Our approach A commitment to a carbon negative future The context The consequences of climate change are increasingly apparent, from wildfires to devastating flooding. The scientific reality of climate change is more accepted than ever before—to avert the worst effects of the rapidly changing climate, the world needs to transition to a net zero carbon emissions economy by 2050. But we still lack key strategies to avoid catastrophic climate change. The world needs agreement on the meaning of global net zero emissions, measurement to track our progress toward net zero, and mature markets for carbon reduction and removal that are necessary to get us there. Through our operations, technology, and advocacy, Microsoft is addressing these three areas to help drive the change that society needs. Our strategy to reach carbon negative by 2030 is relatively simple—we will reduce our Scope 1 and 2 emissions to near zero by improving efficiency, adopting new solutions, and purchasing zero carbon energy. 1 We are engaging suppliers and our business groups to cut our Scope 3 emissions by more than 50 percent and we’ll rely on carbon removal to reach carbon negative. This year, we took strides forward on zero carbon energy, continued progress on carbon removal, and improved our methodologies and measurement of emissions data across the company. We will continue to further refine how we measure and approach these categories as we move forward. We also took new steps to accelerate the work of others via the launch of a new solution, the Microsoft Cloud for Sustainability , to help our customers measure their carbon emissions more effectively, and created resources to help decarbonize our supply chain. Our commitment: carbon negative by 2030 and by 2050 to remove from the atmosphere an equivalent amount of all the carbon dioxide our company has emitted either directly or by our electricity consumption since we were founded in 1975. Reducing direct emissions We will reduce our Scope 1 and 2 emissions to near zero by the middle of the decade through energy efficiency work and reaching 100 percent renewable energy by 2025. Replacing with 100/100/0 carbon free energy By 2030, 100 percent of our electricity consumption will be matched by zero carbon energy purchases 100 percent of the time. Reducing value chain emissions By 2030, we will reduce our Scope 3 emissions by more than half from a 2020 baseline. Removing the rest of our emissions By 2030, Microsoft will remove more carbon than it emits. By 2050, we ́ll remove an equivalent amount of carbon to all our historical emissions. Empowering customers and partners We will help our suppliers, customers, and partners around the world to reduce their carbon footprints through our learnings and with the power of data, AI, and digital technology. Using our voice on carbon-related public policy issues We will support new public policy initiatives to accelerate carbon reduction and removal opportunities. Investing in the future We have created a $1 billion Climate Innovation Fund to accelerate the global development of carbon reduction and removal technologies, as well as related climate solutions to reduce water and waste. 16