How Can Electronic Equipment and IT Producers Decarbonize?
By Glassdome
The electronic equipment and IT industries are on the lookout for ways to decarbonize. The laptops, smartphones and power cables on your desk and in your pocket feel like they’re from a different world than dusty mines and gritty factories. But if you’re in the industry, you know that you rely on raw materials, manufacturing, and transport that cause direct and indirect emissions.
Reducing emissions and improving energy efficiency across the supply chain is critical for saving money, preserving the environment, and staying compliant.
The Microsoft example
A useful case study is Microsoft. It reports its environmental impact across a diverse product line that goes from hardware to software to the cloud. Its 2022 Sustainability Report shares goals and progress across various fields, including carbon, water, waste, and ecosystems.
Microsoft has ambitious mid-to-long-term carbon objectives:
- By 2030, it pledges to be carbon-negative (removing more carbon than it emits).
- By 2050, it pledges to offset all carbon emissions generated directly or indirectly since its founding in 1975.
- Looking outside of its own processes, it plans to more than halve carbon emissions from partner firms (Scope 3) from 2020 to 2030.
Innovation has been positive for carbon reduction. Microsoft’s Scope 1 and 2 emissions have decreased by 17% with the use of renewable energy.
What happens when corporate growth means emissions growth?
Microsoft’s growth has led to carbon challenges. Successful cloud services and cloud-enabled hardware like Xbox need large global data centers. Operating them has led to a yearly 23% rise in Scope 3 emissions. And growing companies need more space. Capital investment-related emissions, including data center and office construction and server equipment expansion, constitute 30% of total Scope 3 emissions.
Faced with these headwinds, Microsoft needed to encourage emission reduction efforts beyond the enterprise. It expanded its internal carbon fee system, previously applied to internal departments at $15 per ton, to partner firms starting January 2021.
In 2020, Microsoft announced a Supplier Code of Conduct (SCoC) that urges suppliers to participate in carbon reduction efforts. In 2022, the SCoC was revised, mandating suppliers to set a minimum reduction goal of 55% by 2030 or specify alternative reduction targets in contracts. Microsoft also made sure it’s ready to provide third-party verification of suppliers’ carbon emissions disclosures.
Microsoft’s Supplier Social and Environmental Responsibility Manual specifies requirements regarding the establishment of carbon emission-related standards, science-based target setting, and reporting on reduction efforts. By 2022, 13 major partner companies received approval for reduction targets from the Science Based Targets initiative (SBTi), and 15 companies committed to setting science-based reduction targets.
How can third parties help reduce supplier emissions?
Microsoft participates in the CDP (Carbon Disclosure Project) Supply Chain Management Program and encourages the involvement of partner firms. In 2021, 87% of Microsoft’s partners reported their carbon emissions to the CDP, a 12% yearly increase. Additionally, Microsoft has incorporated carbon tracking into its in-house factory survey. This addition gauges the engagement level and prioritization of carbon management among executives. The company plans to integrate these insights into supply chain procurement decisions.
As a member of the Responsible Business Alliance (RBA), Microsoft requires both itself and its partners to adhere to environmental, safety, and corporate ethics guidelines. Microsoft partners can use educational materials on emission measurement, goal setting, and reduction activities. Carbon reduction training resources are publicly available on the Microsoft website, and in 2021, Microsoft launched a course on sustainable supply chain management on LinkedIn Learning.
Microsoft also provides low-interest loans, especially with the International Finance Corporation, to support the decarbonization of Asian emerging market suppliers. The company also provides technical advice to Microsoft partners on reducing greenhouse gas emissions in the manufacturing process.
Key takeaways
Set Bold Goals
Aim your standards high enough to force change. Low standards encourage sluggish movement.
Engage Your Suppliers
Let your suppliers know that their carbon footprint is a critical part of your business.
Work With a Team
Industry bodies, non-profits, and environmental associations are great ways to share learnings, establish standards, and pool costs.
Are you an electronics equipment or IT supplier looking to use your data to reduce your carbon footprint?
Or maybe you need to get compliant with regulations, or just want to be more efficient. Glassdome can help. Check out our Product Carbon Footprint solution to find out how.
