This week, Microsoft President and vice chair Brad Smith is heading to Egypt for the United Nation’s annual climate conference with a mission: show the world that the tech giant is “consistent and committed” in its climate goals, as well as communicate the “vital role” that the tech industry as a whole has to play in battling the climate crisis.
The Microsoft leader has been busy in recent months since the departure of chief environmental officer Lucas Joppa, stepping in to lead the company’s climate initiatives (something Smith has always been intimately involved with, as Joppa’s boss prior to his departure).
Last week at the Web Summit tech conference, he spoke about the urgency of the workforce transformation the world needs to reach net zero, as well as the current skills gap. “The key to the future is going to be a new generation of people with a new generation of technology coming from a new generation of companies,” he said, highlighting the work of startups like the India-based SEEDS, which is using satellite data and AI to identify homes that would be most susceptible to extreme heat, then helping them adapt.
Using AI and data to help the Global South adapt to climate change is one of Microsoft’s main focuses going into the COP27 climate talks. The company published a report on Monday about expanding its AI for Good Research Lab into Egypt and Kenya, as well as growing its collaboration with satellite data startup Planet Labs, which is intended to accelerate local development of climate solutions, with a focus on adaptation and early warning systems.
Smith sat down with Protocol last week ahead of COP27 to discuss Microsoft’s climate goals, challenges in reaching them, as well as the private and public sectors’ roles in reaching global net zero.
This conversation has been edited for brevity and clarity.
Microsoft has an ambitious goal of going carbon-negative by 2030 and investing significantly in carbon removal purchases. Is there a limit to how far the tech industry and private sector can go in terms of reaching global net zero? Where do governments need to step in?
I think the right way to think about it is that the market and companies cannot solve this problem by themselves. I also think it’s important to recognize that governments cannot solve it by themselves either. As with almost all big problems in the world, it’s a three-legged stool: You have business, you have nonprofits, and you have governments. I think businesses have a unique role to play in innovation, especially technology and product innovation. I think nonprofits are often the best at incubating new solutions using business innovation in part. Governments can make things scale in a way that no one else can, both through the bigger budgets they have and the power to legislate and regulate. So all three of us need to come together.
I think that tax policy and tax credits can play a very important role in two respects. One is continuing to spur innovation and investment in R&D. But the other is really helping small businesses, including in the skilling space. I think large employers can afford to invest in skilling in a way that a small company often cannot, and I think we should look more broadly at tax incentives to help. But I do think we should get more precise and targeted in the way we put incentives to work.
“You look at some of the big oil companies or … coal-burning electricity companies: We shouldn’t want them to die. In my opinion, I think we should want them to transform.” Photo: Ben McShane/Web Summit via Sportsfile
Microsoft sells cloud computing services to fossil fuel companies that arguably increases the speed at which oil is extracted and shipped to market. Will there ever be a point where Microsoft stops working with them, as Google has?
We’ve already put some limits in place. We announced four energy principles earlier this year worth taking a look at. I’ll just highlight the first and the fourth, because the first is really that what we want to do is help the energy sector transition. That’s what the energy sector needs to do.
But the fourth is the one that’s probably the most pertinent to your question. We said that we may use our advanced engineering and co-development resources to work with fossil fuel companies on things like discovery, exploration, exploitation, but only if the company has a net zero pledge. So that was a step in limiting our focus on where we’ll put our resources to work. I think as time goes by, what we’re really seeing is almost a natural evolution. The responsible energy companies are wanting to move, and then we get to move in tandem with them and help them make that progress.
There’s one school of thought that says, “Don’t invest any money that is using coal to produce electricity.” I come from the school of thought that says, “Invest money, but invest it for the purpose of helping them transition from coal to other sources of energy.” And I think that’s the type of action that we need to focus on taking.
So what are some specific steps that Microsoft is taking to help these companies get closer to net zero?
The best example is our Climate Innovation Fund. In some ways, we play an almost three-part role. Of course, we provide technology to companies, so they can use the cloud and AI and data to accelerate their innovation. But through the Climate Innovation Fund, we’re actually investing in these companies that are at the forefront of change. And then we’re a purchaser. So if you look at a company like Climeworks and ask them what role Microsoft has played, I think it’s that we’ve helped really accelerate their progress by standing behind them as an investor and standing next to them as a purchaser. And when you do both of those things together, that’s when you help to not just build a new market, but you help to build momentum for the companies in that market. And then they can use our technology for their own innovations.
But you know that Climeworks won’t allow fossil fuel companies to buy its carbon removal services.
I’m not here to tell them how they should do their business. You look at some of the big oil companies or my other example of coal-burning electricity companies: We shouldn’t want them to die. In my opinion, I think we should want them to transform. And you don’t help people transform if you stop working with them. That’s my fundamental philosophy about all of them.
Microsoft’s support of Climeworks is partly through your involvement in the First Movers Coalition. Who would you like to see join the coalition?
Everybody. I sort of joked with Secretary Kerry that we were actually the second generation of the First Movers, because I wish we had joined in Glasgow and COP last year. We joined in WEF at Davos in May. We’ll do more with them next week at COP27. The group needs to continue to expand. I thought it was great in Davos to have Google and Salesforce and Microsoft all sitting at a press conference together making huge financial commitments. What I love about the First Movers Coalition is the high-quality, long-duration carbon removal that we’re all investing in is one of the world’s most important markets that needs to be created.
You look at some of the big oil companies or my other example of coal-burning electricity companies: We shouldn’t want them to die. In my opinion, I think we should want them to transform.”
Do you think every company in tech has the ability to become carbon-negative?
I don’t know. I think that we hopefully will blaze the trail. But if we blaze the trail, hopefully we’ll discover and then show others a way that they can get onboard. I think that we need to create a net zero world by 2050, but we need to create a carbon-negative world by 2060 and actually even raise our ambition. We will have the technological capacity in the second half of this century to start to reverse the impact of climate change and bring the temperature of the planet back down by removing more carbon than humanity creates every year. The question isn’t whether we’ll have the way or whether we’ll have the will. If we have the will as a planet, the way will be clear.
I think that we need to create a net zero world by 2050, but we need to create a carbon negative world by 2060 and actually even raise our ambition.”
In times of economic uncertainty and recession, is it harder to keep climate commitments on track? What do you say to other business leaders to convince them that sustainability is just as important as, say, economic growth?
When it comes to the climate, the world cannot afford to wait. We don’t have time to take our foot off the accelerator. It’s tempting for many businesses, I get it. They’re under economic pressure. The reality is there will be more public pressure and more regulatory pressure. I think business leaders understand that. The real question is how to do all of these things at the same time. The thing that’s most interesting is that all of the pressures that are going to make this a harder winter, especially in Europe, will also create the foundation for faster progress in the balance of this decade. We will see people turn more to coal or natural gas or whatever they can get their hands on to keep their homes warm, and that’s understandable.
But what people have recognized is that they are more reliant than they should be on Russian gas and gas in general. What I find across Europe, when I meet with government leaders, as well as in the U.S. with things like the Inflation Reduction Act, is that this is also going to help accelerate the transition to solar, wind, nuclear, and other less carbon-emitting electrical fuels. So I’m optimistic about 2030 in part because I’m perhaps pessimistic about the winter of 2022.