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How a trailblazing sustainability team drives business innovation

Q&A with Microsoft's Matt Hellman

Matt Hellman, Global Director of Cloud for Sustainability at Microsoft, co-leads Microsoft’s 10,000-person Sustainability Employee Resource Group.

He helps drive Microsoft’s sustainability program worldwide by building strategic partnerships, implementing sustainability transformation for customers, and activating partner and community ecosystems.

Q: How has Microsoft been able to accelerate internal innovation to make a climate impact at scale?

Microsoft is not new to the world of sustainability. We set our first sustainability targets back in 2009. One thing we did was create a carbon fee, which is a tax we place on all the different business units across Microsoft’s enterprise, and that helps fund investments in nascent technologies and buying renewable energy.

A very simple thing we were able to do to drive a significant impact quickly was managing our data.

We used to track and manage our program data with a whole lot of Excel spreadsheets like many sustainability teams do today. We ended up taking all those spreadsheets, moving them into a data lake and started using our own tools and resources to better measure, manage and act against all that data. That was a huge leap forward for us to better understand our baseline and prioritize our sustainability efforts.

Q: Microsoft achieved carbon neutrality in 2012. Some of your goals for 2030 include becoming a carbon negative, water positive, zero-waste organization. How are you going to get it all done?

We do have very bold goals and ambitions, one of the strongest in the market. But we are not immune to many of the challenges that most people face when it comes to carbon accounting, measurement, reporting, and managing all emissions across our enterprise. We’ve built the capability to understand the key areas where we need to invest time, energy, and resources to support decarbonization and offset programs.

Microsoft's Matt Hellman
Another catalyst for decarbonization is our climate innovation fund. It is funded through our internal carbon tax and allows us to accelerate decarbonization efforts across our business. The climate innovation fund also lets us create a market for net new technologies like direct air capture.

Q: You’ve mentioned an internal carbon price a few times. It sounds like that has been key to some of your big sustainability achievements. How were you able to implement a carbon price and get buy-in?

Getting buy-in from our CFO and finance organization has been key to implementing an internal carbon fee. A lot of it was helping the Finance team to understand this is where we are today, this is where we need to go, here’s the gap, this is what it’s going to cost us, and helping to understand market dynamics from carbon pricing and offset programs.

We also took it step by step. Initially, when we announced it in 2012, our carbon fee was only for scopes 1 and 2. For scope 3, we charged $20 for business travel. In 2020, we expanded it to a full scope 1, 2, and 3, and we increased the price of our carbon fee. Our finance and accounting teams have been leading the charge on that.

Q: How is generative AI influencing your sustainability capabilities?

AI has been interesting in driving scale and innovation towards our 2030 goals. By enabling us to measure, predict, and optimize complex systems, AI has been game-changing for sustainability. We’ve been using AI in-house within our sustainability teams to help us better understand anomalies, outliers, and trends within our data and our organization. And to help externally as well, including in tracking and predicting wildfires, which have a huge carbon impact.

Q: You’ve invested in buying carbon removal via direct air capture from Climeworks, and you’re making more commitments in the market. Why are you doing this?

Science says it perfectly. Microsoft thinks about carbon removal and decarbonization in two ways. First, reducing carbon emissions. We have worked with all the business units across Microsoft to produce a plan to reduce up to 90% of our emissions. But obviously there’s 5-10 percent of emissions we just can’t abate easily. So, we remove the remaining.

We work with partners like Climeworks to help us achieve that remaining 5-10% [of emissions abatement]. Of course, as we start removing more carbon than we are emitting in 2030, offsets will play an even bigger role.

Q: What advice would you give sustainability teams on how they can speed things up, go faster, and innovate quicker?

I’ll keep it simple. It’s important to start with the end in mind. Then, gather your data, turn the data into insights, and turn the insights into action.

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