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Microsoft's comittment to cloud computing, with the huge data centres it requires, is increasing the company's carbon emissions. (FABRIZIO BENSCH/REUTERS)
Microsoft's comittment to cloud computing, with the huge data centres it requires, is increasing the company's carbon emissions. (FABRIZIO BENSCH/REUTERS)

Microsoft to adopt carbon offset scheme Add to ...

Microsoft is to set an internal carbon price to help drive greener business decisions across its sprawling global operations, in a pioneering policy yet to be adopted by many companies of its size.

The software group, which operates in more than 100 nations, is also looking at buying wind farms or other clean power sources as part of a commitment to become carbon neutral in the coming financial year.

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The new undertaking, to be unveiled on Tuesday, will include an unusual “carbon fee chargeback” system that will mean business units responsible for incurring emissions from data centres, air travel, offices and software laboratories will be charged an internal fee according to emission levels.

The money will be put into an investment fund the company expects to use for renewable energy and other carbon reduction projects.

The fund is likely to accumulate “somewhere north of $10-million” (U.S.) by the end of the scheme’s first year, said Rob Bernard, Microsoft’s chief environmental strategist.

“My goal is actually to get it way smaller because the less we’re collecting, the less carbon impact we’re having,” he said in an interview.

Many companies monitor and try to reduce their carbon emissions, but the use of an internal carbon price is less common.

“I think this is an impressive and comprehensive approach to addressing carbon emissions and reflects leadership on the part of the company,” said Mindy Lubber, chief executive of Ceres, a U.S.-based group advocating sustainable business practices.

Royal Dutch Shell has had a carbon price for some years, set at $40 a tonne of carbon dioxide, which it uses to evaluate the overall cost of proposed projects. Mr. Bernard said Microsoft would not disclose its price.

A large portion of the greenhouse gas emissions produced by technology companies such as Microsoft arise from their electricity-hungry data centres.

Steve Ballmer, Microsoft chief executive, in 2009 pledged that by 2012 the group would reduce its carbon emissions by at least 30 per cent per unit of revenue from 2007 levels.

Since then, it has cut emissions from offices and air travel, which should only be considered as a “last option” under company policy. But it has also invested heavily in the industry-wide trend toward cloud computing, which has significantly increased its electricity use.

High energy use has implications in countries that have adopted some form of carbon pricing, such as the EU’s emissions trading system.

Microsoft is headquartered in the U.S., which does not have a national emissions trading scheme or carbon price. But it operates in many countries that either have such a system or plan to introduce one.

Australia is launching a carbon tax this year, South Korea last week passed legislation for an emissions trading scheme and China is working on plans to set up seven pilot carbon trading schemes.

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