microsoft’s approaches to sustainable energy highlight some inefficiencies in this nascent stage of corporate environmentalism. Companies with enough money are still able to buy their way to a carbon-neutral label, and that’s the tactic most companies take. Investments like Apple’s are capital-intensive and require careful siting of data centers, but look the same on paper as a company using coal-fired energy but purchasing renewable credits elsewhere to level its carbon balance sheet.
“You see a lot of temptation to do something that is relatively easy,” said Gary Cook, lead author of the report. “You write a check, you check the box, and you call it done.”
Greenpeace reports on cloud energy use in large part because it’s one of the fastest-growing sectors of the tech economy. The organization cites that growth as a major reason behind Microsoft’s over-reliance on carbon credits. Microsoft has 19 data centers that host Azure and the company’s web-based products, and the company’s cloud-first direction will increase its demand for data capacity and energy in the coming years. Thus, Greenpeace isn’t currently optimistic Redmond can clean up its act any time soon.
“Microsoft really needs to decide which way it wants to go,” Cook said. “(Since 2012) they’ve had two significant purchases of renewable energy, but they are also, like every leader in the cloud computing sector, are growing like crazy. The question is whether they’ll grow in the way that Apple has … or if it will be more business as usual where they pick off a couple of impactful projects.”