Some time ago, the European Collaboration Summit released their magazine for the 2023 edition of their conference in Düsseldorf, Germany. Maarten Eekels, CTO and Managing Partner at Rapid Circle, wrote an article for that magazine. This is that same article. Since he wrote that article, Microsoft released the 2022 edition of their Sustainability Report. Maarten made some changes in this article to reflect the release of that latest edition.
“Over the past years, I have been often asked by our customers to help them build a business case for moving one or more of their on-premises or private datacentres hosted workloads to the public cloud. A lift and shift often does not result in a financial beneficial business case, until you decide to investigate cost-effective resource optimisation. Think of elasticity of resources, scale out when you need the compute power and scale down again when you do not. But the best financial business cases involve application modernisation. Anyway, I do not have to tell you that, you know all that. Now what is interesting, is that increasingly our customers are asking to include their carbon footprint in their business case. Sometimes I whisper in their ear that sustainability might be a topic worth exploring, but more often our customers have their own sustainability goals, they have a sustainability officer or another high-ranked person in charge of their environmental mission, and they even report on their goals in their annual reports. They realise there is new business value with more circular and sustainable products and services and/or they have stakeholders and regulators who are applying pressure to report and reduce carbon emissions. Public cloud can help to drastically decrease carbon emissions for IT workloads.
In this article I will focus on the Microsoft Cloud, but first I will explain a bit about terminology when it comes to sustainability, carbon neutral and net zero. Then I will talk about what Microsoft is doing with their datacentres and how that can help you, and finally I will show you how the Microsoft Emissions Impact Dashboards can help you track carbon footprint of your workloads in Microsoft 365 and Azure.”
What do we mean when we talk about “sustainability”? When you look it up, the formal meaning is “the ability to be maintained at a certain rate or level.” In our context we mean something else though:
Sustainability is the avoidance of the depletion of natural resources in order to maintain an ecological balance.
When it comes to sustainability, we often talk about “carbon footprint”, but it’s not just about carbon dioxide, it’s about the sum of all emissions of greenhouse gas induced by the activities of an individual, event, organisation, service, place or product. Yes, carbon dioxide (CO2) is the most known greenhouse gas, but there’s also Methane (CH4), Nitrous oxide (N2O), Refrigerant gases (HFCs, PFCs, and CFCs), Sulphur hexafluoride (SF6), Water vapor (H2O), and Ozone (O3). That is a lot of different gases. Because carbon dioxide is the most known one, most organisations calculate their entire greenhouse gas emissions into carbon dioxide equivalent (CO2e). We will use that term more in this article.
The largest global initiative to provide standards, guidance, tools and training for business and government to measure and manage climate-warming emissions, is Greenhouse Gas Protocol. I encourage you to check out their website for a ton of information about greenhouse gas emissions and standardised frameworks to measure those. They use the scope 1, scope 2 and scope 3 methodology to differentiate between the origin of your emissions.
Scope 1 – Direct emissions that an organisation’s activities create through the combustion of fossil fuels, such as exhaust from transport trucks or diesel generators. It also includes direct gas leakage from refrigerants or other fugitive emissions.
Scope 2 – Indirect emissions come from the purchase of electricity or heat that is used in offices or manufacturing plants.
Scope 3 – Indirect value chain emissions come from all other activities in which an organisation is engaged, including supply chain emissions. For businesses, this scope includes the emissions that are associated with the materials that are procured from suppliers, the business travel of its employees, and the full life cycle of its products, including the electricity that customers might consume when using the products.
The last topic I would like to discuss before we move on to the Microsoft specifics, is the difference between carbon neutral and net zero. Both terms are used by organisations, and where carbon neutral is a good first step, I believe we should all aim for net zero. Carbon neutral means purchasing carbon reduction credits equivalent to emissions released, without the need for emissions reductions to have taken place. Net zero goes further and means reducing emissions in line with latest climate science and balancing remaining residual emissions through carbon removal credits.
SUSTAINABILITY AT MICROSOFT
On January 16th, 2020, Microsoft took a pledge not only to be carbon negative by 2030, but to have removed all their historical carbon emissions by 2050. You can read all about that pledge in this official Microsoft blog article by Brad Smith, President and Vice Chair at Microsoft.
Shortly after, Microsoft released their 2020 Environmental Sustainability Report followd by the 2021 edition of that same report in 2021 and the 2022 edition two weeks ago. These reports give you a ton of insight into the efforts that Microsoft undertakes to reach their goals. You can download the latest report here. For example, you can read in the 2021 edition that at the release of that report, already four of Microsoft’s datacentres were Zero Waste certified, including the Dublin, Ireland location, which is the primary datacentre for Microsoft 365 EU tenants. But in the meantime, there are more Zero Waste certified datacentres. We know for example from the Microsoft announcement that the new Sweden datacentre is also Zero Waste certified and running on carbon-free power.
HOW CAN THE MICROSOFT CLOUD HELP YOU IN YOUR SUSTAINABILITY GOALS?
In the previous paragraphs we have talked about terminology and about Microsoft’s efforts towards carbon negative operations by 2030. If you look at the three different scopes of carbon emissions, all emissions that Microsoft generates by running their cloud environment that you use to host your IT operations, can be considered scope 3 upstream activities. If you would run your own datacentre, the power your datacentre would consume, is considered scope 2 for example, but you don’t operate the datacentre yourself, so everything is scope 3. The fact that Microsoft is putting so much effort in lowering their emissions, helps your organisation in lowering your scope 3 emissions. It is extremely hard to match Microsoft’s efforts in your own datacentre. Think of using green energy only. Think of the hardware you would use in your own datacentre; how is that produced and what emissions would that generate? Think of hardware disposition at end-of-life. So many aspects that influence your emissions, either direct or indirect, and so hard to manage if datacentre management is not your core business. For Microsoft it is, and their pledge forces them to invest in lowering emissions, which, as said, is good for your scope 3 upstream emissions.
There is a second angle as in how Microsoft can help you in your sustainability goals. Microsoft tracks your scope 3 emissions for you. Microsoft calculates the emissions you generate with your Microsoft 365 and/or Azure consumption as follows:
1. Calculate all emissions that are generated by the entire life cycle of all used materials in the datacentre infrastructure for a specific datacentre/region. This includes most common materials used to manufacture the IT infrastructure in a datacentre, the parts that make up the infrastructure (like hard drives, processors, steel racks, and more), and carbon factors across life stages of the materials used.
Next, Microsoft will segment this based on customer usage in that datacentre:
1. Count all hardware per datacentre.
2. Calculate all considered hardware emissions in the datacentre.
3. Calculate all datacentre usage (the consumption of the customers) in the datacentre.
4. Calculate emissions per usage.
5. Connect customer usage per service in that datacentre.
6. And as a result, calculate the customer emissions per service in that datacentre.
See figure 2 below for a graphical overview of that process.
Last year, Microsoft launched two Power BI dashboards where your organisation can track the scope 3 emissions that Microsoft calculates for you. How convenient is that!
MICROSOFT EMISSIONS IMPACT DASHBOARDS
There are two Power BI Emissions Impact dashboards that are free for you to use, one to track your Azure emissions and one to track your Microsoft 365 emissions. There is a prerequisite to have a Power BI Pro license though, but the dashboards themselves are free of charge. Below I will explain how you can install the dashboards and connect them to your consumption data.
Find the apps here and install the apps.
Once you have installed the apps, you will see that they hold sample data and that you must connect the dashboards to your consumption data. To do so, you need specific parameters to set up the connections.
For Azure, you need to find your Billing Account ID. Go to Cost Management + Billing in the Azure Portal, select your Billing profile and click Properties. There it is.
For Microsoft 365, you need to find your Tenant ID. Although you can find that in the Azure portal, I mostly make use of this website to find the tenant IDs of my tenants.
Next, you need to choose OAuth2 for the authentication method and the Organizational privacy level setting.
Now sign in and connect, and you are done. It might take a couple of hours for all your data to load and for the dashboards to show your emissions.
Beside the Power BI Pro prerequisite which I already mentioned, there are more prerequisites to consider:
For the Azure connection, your account needs to be Enrollment Administrator or Billing Account Administrator, and it must be an admin role with read/write permissions on your Azure tenant.
For the Microsoft 365 connection, your account needs to be a Microsoft 365 admin role (Global Reader is sufficient), and your tenant must be a business, enterprise or education subscription.
Microsoft is putting an enormous effort in becoming carbon negative by 2030. Your organisation can use those efforts in reducing their own scope 3 emissions for their IT workloads. Not only that, Microsoft even gives them the capability to track their scope 3 emissions based on their Microsoft cloud consumption.
Reducing the carbon footprint should be a strategic goal for any organisation. Bringing the carbon footprint of Microsoft cloud usage versus usage of your own datacentre into the business case, might help in building a viable business case for moving to the Microsoft cloud.
Written by: Maarten Eekels, Chief Technology Officer and Managing Partner at Rapid Circle