Microsoft Releases Carbon Fee Playbook for Companies

Microsoft has released its carbon fee playbook, an overview on how it implemented its internal carbon price and fee that includes a five-step process to guide other companies on how to put it into action at their own businesses.

Microsoft made a pledge in July 2012 to make its operations carbon neutral, achieving net zero emissions at its data centers and offices, as well employee business travel, by using technology to increase efficiency and investing in carbon offset projects and green power.

As part of its carbon neutral pledge, the company began charging its business groups an internal carbon fee associated with the use of electricity and business air travel July 1, at the start of the 2012-13 fiscal year. The fees collected through the model go into a central fund where they’re used to pay for projects that help Microsoft reduce emissions and be net carbon neutral.

Microsoft’s Carbon Fee playbook recommends businesses interested in a similar internal fee should begin by calculating their carbon impact and then establishing a carbon reduction policy and investment strategy.

For instance, Microsoft has used funds raised over the past year from its internal carbon offset fee to invest in 15 resource conservation and renewable energy projects throughout the world including Brazil, India, Kenya, Mongolia, China and the United States.

Funds raised through the fee also have been used for internal efficiency projects across the company to reduce carbon emissions, Microsoft says in a company blog post. The company has also purchased some renewable energy certificates.

Microsoft then suggests companies determine their internal carbon price, gain approval and establish governance and feedback loops. The final step is to administer the fee, share the results and evolve to increase the impact.

Walmart, BP, ExxonMobil, General Electric and about two dozen other major US companies have already integrated a price on carbon emissions into their long-term business plans, according to a CDP report.

In 2013, 28 companies based or operating in the US disclosed that they use an internal carbon price in their financial planning. This includes nine energy companies and eight utilities.