2024 Environmental Sustainability Report

2024 EnvironmentalSustainability Report Microsoft sustainability Appendix Overview Globalsustainability Customersustainability Reporting disclosure A key principle of our workis transparency. This report,published annually, includes ourstrategy, progress against ourgoals, and key challenges andtrends we see in this work. We alsopublish our environmental data,which is included in the separateEnvironmental Data Fact Sheet.Deloitte & Touche LLP performeda review relating to specifiedinformation within Section 1 of theEnvironmental Data Fact Sheet. $761M 5M 18.5K 61M Cover capturedby:Finnian PowerRegional CE Program Manager,Ireland metric tons of carbon removalcontracted in FY23 allocated towards climatetechnologies through ourClimate Innovation Fund (CIF)1 cubic meters of waterreplenishment projectscontracted by end of FY23 metric tons of waste divertedfrom landfills and incinerators Read about how we report inAppendix A. Overview Reviewing our2023 progressand learnings Our employees are at the core of our sustainabilityjourney. Their passion and commitment catalyzesprogress in every part of our business and theircommunities around the world. Images taken by employees are featured throughoutthe 2024 Environmental Sustainability Report. Captured by:Erika BashamDirector of SustainabilityProduct Strategy,United States Foreword At the same time, there are two areas where we’renot yet on track, and in each of these we areintensively engaged in work to identify and pursueadditional breakthroughs. These are: “There is no issue today thatconnects everyone on theplanet more than the issuesaround climate change.” Accelerating innovationand partnership for peopleand the planet Reducing our Scope 3, or indirect, emissions. Reducing water use and replenishing more waterthan we consume in our datacenter operations. At the end of last year, the world met in Dubai atCOP28 to assess global sustainability progress.The results were sobering. The world is not ontrack to meet critical climate goals, and we seemany of the world’s challenges reflected in ourown situation. During the past four years, we haveovercome multiple bottlenecks and have acceleratedprogress in meaningful ways. As we report here, weare on track in several areas. But not in every area.We therefore are mobilizing to accelerate progress inareas where we’re not yet on track. Even amid the challenges, we remain optimistic.We’re encouraged by ongoing progress across ourcampuses and datacenters, and throughout ourvalue chain. Even more, we’re inspired by the scoresof executives and employees across Microsoft whoare rolling up their sleeves and identifying new andinnovative steps that are helping us to close criticalgaps. We all recognize the same thing: there is noissue today that connects everyone on the planetmore than the issues around climate change. We allneed to succeed together. Four years ago, Microsoft committed that by2030 we would become carbon negative, waterpositive, zero waste, and protect more land thanwe use. Since that announcement, we have seenmajor changes both in the technology sector andin our understanding of what it will take to meetour climate goals. New technologies, includinggenerative AI, hold promise for new innovations thatcan help address the climate crisis. At the same time,the infrastructure and electricity needed for thesetechnologies create new challenges for meetingsustainability commitments across the tech sector.As we take stock as a company in 2024, we remainresolute in our commitment to meet our climategoals and to empower others with the technologyneeded to build a more sustainable future. In four areas we are on track, and in each of thesewe see progress that has the potential to haveglobal impact beyond our own sustainability work.These are: Carbon negative Brad SmithVice Chair and President Melanie NakagawaChief Sustainability Officer Our carbon negative commitment includesthree primary areas: reducing carbon emissions,increasing use of carbon-free electricity, andcarbon removal. We made meaningful progresson carbon-free electricity and carbon removal inFY23. Microsoft has taken a first-mover approach tosupportingcarbon-free electricityinfrastructure,making long-term investments to bring more carbon-free electricity onto the grids where we operate. Reducing our direct operational emissions(Scope 1 and 2). Accelerating carbon removal.Designing for circularity to minimize waste andreusing cloud hardware.Improving biodiversity and protecting more landthan we use. Forewordcontinued In 2023, we increased our contracted portfolio ofrenewable energy assets to more than 19.8 gigawatts(GW), including projects in 21 countries. In FY23,we also contracted 5,015,019 metric tons ofcarbonremovalto be retired over the next 15 years. We arecontinuing to build a portfolio of projects, balancedacross low, medium, and high durability solutions. Leaders in every area of the company have steppedup to spons