Brad Smith, vice chair and president of Microsoft, speaks at Web Summit on a black stage.
Photo: Ben McShane/Web Summit via Sportsfile

Brad Smith’s big climate vision

Protocol Climate

Hello and good day. Your Protocol Climate team is here with an exclusive chat with Microsoft president and vice chair Brad Smith about the company’s climate goals and why it still works with oil companies. We’re also looking at bidirectional charging and a new UN net zero report that dropped at COP27, because ‘tis the damn season.

Microsoft’s climate ambitions

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.

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. So, too, is helping the world reach not just net zero by 2050, but carbon negativity in the latter half of the century. Yet Microsoft still provides cloud computing services to oil companies, which are making the climb to net zero that much steeper.

Smith sat down with Protocol ahead of COP27 to talk about the company’s vision as well as the tensions involved.

This interview has been edited for brevity and clarity.

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.

Microsoft sells cloud computing services to fossil fuel companies that arguably increase 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 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.

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.

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 on board. 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.

Read the full interview here.

EV charging’s next act

Electric vehicles are essentially batteries on wheels. Figuring out not only how to charge them for mobility but also use them to put power back on the grid will be one of the challenges of the next decade. But doing so, much less scaling it for the masses, is more complicated than it seems. That doesn’t make it any less important for policymakers and the tech industry to get it right, though.

Bidirectional charging could be a game-changing technology. To charge an EV, the charger or the car must have a converter that takes alternating current (AC) power from the grid and flips it to direct current (DC) power that the car’s battery can store. Bidirectional charging technology — either in an EV or the charger it's plugged into — can convert that DC power to AC power to feed it back to the grid.

But hurdles remain in the way of its adoption. The technology is still very much in the pilot phase, in part because making use of the power stored in an EV’s battery involves getting utilities on board to feed power back onto the grid.

  • California utility PG&E launched several projects last summer to explore the use of bidirectional charging in different contexts to gauge how cost-effective the technology is.
  • There are a handful of companies — including Emporia and Wallbox — coming out with the tech that could make vehicle-to-home charging more accessible in the next year.
  • There’s one caveat, though: using an EV to power either a home or the grid depends on getting the local utility’s say-so.
  • An EV owner can’t sell power back to the grid if the utility doesn’t have a program in place to receive it, and supplying power to one’s own home is contingent on having a system in place that tells the utility to stem the flow of power from the grid.
  • And some utilities might not want to fork over that power.

With the right incentive setup, bidirectional charging could be extremely useful. It could help customers keep their own lights on when utilities need to cut power due to fire risk or ensure the grid doesn’t go down during times of high demand.

  • The current bidirectional charging policy landscape is fragmented, though state and federal lawmakers are beginning to push utility commissions to create plans for vehicle-to-grid charging.
  • For instance, the California Public Utilities Commission laid out a vehicle-grid integration framework in 2020 after lawmakers required the agency to do so.
  • In collaboration with the energy security nonprofit SAFE, the Electrification Coalition recommended that federal lawmakers expand the charging infrastructure tax credit to cover vehicle-to-grid development and encourage the creation of national technical standards.
  • While there are no federal rules on the books yet, the Department of Energy, for its part, began to explore best practices for accelerating the use of these technologies earlier this year.

Get the full story on the charging technology of tomorrow here.

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One big number: 10

Way back in March, your friendly Protocol Climate team offered you some tips for writing a climate plan that doesn’t suck. Surely you took that advice. But if for some reason you didn’t, the United Nations has your back.

The U.N. dropped a 10-step how-to guide to ensure net zero plans are real talk and not greenwashing, care of an expert panel that has a name much too long to print. And it’s well worth a read whether you're a CSO looking to improve your company’s climate plan or a Big Tech watchdog who wants to make sure companies are doing the right thing.

Among the 10 recommendations, a few jump out. No shade to recommendation one (publicly announce a net zero plan), but some of the others are salient and a little less remedial, particularly for tech companies:

  • Recommendation three deals with the role carbon credits should play in a net zero plan. The answer is that they need to be high quality and show both additionality (cutting emissions that otherwise wouldn’t have happened) and permanence (storing said emissions for a long period of time).
  • For the tech industry, which is increasingly turning to carbon credits and offsets to “prove” it’s serious about net zero, the recommendation — along with a slew of reporting on carbon markets’ failures — should be a wake-up call.
  • Recommendation five calls for phasing out fossil fuels. While Big Tech isn’t directly drilling oil wells, it is actively aiding the industry.
  • “All net zero pledges should include specific targets aimed at ending the use of and/or support for fossil fuels,” the report says. That’s a clear invitation for companies like Microsoft, Amazon, and others providing computing to sunset their support for Big Oil.
  • Recommendations six and 10 call for aligning advocacy and speeding up regulations as opposed to relying on voluntary schemes.
  • The tech industry has had fraught relationships with trade groups that have, at times, opposed climate regulations. The report also makes tech companies need to have an escalation strategy if trade groups block legislation, policies, or regulations that could help them reach net zero.

Big Tech is already doing some things right. The industry is better at setting climate goals than other sectors of the Fortune 500.

  • Workers have pushed leadership to strengthen those plans. (A key part of recommendation four is getting workers involved, so head-pat to some CEOs.)
  • Yet the industry is also starting to hemorrhage talent for not turning net zero plans into action fast enough or setting interim targets (another key recommendation from the report).
  • The new report makes clear exactly what work tech companies still need to do if they want to get on track.

— Brian Kahn

Hot links

Laid off? Axed techies from Twitter, Stripe, and more can look to climate tech for jobs.

It’s Election Day. Governor races in Michigan, Minnesota, and Wisconsin will determine if those states will meet their climate goals or not.

Also on the election front: Amazon’s denier donations. The company has donated $138,000 to climate deniers this election cycle. This does not meet U.N. criteria for net zero credibility.

So about carbon credits helping forests … A new analysis shows an Australian carbon credit scheme for nature-based solutions resulted in hundreds of millions of dollars in credits — and fewer trees.

Coke is sponsoring COP27, and let’s just say not everyone’s happy about it.

Corporations are countries too, my friend. More government leaders are saying companies need to play a bigger role in climate negotiations. (Spoiler: They already are.)

Palm oil is so 20th century. This Bill Gates-backed startup is trying to make a palm oil alternative out of yeast.

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Thanks for reading! As ever, you can send any and all feedback to climate@protocol.com. See you Thursday!

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