What Corporate Leadership on Fighting Climate Change Really Looks Like

Microsoft’s pledge to be retroactively carbon negative has set a new standard.

In the last few weeks, a number of major companies have made commitments to address the fact that human activity is causing the planet’s rapid overheating. Blackrock announced a new focus on climate change in its investment strategy, Starbucks has said it will aim to become resource positive, BP pledged to be net-zero by 2050, and Delta Airlines announced that the airline will go carbon-neutral beginning next month. And earlier this week, Jeff Bezos pledged $10 billion of his personal wealth to fight climate change.

I’m thrilled by this growing focus on carbon goal-setting, but I can’t help but wonder: What gives? Is there an epidemic of “climate woke-ness” sweeping the world? If so, what triggered it? And why now? Was it the bushfires in Australia and the estimated one billion animals that died? Or perhaps the dawning recognition that we are entering what will be the most consequential decade of our existence on this planet?

The urgency of climate action grows with each passing day. According to climateclock.net, based on current emissions, we have a remaining carbon budget of about 12 years. With a rapidly shrinking window to decarbonize, we have to take aggressive action now to buy us a little more time—a 45 percent reduction in emissions by 2030 and net-zero by 2050 according to the United Nations Development Programme.

I usually dig into these announcements with a healthy dose of skepticism—to gauge if they are serious about battling climate change or if this is just another wave of “greenwashing.” But as the new corporate plans keep coming, I find myself most impressed with Microsoft’s announcement in January that it will be carbon negative by 2030, and two characteristics in particular: its courage and its humility.

The courage in Microsoft’s announcement stems in part from the boldness of its goals. For example, while most companies tend to report Scope 1 & 2 emissions, and some Scope 3 emissions, Microsoft has chosen to address all their Scope 3 emissions, which can be anywhere from 50 to 85 percent of total emissions. Microsoft estimates Scope 3 is about three quarter of their total emissions. These scopes are a “term of art” and roughly break down as follows: Scope 1 emissions are from owned or operated assets; Scope 2 are from purchased energy; and Scope 3 is everything else. In deciding to include all their Scope 3 emissions, Microsoft is reaching out to engage partners beyond their sphere of control, to their sphere of influence, including suppliers, employees, and customers.

Also, their goal is to be carbon negative. In other words, they will remove more carbon from the atmosphere than they emit. This is not by buying offsets—like funding cleaner cookstoves in Rwanda—to avoid future emissions, but making actual reductions. Additionally, Microsoft has pledged to invest $1B in carbon reduction and removal technology over the next four years. Beyond the carbon-negative goal, their eventual plan is to repay the carbon debt incurred through their entire existence.The goal is to be carbon negative by 2030, far ahead of global guidelines, and repay their historical carbon debt by 2050.

The boldness of these goals is undergirded by a fundamental clarity about what is at stake. In an interview with CNBC’s Mad Money host Jim Cramer, Microsoft’s CEO, Satya Nadella, said: “The economy that we all enjoy, or the capitalist system we all enjoy, I think will fundamentally be in jeopardy, if the planet which is THE resource, the factor of production that has fueled all of our capitalist society will be in danger. So to me, that is the existential priority.”

The courage of Microsoft’s convictions will be a welcome tailwind on a difficult journey.

Like all good goals, there were plenty of meaty details in Microsoft’s announcement e.g. electrification of their campus fleet, shifting to 100 percent renewable energy. What stood out for me was a distinct disposition of humility:

While we at Microsoft have worked hard to be “carbon neutral” since 2012, our recent work has led us to conclude that this is an area where we’re far better served by humility than pride. And we believe this is true not only for ourselves, but for every business and organization on the planet… It won’t be easy for Microsoft to become carbon negative by 2030. But we believe it’s the right goal.

 I find this humility incredibly seductive, and it only adds to the integrity of the announcement.

Yet the only area I see where Microsoft could do better is in its providing cloud services to customers in the oil & gas industry. Many have cited this as a reason to question the authenticity of Microsoft’s commitment to its carbon footprint. This criticism is not unreasonable given that the emissions for Shell and Chevron, just two of Microsoft’s customers, are over 1,100 million metric tons, over 70 times Microsoft’s estimated emissions of 16 million metric tons.

Here lies an opportunity for more leadership for Microsoft—collaborative leadership as opposed to competitive leadership. Can it collaborate with its competitors, like Amazon Web Services and Google Cloud, to work with their oil and gas customers to begin the withdrawal from supporting further fossil fuel extraction? After all, it is not as if this issue will simply go away, nor is it an issue only for Microsoft.

Lastly, I would urge grace, especially, from those of us who have grown understandably impatient with the progress to date. Some organizations now seem to be stepping forward with bold commitments. A difficult journey lies ahead. Despite our best intentions and sincere efforts, we will encounter setbacks. Microsoft will be no different.

Are we better off waving our pitchforks at the Microsoft’s of the world, or do we respond to their courage and humility with grace? For me, the answer is clear.

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Sanjay Kapoor

Sanjay Kapoor is a Seattle-based sustainability consultant.