Microsoft Cloud for Sustainability API calculation methodology

Article
06/30/2023

Important

Some or all of this functionality is available as part of a preview release. The content and the functionality are subject to change.

Microsoft's cloud carbon calculation methodology calculates the carbon emissions associated with the use of Microsoft’s Azure and Microsoft 365 cloud computing resources. It covers scope 1, 2, and 3 carbon emissions as calculated from the manufacture, packaging, transportation, use, and end-of-life phases of data center hardware in all data centers owned and leased by Microsoft. The emissions and usage measured by this methodology are for Microsoft’s Azure and Microsoft 365 cloud only. The Microsoft 365 methodology is limited to emissions associated with usage of Exchange Online, SharePoint, OneDrive, Microsoft Teams, Word, Excel, PowerPoint, and Outlook.

Note

Carbon accounting practices are evolving rapidly. We're committed to evolving, revising, and refining our methodologies over time to incorporate science-based, validated approaches as they become available and relevant to assessing the carbon emissions associated with the Azure cloud.

The following image shows examples of scope 1, 2, and 3 carbon emission types in the Microsoft cloud value chain.

Carbon emission types in Microsoft cloud value chain.

Standards used for calculation

At Microsoft, we segment our greenhouse gas (GHG) emissions into three categories consistent with the Greenhouse Gas Protocol, which is a globally recognized standard for the calculation methodology and reporting of Greenhouse Gas (GHG) emissions:

Scope 1: Direct emissions – Emissions from stationary and mobile combustion, as well as process and fugitive emissions.
Scope 2: Indirect emissions - Emissions from the consumption of electricity, heat, or steam.
Scope 3: Other indirect emissions – Manufacturing phase and end-of-life emissions (supply chain related). The scope of this tool is scope 3 categories 1, 2, 4, 5, 9, and 12.

The calculations represented in the API are the product of a life cycle evaluation that assessed the energy use associated with cloud computing operations and the carbon emissions associated with the manufacturing phase raw materials extraction, component aggregation, and end of management of materials used in Azure and the Microsoft 365 cloud. Both are outlined in the respective calculation section later in this article.

The following image shows carbon accounting scopes by stakeholder:

Carbon scopes by stakeholder.

Included emission sources

GHG emissions are classified into scope 1, 2, and 3 emissions based on the level of control that an organization has over the sources of those emissions.

Scope 1

GHG emissions include emissions from the combustion of diesel fuel and fugitive emissions from the use of refrigerants for cooling of our data centers. Our scope 1 emissions are small compared to our scope 2 emissions, so we combine them for reporting purposes.

Scope 2

GHG emissions include emissions from direct power consumption used to power our global data centers that are leased and owned by Microsoft. We invest in renewable energy power purchase agreements (PPAs) globally, and plan on being powered by 100% renewable energy and eliminating fossil fuels from backup power by 2025.

Scope 3

GHG emissions include emissions that result from raw material extraction, select component aggregation, and end-of-life management (for example, recycling, landfill, or composting) of hardware devices, such as servers and network equipment, used in our leased and owned data centers. This tool includes the emissions from the raw material extraction of the different parts and components that make up the hardware devices and their packaging, using material composition and emissions resulting from product life cycle stages.

By their nature, scope 1, 2, and 3 emissions are all relative to the reporting entity; one company’s scope 1 emissions will be another’s scope 3 emissions. This tool reflects Microsoft’s combined scope 1, 2, and 3 emissions associated with the delivery of Azure and Microsoft 365 core cloud services. These emissions reflect a customer’s scope 3 emissions from the customer’s use of Microsoft cloud services.

Calculation methodology

As previously stated, Microsoft bases its calculation methodology on principles from the Greenhouse Gas Protocol.

Calculation methodology for scope 1 and 2

Power usage for scope 1 and 2 Azure emissions is categorized by storage, compute, or network. Usage time in these categories assists us in attribution of scope 1 and 2 emissions.

The full methodology for scopes 1 and 2 is based on a life cycle evaluation conducted for a 2018 Microsoft study, The carbon benefits of cloud computing: A study on the Microsoft Cloud in partnership with WSP.

The scope 2 methodology calculates the energy and carbon impacts for each data center over time, taking into consideration various factors such as data center and server efficiency, grid emission factors, renewable energy purchases, and infrastructure power usage.

Calculation methodology for scope 3

The calculation of scope 3 emissions is best summarized by the following image, which shows the scope 3 emissions allocation methodology:

scope 3 allocation

We start with the life cycle evaluation of materials used in our data center infrastructure and calculate carbon emissions by data center. We then segment this sum based on customer usage of each data center.

This methodology for scope 3 emissions calculates the energy and carbon impacts for each data center over time, using the following items:

Most common materials used to manufacture the IT infrastructure used in our data centers
Most common parts that make up cloud infrastructure (hard disks, FPGA, steel racks)
Complete inventory of all the assets (as categorized by Microsoft bill of materials) in our data centers by region
Carbon factors for cloud infrastructure across life stages (raw material extraction, component aggregation, usage, and end-of-life disposal)

Calculation variables

Lifetime of equipment defaults to six years.
Critical infrastructure, such as the data center facility, isn't included in the methodology at this time, but may be added as data becomes available.
Microsoft 365 methodology: Proxy usage measures are used in the place of true server-side compute and storage usage to apportion total carbon emissions, and may be replaced as data becomes available.

Validation of our methodology is included in the white paper A new approach for Scope 3 emissions transparency.

Customer attributions and calculations for carbon emissions

For Azure customers, emissions are allocated based on their relative Azure usage in a given datacenter region. An algorithm calculates a usage factor that provides emissions per unit of customer usage in a specific Azure data center region, then emissions are directly calculated based on this factor. This process of attribution is shown graphically in the scope 3 emissions allocation methodology image earlier in this article.

For Microsoft 365, the step above is used to compute emissions for Microsoft 365 commercial applications in each data center region, then these emissions values are aportioned across customers based on proxies for server-side resource consumption (including active usage and/or data storage in the included Microsoft 365 applications). A 'regional usage factor' is computed for each customer in each data center region that represents their usage relative to other customers, then emissions are directly calculated based on this factor. Proxy usage measures are used in the place of true server-side compute and storage, and may be replaced as data becomes available.

This methodology of segmentation by customer usage is consistent across scope 1, 2, and 3 carbon calculation.

FAQ

How are usage hours calculated?

Usage hours are based on a sum of your company’s compute, storage, and data transfer in the Microsoft cloud. Usage for emissions calculations may or may not equal your Microsoft usage for billing purposes.

What unit does Microsoft use in measuring carbon emissions?

The unit used is metric tons of carbon dioxide equivalent (mtCO2e).

Disclaimer

The Microsoft Cloud for Sustainability API (preview) is based on industry standards for carbon calculation of servers and provides general estimates to help organizations gain insights into the carbon emissions of the IT infrastructure associated with the use of Azure cloud services. The findings, interpretations, and conclusions presented in connection with the Microsoft Cloud for Sustainability API (preview), including the calculations, are not specific advice or recommendations. Information and views expressed may change without notice. The Microsoft Cloud for Sustainability API (preview) is provided as is, without any representation or warranty of any kind, either expressed or implied, including without limitation any representations or endorsements regarding the use of, the results of, or performance of the Microsoft Cloud for Sustainability API (preview), its appropriateness, accuracy, reliability, or correctness. The entire risk as to the use of the Microsoft Cloud for Sustainability API (preview) is assumed by you. Microsoft does not assume liability for the use of the Microsoft Cloud for Sustainability API (preview). In no event will Microsoft be liable for additional direct or indirect to damages including any lost profits, lost savings, or any incidental or consequential damages arising from any defects, or the use or inability to use the Microsoft Cloud for Sustainability API (preview), even if Microsoft has been advised of the possibility of such damages.