3 years in, Microsoft’s carbon fee is improving environments, creating healthier lives
For Lucy Vyalu, preparing daily meals for her family used to be an arduous and often smoke-filled endeavour. Vyalu, 65, who lives in Ndivu village in Eastern Province, Kenya, raised her three children using a clay stove for cooking.
“Life was not easy,” she explains via phone from her rural village. For one thing, she had to cook all of the food at once. “You couldn’t leave your home. If you went too far, you’d come back and find everything burnt out.”
The clay stove also used up more charcoal, sometimes three bags a month. And then there was the smoke: “It would fill the whole room. We would start coughing or sneezing. We would have to take the stove outside.”
Now, thanks to the efforts of the Paradigm Project, oversight from The CarbonNeutral Company and funding from Microsoft’s company-wide carbon fee, Vyalu and many like her have energy-efficient and less toxic “clean” charcoal cookstoves.
“It’s made such a big difference,” Vyalu says, explaining that she can now leave her home and do other things while she prepares daily meals. There’s also much less smoke and it costs less money, needing just one bag of charcoal that lasts two months.
“The new stoves are good,” she says. “They have changed our lives. They have made us healthier, and also improved the environment. We don’t use as much charcoal. We don’t have to cut down as many trees.”
Changing lives, and the environment, is the ultimate goal, explains David Barber, the Paradigm Project’s chief financial and operating officer. “Through a reduction in fuel consumption, we believe clean cookstoves can reduce deforestation, lower household expenditures, save time and improve quality of life for our customers,” he says.
Funding carbon-offset projects like the cookstove effort in Kenya is part Microsoft’s company-wide carbon fee, instituted nearly three years ago, and just one piece of the corporation’s overall sustainability effort.
In July 2012, Microsoft made a long-term commitment to carbon neutrality by establishing an internal carbon fee that holds all business groups financially responsible for the cost of reducing and compensating for their carbon emissions.
Since then, the money collected through this fee has purchased more than 10 billion kilowatt-hours of green power, reduced company emissions by 7.5 million metric tons of carbon dioxide equivalent, saved more than $10 million per year and reached more than 3.2 million people through the purchase of carbon offsets from community projects around the world.
“The idea is that not only are we reducing the carbon from our own operations, but the point of investing in carbon-offset community projects is to make a difference in emerging nations,” explains Tamara “T.J.” DiCaprio, senior director of environmental sustainability at Microsoft. “Our focus is on low-carbon economic development and providing opportunities for sustainable jobs. There’s a strong component to make a difference in people’s lives.”
In Indonesia, on the southern coast of the island of Borneo nestled next to the Java Sea, is the Rimba Raya Biodiversity Reserve, another project supported in part by Microsoft carbon-offset funds. The more than 100,000 acres of forest originally slated for conversion to palm oil plantations is now being preserved. The goal is two-fold: community development and biodiversity conservation, including protection of the endangered Borneo Orangutan.
“The forests, which are now barren, used to be intact and we had benefitted from that experience,” writes Ruslan, an employee of the reserve, in an email. (Like many in Indonesia, Ruslan prefers to use only his first name.) “It was easy to catch fish and find wood in the forests. Now, there’s no more wood and fish population has decreased. That’s why we feel the presence of Rimba Raya is giving us a new hope.”
Through the project, which employs community members, people are taught to plant seedlings in deforested areas around their village. “Basically, we are taught to rehabilitate and take care of our forests,” Ruslan adds.
The Rimba Raya employees use Windows Phones in the field to take photos of current conditions, and also to catalog their progress planting seedlings.
“May our dream to have dense forests again come true,” Ruslan writes. “That’s the hope to take care of the earth, so that our children and grandchildren can benefit from the trees that we are planting now.”
Microsoft’s DiCaprio calls this notion “virtuous uplift,” or small changes in behavior having a big impact over time. “It’s the ripple effect of doing good,” she says. “When you get people together with the opportunity to innovate, mix in the magic and the know-how of the local people to help these projects grow, everything accelerates.”
DiCaprio, the architect of the company’s carbon fee, has long been passionate about the environment. She says the oil spill off the coast of Santa Barbara in 1969, which over a 10-day period spewed nearly 100,000 barrels of crude into the Pacific, catalyzed her commitment. She was one of the first groups of students to graduate with a degree in environmental studies from the University of California at Santa Barbara in 1981. Since then, DiCaprio has earned her green MBA from Marylhurst University and spent the past 15 years designing sustainable business models for Microsoft.
“The question is: How can the environment be combined with the corporate business environment? How can technology help reduce environmental impact?” she explains. “It’s great to see technology and environmental responsibility come together. For me personally, it’s a powerful combination of the things I love and have spent a career focusing on.”
When it comes to designing a sustainable business model, “it has to make organizational sense,” DiCaprio adds. “It’s an effective economic model that mainstreams environmental consideration with global impact.”
For Microsoft, it’s a model increasingly becoming ingrained into company culture. Microsoft has a corporate policy to maintain carbon neutrality and 100 percent renewable energy for the operation of its datacenters, offices and software development labs.
“Actually charging and holding business groups accountable is a unique approach,” DiCaprio says of the carbon fee. “We’re finding that with it provides the education and awareness to drive culture change.”
Rob Bernard, Microsoft’s chief environmental strategist, adds that the biggest benefit of the company’s carbon fee has been unleashing creativity.
“It enables behavior,” he explains. “If you’re an employee at the company and you’ve got an idea of something we can do that’s important to you, there’s now a way you can act on that. People around the world in various offices have started to take the initiative. It’s accelerated the pace from which we’re driving innovation and experimentation.”
“We’ve always felt that employees play an integral role in our company’s ability to be more sustainable,” agrees Josh Henretig, senior director of energy, environment and cities at Microsoft.
In collaboration with a growing community of Microsoft employees worldwide who are passionate about sustainability, Henretig has helped develop a program that has funded 60 employee-driven projects in 23 countries, and invested more than $2 million to date in everything from electric bikes in Finland to optimizing energy management systems in Santiago, Chile, to lighting retrofits in Bogota, Colombia.
“When we started the carbon fee we not only wanted to offset our emissions, but also invest in mechanisms that will lower our overall energy use. That’s the above-the-line piece,” Henretig says. “The below-the-line piece is the employee engagement that comes with it. And the level of engagement and enthusiasm has been really cool.”
Similarly, DiCaprio says she’s been “pleasantly surprised by how positively the organization has embraced this program.” Some are even asking for an increase in the carbon fee “because they see the value of the investment of the fund,” she says. “That is a testimony to the effort.”
“Microsoft will look for opportunities to use the carbon fee to drive further successes for the offset projects that we’re already engaged in,” Bernard says, “as well as expand the effort both geographically and in terms of focus areas.”
One of those places, the Valdivian Coastal Reserve, is a global biodiversity hotspot located along Chile’s southern coastline and home to one of the most carbon-dense forests on Earth with Olivillo trees, which can live up to 400 years, and Alerce trees, which resemble North American Giant Sequoias, have life spans of up to 4,000 years and are the tallest trees in South America.
The area is also home to 77 identified species of mammals, birds, reptiles, amphibians and fish, including endangered species such as the Huillín or river otter; the Pudú, one of the world’s three smallest deer species; and the Magellanic woodpecker, one of the world’s largest woodpeckers.
Not only has Microsoft’s carbon fee helped the company — from executive leadership to operational teams — become accountable for its carbon footprint, it’s enabled the organization to help mitigate the impact of climate change, while creating new opportunities around the world.
Looking forward, Microsoft plans to continue to refine and grow the carbon fee model to help maximize its reach, both within the business and as part of the company’s broader contribution to the planet.
Says Bernard: “We built a program that hopefully every employee will be proud of.”
Lead Photo: A view of the Valdivian Coastal Reserve in southern Chile. © Matias Pinto for The Nature Conservancy / © 2014 The Nature Conservancy