Financing For Climate Friendly Investment

Microsoft Global Carbon Fee

Across the tech sector and beyond, companies are recognizing the need to address their carbon footprint from their global operations, production, cloud and supply chain.

Microsoft has long been focused on sustainability. It has been tracking and reducing emissions since 2007, and operating at 100% carbon neutrality since 2012. At that time, Microsoft voluntarily introduced an internal carbon fee that holds its business units financially accountable for their carbon emissions. It’s a financial model that puts an incremental fee on carbon emissions associated with the company's global operations for data centers, offices, labs, manufacturing and business air travel. The carbon fee is set each year based on the estimated cost of internal efficiency, renewable energy, carbon offset, e-waste recycling and other innovative research projects needed to remain carbon neutral.

Each business unit reduces electricity-related emissions directly (such as through efficiency projects) where practical. Carbon neutrality for actual electricity-related emission is achieved through green power investments such as renewable power purchase agreements and renewable energy certificates. For emissions from air travel, fuel consumption (such as from backup generators) and any electricity-based emissions that can’t be mitigated through qualifying green power investments, Microsoft then turns to a portfolio of community investments in carbon offset projects.

Transforming corporate culture by putting a price on carbon


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Paris Agreement

The participation of non-state actors was a critical piece of the momentum leading up to COP21. The NAZCA portal lists many initiatives helping the world meet its climate change goals under the Paris Agreement.

Microsoft’s Global Carbon Fee is a strong example of the private sector leading the way towards highly resilient low-carbon future. Microsoft’s financial model that puts an incremental fee on carbon emissions, as well as its focus on projects that will accelerate climate friendly innovation, is a replicable example of non-state action that will help achieve the goals of the Paris Agreement.


Microsoft Green