At Microsoft, prioritizing sustainable practices with suppliers has also helped us uncover new opportunities for innovation and cost optimization.  

Our new guide, Reduce Risk, Create Resilience: Advancing Supply Chain Sustainability, outlines how data intelligence and collaboration can transform supply chains to be more agile, sustainable, and resilient. We offer lessons from our own experience as we strive to meet our ambitions to be carbon negative, water positive, and zero waste by 2030, all while protecting ecosystems. And we provide actionable insights and practical steps to help customers address reporting pressures, mitigate risks, and seize opportunities for innovation, ultimately driving resilience and long-term value.

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Aligning data and systems for the road ahead 

Organizations are facing growing regulations and customer expectations to prioritize sustainable practices. To make meaningful change, organizations and their suppliers must share data and work together to address challenges across the ecosystem.  

Advanced analytics and AI are transforming supply chain sustainability at Microsoft. By leveraging these technologies, we accelerate day-to-day work, gain real-time insights, and drive co-innovation to meet sustainability reporting requirements as well as business continuity needs. 

For instance, our procurement team used Microsoft Cloud for Sustainability to centralize supplier emissions data and streamline processes. By integrating AI-powered automation, such as automated review of supplier assurance letters, we reduced survey processing time by 92%. 

Eckes-Granini, a European producer of name-brand fruit juices, is committed to ensuring that all its raw ingredients are sustainably sourced by 2030. The company used Microsoft Intelligent Data Platform including Microsoft Azure and Microsoft Power BI to connect to essential data sources and create precise visualizations of suppliers’ progress. This enables Eckes-Granini to track risks and follow up with suppliers accordingly. Now almost 70% of Eckes-Granini’s juice ingredients meet sustainability standards, and the company is better prepared to respond to Germany’s Supply Chain Due Diligence Act.

Choosing carbon-free electricity solutions 

Carbon-free electricity (CFE), such as wind, solar, and hydroelectric power, can be a powerful lever for decarbonization through improved fuel efficiency while helping to reduce exposure to varying fuel prices. These solutions can play an integral role in industry decarbonization goals, such as the International Maritime Organization’s target of reducing a 50% of their absolute CO₂ emissions from 2008 levels, by 2050.^{1 2} Organizations can help scale these efforts and the benefits of CFE in supply chains by launching supplier enablement programs.  

To help meet our own carbon reduction targets, Microsoft now requires suppliers to transition to 100% carbon-free electricity for the goods and services delivered to Microsoft by 2030. We’re making this easier for suppliers through our Supplier REach Portal, co-created with 3Degrees, to streamline access and procurement of CFE; and Zettawatts’ Supplier CFE Program, to provide assistance for reaching our CFE requirement, from understanding CFE procurement to discussing goals, developing plans and budgets, and reviewing agreements. 

Turkish energy company Enerjisa Üretim established a round-the-clock remote operation center that receives more than 50,000 signals per second from its large network of hydropower, wind, and solar plants. It processes the data using an Azure-based solution including Azure IoT Hub, Azure Digital Twins, and Azure Machine Learning. The solution delivers real-time monitoring and data analytics on power plant performance—all in one centralized location. It also uses Microsoft Azure OpenAI Service to forecast future outcomes, predicting average daily production for turbines for up to two months.

Creating new value from resource optimization 

The World Economic Forum estimates that adopting circular business models could unlock up to USD4.5 trillion in value by 2030.³ By adopting circularity, companies can not only help meet regulatory requirements but also drive new innovation, enhance their brand reputation, and differentiate their business. 

With a focus on the long-term value of resources, companies can uncover ways to reduce environmental impact while also increasing value for the business. Supply chains are central to this opportunity. 

To help meet our goal of becoming a zero waste company by 2030, Microsoft set a target of reusing or recycling 90% of our cloud hardware by 2025. We not only reached that target a year early—we exceeded it. In 2024, we reached a 90.9% reuse and recycling rate of our cloud servers and components.

Within our global datacenters, Microsoft Circular Centers are foundational to this work, enabling us to process and route decommissioned servers and hardware components to their next useful lives, such as internal reuse, other electronic supply chains, or academies that train datacenter technicians. 

Reinventing supply chain logistics  

Supply chain logistics challenges are bigger than any one company. To meet growing regulatory and market pressures, organizations need to leverage data and AI technology across their ecosystems and industries. Sharing data at a more granular level, they can identify opportunities to improve infrastructure and boost sustainability across whole logistics networks.  

Applying this principle, Microsoft has moved our cloud supply chain to renewable diesel in our road freight operations in Europe and California while keeping existing equipment in use. 

We’re also advancing aviation decarbonization by integrating sustainable aviation fuel (SAF) into shipments of cloud hardware. Through multi-year agreements, we’re working to reduce air freight emissions and help scale the adoption of SAF across the industry.³ 

Results so far include: 

• 50% lower emissions for road freight operations in Europe and California, using renewable diesel.
• 17,000 metric tons of carbon dioxide equivalents (mtCO2e) saved through SAF, compared to conventional transportation fuels.
• 73% lower relative carbon intensity of our cloud logistics supply chain since 2022 through lower-carbon transportation and logistics consolidation. 

Microsoft sustainability solutions

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Get started mapping your sustainable supply chains 

Supply chain sustainability is unique for every organization. Take the first steps by exploring the ins and outs of using data technology and collaboration to drive environmental reporting compliance, adaptability, customer and stakeholder satisfaction, and innovation.  

• Dive in with the guide: Reduce Risk, Create Resilience: Advancing Supply Chain Sustainability. 
• Explore Microsoft Cloud for Sustainability.
• Read about AI transformations for sustainability.

¹ The Intergovernmental Panel on Climate Change (IPCC) defines decarbonization as: “The process by which countries, individuals or other entities aim to achieve zero fossil carbon existence. Typically refers to a reduction of the carbon emissions associated with electricity, industry and transport.” (IPCC)

² Decarbonized supply chains are resilient supply chains, McKinsey, 2022.

³ Circular Transformation of Industries: Unlocking Economic Value, World Economic Forum, 2025.

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These initiatives focus on harnessing data insights from smart technologies such as automation, Internet of Things (IoT), and AI, to improve how products are made and distributed. By unifying this and other data—including siloed data sets—into a single ESG data estate, manufacturing organizations can gain holistic views and granular insights to help them not only meet ESG reporting requirements, but also drive the sustainability of sourcing, making, transporting, and disposing of products—and implement business practices that advance a circular economy.  

To support your organization as you explore options and identify cost-effective steps in this era of industrial transformation, we’ve gathered learnings and recommendations into the Leader’s Guide to Sustainable Business Transformation. We’ve also created an ESG data readiness assessment to help you get started quickly. 

A more responsible, competitive path forward 

Manufacturing and mobility organizations that develop smart, automated, and data-driven processes as part of industrial transformation—and incorporate sustainability into those processes—are well positioned to gain a competitive advantage. ESG insights can help manufacturers achieve a range of goals across the value chain, such as:  

• Improved risk management and the protection of critical production processes.
• Engagement with vendors and suppliers to address Scope 3 emissions, reduce exposure to impacts from climate risks, and governance loopholes.
• Reduced costs and improved traceability with streamlined technology resources.
• More responsible capital deployment.  

With advanced solutions, organizations have already begun making these improvements. For example, Sandvik, a leader in mining industry manufacturing, implemented Microsoft AI and cloud technologies to enhance predictive maintenance and lower emissions, allowing them to cut down on waste and optimize resource use. 

ESG data: The input that fuels comprehensive sustainability 

To achieve the full potential of ESG data—from the shop floor to the board room—manufacturing and mobility organizations can benefit from evaluating sustainability comprehensively, in terms of environmental concerns as well as social and governance impacts. This approach uses ESG data insights to improve risk management and protect the value of critical product processes, and to make decisions that improve energy use, labor practices, supply chain transparency, regulatory compliance, and more.  

For example, Outokumpu, a worldwide leader in stainless steel production, tapped into the power of data by developing an industrial digital platform based on Microsoft Azure. The insights this platform provided led to significantly reduced waste (due to fewer defects) and energy usage—contributing to lower CO2 emissions. 

Key ways to maximize the benefits of ESG data in manufacturing and mobility include: 

• Build a data-driven infrastructure: ensure that systems are in place to collect and integrate accurate ESG data seamlessly across all departments.
• Leverage predictive insights: use AI and analytics to forecast and optimize operations, including by using natural language querying to enable all teams to access insights—enabling efficient resource use and proactive risk management.
• Foster a culture of sustainability: from executives to front-line workers, train employees in how ESG data can improve decision-making and drive sustainability outcomes. 

Implementing these ideas can provide the foundation for using ESG data to drive long-term success, and to make significant improvements relatively quickly. For instance, Nordic-based OSTP Group, which specializes in manufacturing stainless steel products and custom equipment, is using Microsoft technologies to track and report CO2 emissions. The data insights they gained led to a 70% reduction in direct CO2 emissions from 2021 to 2023. 

Schneider Electric, a global leader in energy management and industrial automation, has also reduced carbon emissions and optimized energy use—leveraging Azure OpenAI and other Microsoft AI technologies to boost not only sustainability, but also their engineers’ productivity. 

How Microsoft is powering sustainable transformations  

Microsoft has emerged as a leading partner for manufacturing and mobility organizations on their journey toward sustainability. We’ve designed our solutions to help businesses in three primary ways: 

1. Improve ESG data transparency: We’re continuously innovating to enable our customers to glean consolidated data intelligence from across their operations and value chain.
2. Deliver actionable insights: Microsoft has a deep slate of expertise helping manufacturers maximize operational efficiencies using sensor-enabled data management and automated scenarios powered by the Microsoft Cloud.
3. Create new opportunities: We are a global leader in enabling digital transformation through our data and AI solutions, to help businesses grow while becoming more sustainable. 

We’re delivering for these solution areas by bringing together a growing set of ESG data and AI capabilities from Microsoft and our global ecosystem of partners, in Microsoft Cloud for Sustainability.  

A core solution in this suite is Microsoft Sustainability Manager, which allows businesses to more easily record, report, and reduce their environmental impact through data connections and powerful AI-powered analytics—and can be integrated with virtually any business system. With this solution, manufacturing and mobility teams advance on carbon, water, and waste management, as well as circularity.  

Businesses can also implement the purpose-built ESG capabilities of Sustainability data solutions in Microsoft Fabric, to integrate, normalize, and analyze ESG data—and other enterprise data—on a single digital platform. Together, these capabilities help improve ESG data accuracy and transparency, simplify reporting processes, and accelerate progress toward goals.  

Swedish forestry giant Södra is showing what’s possible with these capabilities. Södra utilizes Microsoft Sustainability Manager to improve supply chain transparency and track sustainability data across its entire operation, allowing them to reduce reliance on carbon-intensive materials, displacing 8.8 million tons of CO2 emissions annually. Södra estimates the positive impact of this accomplishment as equivalent to one-fifth of Sweden’s annual reported carbon emissions. 

A sustainable future begins with smarter solutions 

As manufacturing and mobility continues to transform, both smart technologies and ESG data will help companies drive sustainability, meet compliance and reporting requirements, and uncover new opportunities for growth. Microsoft is here to help organizations make the transition with solutions to help reduce their environmental impact, improve operational efficiency, and position themselves for long-term success in a rapidly changing world. To gain a view of your ESG data across key areas, as well as customized guidance on how to drive sustainability progress and add business value, complete our readiness assessment.

Explore ESG readiness for other industries

• Retail and consumer goods: Unlocking business value with data-driven sustainability for retail and consumer goods
• Financial services: ESG data readiness drives value for financial services firms

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At the same time, individual financial services firms may encounter a risk of disconnect with these stakeholders, primarily due to challenges and questions around disparities between firms’ presentation of their sustainability products, and the accuracy of the ESG data that underlies those products.  

Meanwhile, firms seek to comply with increasing ESG regulations and standards. And they need to meet, and ideally exceed, internal targets for sustainability progress in their own operations. 

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Accordingly, the financial services industry is facing a complex constellation of challenges, with hurdles between the current state and the gaining of comprehensive ESG data insights—against a backdrop of confusion and intense competition.  

But once firms begin their data transformation journey, they’re increasingly well set to leverage data technology to drive meaningful value, from creating audit-ready ESG products to harnessing AI for advanced risk modeling. 

Positioning ESG data as a driver 

Microsoft knows firsthand the value of integrating ESG data with financial, operational, and other enterprise data. Without a connected and systemic view, firms lack holistic insight into equities, loans, or insured assets, leading to a competitive disadvantage. 

As we’ve worked over the last two decades to untangle and solve challenges at Microsoft in support of our own ESG data estate—and to drive on our sustainability commitments—we’ve regularly turned to experts in the field and endeavored to share our learnings. In taking solutions forward to our global customer base, we’ve seen that for financial services firms, the development of a comprehensive ESG data estate can advance speed to market as well as credibility of products. For example, Robeco, a Dutch international asset management organization, can now perform daily data updates for all its sustainable investing solutions—staying laser-focused on returns, but with audit-ready confidence and ESG transparency.  

Priorities for financial organizations translate to inroads in the development of an ESG data estate. For example:  

• Advanced data integration: Develop more sophisticated tools and systems to integrate ESG data seamlessly along with quality governance to inform comprehensive analyses and outcomes. 
• Sustainable and ESG investing and lending: Use data analytics to better identify and expand portfolio-level ESG assessments for risk and performance management.  
• Responsible allocation of transition capital: Help corporate clients achieve their sustainable transition goals through data-driven decision making. 
• Carbon credit markets: Support carbon trading initiatives with robust data management systems for tracking and reporting credits and trading activities.  
• Risk modeling modernization: Leverage AI capabilities to enhance risk modeling practices used in underwriting, pricing, and loan assessments.  

High-value initial steps toward ESG data readiness 

Just like with data security, developing an ESG data estate in a financial services firm doesn’t happen in a single effort. Instead, your firm can benefit from taking a customized approach based on your current data state, regulations, and data governance policy, and desired outcomes as you identify opportunities. 

Depending on the maturity of your existing data infrastructure, your organization may want to consider starting within one, or a mix, of these areas: 

Data gathering

• Develop a plan for integrating ESG data into your portfolio’s due diligence and risk analysis.
• Standardize a process for collecting and updating ESG data—from both internal and external sources. 

Data modernization

• Leverage digital capabilities to deliver new financial products to market.
• Enhance financial data compliance, governance, and security. 

Data insights  

• Implement comprehensive ESG training for your customers to support effective analysis and decision-making, with industry-specific components.
• Develop an AI-powered data system for accelerated ESG analysis tailored to your clients’ needs.  

Data action  

• Develop advanced ESG data systems to pinpoint data gaps and data accuracy risks.
• Align your decision-making and strategy to complete and accurate data. 

Advancing your sustainability journey with Microsoft AI-powered solutions 

We see enormous potential for financial services firms to tackle risks and capitalize on opportunities driven by sustainability, for themselves and their clients, and we believe comprehensive, harmonized, accessible data is the key.  

With cloud-based data capabilities, including Microsoft Cloud for Sustainability, Microsoft Fabric, and our AI-powered data solutions, we can help you shift from siloed data and labor-intensive processes to streamlined management that results in timely ESG insights and transparent reporting out to stakeholders—all with Microsoft security and governance. 

Once firms gain comprehensive management and insights into their ESG data, the potential for new and enhanced client services quickly follows. For example, United States-based economics research firm Moody’s leverages Microsoft Fabric solutions, AI-powered insights, and Microsoft Security to enable their 14,000 global employees to drive innovation for clients. In the United Kingdom, the London Stock Exchange Group (LSEG) selectively deploys generative AI to augment their existing work in Microsoft Fabric with custom chatbots and agents copilots.  

Empowering the financial services industry for sustainability success  

We know that for us to do well, our customers and the world must also do well. Our mission is to empower every individual and organization on the planet to achieve more, by building technology that can deliver business value to our customers, and positive impact to the world. 

Wherever you are in your sustainability journey, we’re here to partner with you—delivering continuous innovation from our solutions teams and our global ecosystem of partners, as we expand our ESG data readiness capabilities to help meet your unique needs in a world that is shifting quickly.  

Explore ESG readiness for other industries

• Retail and consumer goods: Unlocking business value with data-driven sustainability for retail and consumer goods
• Manufacturing: Data is driving a more sustainable industrial transformation

¹ PwC, ESG-focused institutional investment seen soaring 84% to US$33.9 trillion in 2026, making up 21.5% of assets under management: PwC report, October 2022. 

² Stanford Graduate School of Business, The ESG Generation Gap: Millennials and Boomers Split on Their Investing Goals,November 2022. 

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Beyond the illnesses they cause, food safety incidents have significant negative effects on economies, farmers, the environment in the form of food waste, and governments. Returning to the example of the United States for a moment, the federal government each year budgets over $7 billion of its tax revenue to foodborne illness response programs.³ This is a reactive system, and to reduce the human, financial, and environmental effects of food safety incidents, we need to become more proactive.  

The good news is that we have the tools at our fingertips to create much more predictable food systems. Removing the farming sector’s dependencies on paper record-keeping is a simple first step, as it increases the visibility and reliability of reports. With this groundwork, farmers can start digitizing the food system and using generative AI to analyze large datasets, identify trends, and present insights in easily digestible language and visualizations through tools like Copilot in Excel and Copilot in Power BI.  

Farmers and food suppliers can detect important issues easily with generative AI solutions, like a disruption in the cold chain between the farm and the grocer, which can lead to spoilage. Generative AI can also be used to check for compliance issues and security breaches. It can suggest process improvements, track demand, and trigger alerts that automate real-time responses—all with the goal of responding to food safety incidents before they transform into public health incidents. 

Paving the way for the advancement of AI 

Microsoft Copilot and industry-specific AI agents built by partners with specific expertise in the food production industry represent a potential leap forward in preventative food safety, but they aren’t the only benefit digitalization represents. Other solutions, themselves part of the roadmap toward generative AI adoption, are already enabling meaningful change for food producers. Recent advancements in both Internet of Things (IoT) sensors and the AI technology behind them have enabled technology to mimic the human senses of sight, hearing, and smell to improve traditional food sorting, grading, and inspection processes. Azure Data Manager for Agriculture helps collect data on farms, aiding in the identification of conditions likely to introduce bacteria to crops. 

For example, a food processing company can digitize its quality control process with the help of Microsoft Power Apps, Power BI, and Dataverse. Together, these technologies help the company better capture real-time data, generate more insightful reports and improve overall operational efficiency.

As companies build out capabilities like these, they gain the type of financial benefits and actionable insights and can simultaneously establish a deeper pool of information for future generative AI solutions to draw from. Microsoft Fabric also plays a crucial role in building an AI-ready data estate. By integrating data sources like IoT sensors, temperature monitors, and historical data, Fabric helps companies establish more comprehensive data platforms. With the advanced predictive analytics these platforms can generate, food suppliers can reduce product recalls, prevent the spread of counterfeit goods, minimize food waste, and increase consumer trust.  

Bringing better farming data into the mix 

By consolidating its data, increasing the number of advanced sensors it employs, and tracking broader types of data, the food production industry is making way for even greater advancement. Copilot and customized agents can rapidly analyze every stage of the food supply chain, from farm to table. Today’s visual recognition technology often identifies contaminants in food products faster and in smaller concentrations than its human counterparts. Generative AI models can use this data to aid in the detection of foreign objects and pathogens in either raw ingredients or finished food products. Analysis of historical and real-time data from temperature sensors in food production and warehousing facilities can help alert producers to conditions that contribute to excess food spoilage. When an agent recognizes farming or food processing irregularities, it can generate predictions based on historical data, check for compliance issues, and suggest operational improvements. By bringing together farm-specific data like local weather conditions, soil makeup, and pest populations, agents could help predict and mitigate seasonal risks to crops.

Looking ahead 

The future of food safety will rely on the continued integration of technology and data into the world’s food production and distribution processes. Customized agents powered by AI can perform tasks and provide decision support to improve food safety. These agents can be built to analyze vast amounts of data from spreadsheets, handwritten documents, voice memos, and videos, uncovering previously undetected errors and missing information.  

Companies in the farming sector can leverage Microsoft Copilot Studio to develop their own intelligent agents that assist with their most critical and risk-prone agricultural processes. Using the low-code interface of Copilot Studio, businesses can quickly create and deploy custom applications without extensive coding knowledge, enabling them to automate tasks such as crop monitoring, pest detection, and resource management. Companies can also choose to collaborate with Microsoft partners with industry-specific expertise, ensuring their solutions are tailored to their specific needs and comply with industry regulations. This partnership approach not only accelerates innovation but also ensures the deployment of robust and effective AI-powered solutions. 

By maximizing the potential of generative AI in food safety, we can predict and prevent many of the sector’s most prevalent issues, improve food quality, and prevent many food safety incidents. There are tremendous opportunities ahead, and collaboration between food producers, the regulatory bodies that oversee them, and technology companies are key to the success of these initiatives. By working together, we can create a safer and more sustainable food system for everyone. 

¹ Food Logistics, Food Recalls in 2024 are Surging. What’s the Crisis Response?, September 2024.

² World Health Organization, Foodborne Diseases Estimates.

³ U.S. Food & Drug, FDA Seeks $7.2 Billion to Protect and Advance Public Health by Enhancing Food Safety and Advancing Medical Product Availability, March 2023.

The post The growing need for AI in food safety appeared first on Microsoft Sustainability Blog.

Beginning in August 2024, Microsoft launched a new datacenter design that optimizes AI workloads and consumes zero water for cooling. By adopting chip-level cooling solutions, we can deliver precise temperature control without water evaporation. While water is still used for administrative purposes like restrooms and kitchens, this design will avoid the need for more than 125 million liters of water per year per datacenter.*

Zero-water evaporation and the quest for ultra-low Water Usage Effectiveness 

These new liquid cooling technologies recycle water through a closed loop. Once the system is filled during construction, it will continually circulate water between the servers and chillers to dissipate heat without requiring a fresh water supply. 

We measure water efficiency through Water Usage Effectiveness (WUE), which divides total annual water consumption for humidification and cooling by the total energy consumption for IT equipment. We are continually investing in improving the design and operation of our datacenters to minimize water use. In our last fiscal year, our datacenters operated with an average WUE of 0.30 L/kWh. This represents a 39% improvement compared to 2021, when we reported a global average of 0.49 L/kWh.  This WUE reduction is due to our ongoing efforts to actively reduce water wastage, expand our operating temperature range, and audit our data center operations. We also expanded our use of alternative water sources, such as reclaimed and recycled water, in Texas, Washington, California, and Singapore. 

We have been working since the early 2000s to reduce water use and improved our WUE by 80% since our first generation of datacenters. As water challenges grow more extreme, we know we have more work to do. The shift to the next generation datacenters is expected to help reduce our WUE to near zero for each datacenter employing zero-water evaporation. As our fleet expands over time, this shift will help reduce Microsoft’s fleetwide WUE even further.

Mitigating energy impacts 

Traditionally, water has been evaporated on-site to reduce the power demand of the cooling systems. Replacement of evaporative systems with mechanical cooling will increase our power usage effectiveness (PUE). However, our latest chip-level cooling solutions will allow us to utilize warmer temperatures for cooling than previous generations of IT hardware, which enables us to mitigate the power use with high efficiency economizing chillers with elevated water temperatures. 

The result is a nominal increase in our annual energy usage compared to our evaporative datacenter designs across the global fleet. Additional innovations to provide more targeted cooling are in development and are expected to continue to reduce power consumption. 

Pilot projects and implementation 

Although our current fleet will still use a mix of air-cooled and water-cooled systems, new projects in Phoenix, Arizona, and Mt. Pleasant, Wisconsin, will pilot zero-water evaporated designs in 2026. Starting August 2024, all new Microsoft datacenter designs began using this next-generation cooling technology, as we work to make zero-water evaporation the primary cooling method across our owned portfolio. These new sites will begin coming online in late 2027. 

Advancing sustainability: Sustainable by design 

Learn more about how Microsoft is advancing the sustainability of cloud and AI through our blog series:  

• Sustainable by design: Advancing the sustainability of AI
• Sustainable by design: Transforming datacenter water efficiency
• Sustainable by design: Innovating for energy efficiency in AI, part 1
• Sustainable by design: Innovating for energy efficiency in AI, part 2
• Sustainable by design: Advancing low carbon materials
• Sustainable by design: Innovating for zero waste

*Based on our FY 2024 global average withdrawal WUE of 0.30 L/kWh.

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Enter Microsoft Cloud for Sustainability data and AI solutions. These include technologies like Microsoft Fabric, Microsoft Sustainability Manager, and Microsoft Copilot which together enable organizations to centralize and standardize complex ESG data for analytics and reporting and unlock critical data intelligence to help them move forward.  

We’re excited to share details about the latest capabilities in Cloud for Sustainability that build on this potential, providing the opportunity to implement transformative, industry-targeted solutions for both our customers and our partners. 

Microsoft Cloud for Sustainability

Data and AI capabilities to help you transform for the future using environmental, social, and governance (ESG) data intelligence

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Three powerful new ways to advance sustainability with AI  

At this year’s Microsoft Ignite, we announced our latest AI innovations empowering organizations to improve their ESG data transparency, gain insights to advance toward their goals, and continue to grow sustainable business opportunities. These features were developed to meet the needs of key sustainability decision makers and practitioners, such as chief sustainability officers, chief financial officers, chief data officers, and chief information officers. 

1. General availability of sustainability data solutions in Microsoft Fabric, built into Fabric to leverage the single, AI-powered platform for centralizing enterprise data and analytics. Using these solutions, organizations can take care of their ESG data analytics in one place, driving progress faster by simplifying and accelerating analytics, collaboration, and decision making.  

Sustainability data solutions enable organizations to: 

• Centralize and transform disparate data into one sustainability data lake that conforms to a standardized ESG schema.
• Build custom insights for carbon, water, and waste by connecting to their data in Microsoft Sustainability Manager.
• Compute, visualize, and analyze ESG metrics for regulatory standards like Corporate Sustainability Disclosure Regulation (CSRD) by using prebuilt and custom metric definitions.
• Generate social and governance insights from disparate social and governance data in the ESG data lake.
• Report and analyze Microsoft Azure emissions data by collecting and processing the emissions data in the ESG data lake.

Now, there’s also next-generation AI and the power of large language models (LLM) to accelerate our customers’ work in Fabric at every layer. Users can simply describe the visuals and insights they’re looking for, and Copilot in Microsoft Power BI will do the rest.  

All in conversational language, users can: 

• Create and tailor reports in seconds.
• Generate and edit calculations.
• Create narrative summaries.
• Ask questions about their data.

With the ability to easily tailor the tone, scope, and style of narratives and add them seamlessly within reports, Power BI can also deliver data insights even more impactfully through easy-to-understand text summaries.  

Explore Sustainability data solutions in Microsoft Fabric and learn how to deploy the solutions.  

2. Coming soon: External reporting in Microsoft Sustainability Manager (formerly Project ESG Reporting). To address ESG reporting complexity, enhance efficiency, and provide greater transparency for ESG reporting, we’ve developed templates based on various ESG standards or frameworks. Using these, organizations can more easily create, complete, and approve comprehensive reports across both quantitative and qualitative metrics. 

The reporting templates map to: 

• Corporate Sustainability Reporting Directive (CSRD) 
• Australian Sustainability Reporting Standards (ASRS) 
• Business Responsibility and Sustainability Reporting (BRSR 1 and 2)
• Global Reporting Initiative (GRI)
• International Financial Reporting Standards (IFRS 1 and 2)
• Sustainability Accounting Standards Board (SASB) 

Organizations can also add standards manually or with a .CSV file.  

This feature is available in Microsoft Sustainability Manager Essentials and Premium and in Power Apps as simply Microsoft Sustainability Manager.  

3. Sustainability agents. New prebuilt and custom agents are designed to help organizations rapidly uncover insights on a Microsoft AI platform such as Microsoft Copilot Studio or Azure AI Foundry. Agents can integrate company data for real-time retrieval and be surfaced to users in a multitude of ways, from canvas apps to supported enterprise applications such as Microsoft Sustainability Manager. 

Using a Sustainability Insights agent, organizations can quickly configure an AI assistant to get insights and data about their company’s sustainability goals and progress. They can assess sustainability efforts year over year or in comparison to other organizations while quickly accessing general knowledge around sustainability. 

As compliance standards continue to evolve, it’s crucial to have the ability to quickly adapt and meet diverse needs, such as varying standards by geography or industry. With agent templates, organizations can use LLM with their data aligned with the Cloud for Sustainability schema to help meet sustainability standards like the European Union’s Carbon Border Adjustment Mechanism (CBAM) fee.  

The CBAM agent (coming soon) helps organizations estimate their fee for “carbon leakage” around less stringent climate policies in non-European Union (EU) countries. This can occur when EU-based companies move carbon-intensive production abroad or when EU products are replaced by more carbon-intensive imports.  

The agent helps to ensure that their carbon pricing is factored into imported goods while supporting the EU’s climate objectives, maintaining competitiveness, and avoiding potential regulatory penalties. Using it, you can leverage Copilot to: 

• Align your carbon fee with CBAM.
• Put a price on carbon-intensive goods imported into the European Union to help ensure that the carbon prices of imports and domestic products align.
• Estimate your carbon fee to be paid on CBAM. 

These solutions are available in AppSource and the Power Catalog. 

Partners: Build a solution practice with Microsoft Cloud for Sustainability  

Are you a systems integrator or independent software developer? By partnering with Microsoft, you can take advantage of the Microsoft Cloud platform, which extends beyond Dynamics 365 and Power Platform to Microsoft 365 and Azure and includes industry clouds, enabling you to empower your customers and deliver industry solutions faster.  

Use our cloud platform and resources to: 

• Accelerate your innovation and reduce time to market by leveraging industry-specific capabilities, data models, connectors, and APIs on a foundation of security and compliance.
• Make investments in content, programs, incentives, and offers that will help you scale as you go.
• Co-sell industry solutions alongside Microsoft by using our commercial marketplace and increasing your visibility with software certifications.

To support your solution practice, we offer Cloud for Sustainability resources, such as sandbox offers, learning paths, online technical summits, architecture guidance, sales assets, Azure Marketplace and AppSource, and more.  

Are you already a partner? Join our Microsoft Cloud for Sustainability Insider Program to participate in preview conversations with program members from other organizations and the engineering team.   

Looking for a Cloud for Sustainability partner or solution? Visit AppSource. 

Learn more about sustainability solutions with Microsoft 

• Bookmark Microsoft Industry Blogs: Sustainability for the latest updates, including new capabilities in Microsoft Cloud for Sustainability.     
• Discover solutions with Microsoft Sustainability Manager.    
• Explore the Microsoft Cloud for Sustainability Community, where you can find answers to questions and connect with peers and experts.    
• See what’s new in Microsoft Cloud for Sustainability.

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As we work to advance the sustainability of our business, we are also advancing the sustainability of the datacenter infrastructure needed to deliver cloud and AI innovations. At Microsoft, we are working to decarbonize datacenters by focusing on how we design, build, and operate. To support this work, we are also investing to help scale markets for low-carbon building materials.

As a sector, building materials such as steel and concrete are some of the highest contributors to the embodied carbon of new construction, together producing an estimated 13.5% of global carbon emissions.¹ Embodied carbon is a measure of the carbon emitted during the manufacturing, installation, maintenance, and disposal of a product or material.  

Innovations in lower-carbon steel and concrete are emerging around the globe, however, these markets are still nascent and need significant investment to bring the needed supply online. Through our $1 billion Climate Innovation Fund and the collaboration of pioneering teams across datacenter engineering and procurement, we’re investing to accelerate these markets.  

Innovating for energy efficiency

Explore how we’re advancing the power and energy efficiency of AI

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Novel construction materials and new methods of creating those materials show promise in sectors that are traditionally described as “hard to abate,” these are sectors we believe are necessary to abate. For example, we’re breaking ground on mass timber datacenters, investing to accelerate market availability of near-zero carbon steel, and expanding options for low-carbon concrete in construction. 

Innovating with mass timber datacenter construction to reduce embodied carbon 

In Virginia, we’re building our first datacenters made with superstrong, ultra-lightweight wood with the goal of reducing the embodied carbon of the buildings by 35% compared to conventional steel construction, and 65% compared to typical precast concrete. 

Although this is a novel approach to datacenter construction, it’s a material we’ve used before. In 2021, when we chose cross-laminated timber (CLT) for a new building on our Silicon Valley campus, the approach brought numerous environmental benefits. With ecological design elements ranging from water reuse to clean energy production to new public pathways and restoration of native ecology, the structure earned recognition for sustainable design excellence from the American Institute of Architects.  

The CLT market is well-established in Europe and rapidly growing in the United States, due to demand in the residential segment and adaptability of CLT to new designs. However, our innovative work to apply this material to building a hyperscale datacenter has required everyone to work differently, from our engineers to our procurement teams to the suppliers involved in construction.  

Because CLT is prefabricated offsite, it brings additional benefits such as a faster and safer onsite installation than traditional corrugated steel. Built commonly out of spruce, pine, or fir, CLT shows remarkable structural integrity and resilience even under high temperatures, developing a char and providing insulation in scenarios where steel is likely to fail. But few datacenter building specialists have experience with the material, reducing the availability of skilled contractors, and the materials come at a premium cost in certain regions.  

Throughout this project, our teams have risen to the challenge by sharing best practices across disciplines, crafting new procurement strategies, ensuring skilling pathways, and working collaboratively to validate new material combinations. Expanding the building material options for datacenter construction opens new paths toward achieving climate goals and contributes to expanding the market for sustainable building materials, including markets for regionally sourced materials and contractors working with these materials. 

Accelerating market availability of near-zero carbon steel 

Last year, Microsoft’s Climate Innovation Fund became an investor in Sweden’s Stegra (formerly H2 Green Steel), which is building the world’s first large-scale green steel plant in northern Sweden, achieving up to a 95% reduction in carbon emissions compared to traditional steelmaking.² Another promising investment within our Climate Innovation Fund is Boston Metal, which uses renewable electricity and a unique process that generates oxygen instead of carbon dioxide when making steel.

In addition, Microsoft is a founding member of the Sustainable Steel Buyers Platform of RMI, a first-of-its-kind buyers’ group accelerating steel decarbonization through collaborative procurement and market action. Our engineering and procurement teams are working to incorporate low-emissions steel and repurposed steel in new construction. 

Expanding options for low-carbon concrete for construction  

The bulk of emissions associated with concrete come from cement production. A key ingredient of cement is limestone, which is typically heated with clay to around 2,650 degrees Fahrenheit in a coal or gas-fired kiln where it undergoes a chemical reaction called calcination that releases carbon dioxide as a byproduct. In Washington, our pilot program utilizes cement alternatives like biogenic limestone (grown in place by algae instead of quarried) and fly ash and slag, testing mixes that can lower the embodied carbon in concrete by more than 50% compared to traditional mixes.  

While transitioning to low-carbon concrete production is not as capital intensive as steel manufacturing, the supply chain is fragmented and manufacturing processes can be complex—causing delays and slowing adoption of new techniques. For this reason, we’re looking to expand options for construction across the low-carbon concrete value chain. 

One of the Climate Innovation Fund’s earliest investments is CarbonCure, a company deploying low carbon concrete technologies that inject captured carbon dioxide into concrete, where the CO2 immediately mineralizes and is permanently embedded as nanosized rocks within the physical product. This not only acts as a carbon sink but also strengthens the material, enabling a reduction in the amount of carbon-intensive cement required. Another investment is Prometheus Materials, a company producing zero-carbon bio-concrete through a unique process that combines naturally occurring microalgae with other components.  

Explore the Sustainable by design series

With these investments, we aim to facilitate the commercialization of materials innovations that can make an outsized impact on carbon reduction for our own buildings and for built environments around the world. 

Learn more about our work to advance the sustainability of AI with the Sustainable by design blog series: 

• Sustainable by design: Advancing the sustainability of AI
• Sustainable by design: Transforming datacenter water efficiency
• Sustainable by design: Innovating for energy efficiency in AI, part 1
• Sustainable by design: Innovating for energy efficiency in AI, part 2
• Sustainable by design: Innovating for zero waste

¹ Nature Research, Cement and steel—nine steps to net zero. 

² Stegra, Green platforms—green hydrogen, green iron, and green steel. 

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By holistically tracking, analyzing, and sharing information for each facet of their value chain, retail and CG companies can meet this moment while also addressing regulatory requirements—by turning challenges around ESG data infrastructure and organizational culture into an opportunity to build business resilience.  

Starting by understanding your current ESG data management can be a helpful first step: Assess your ESG data readiness.  

New opportunities require holistic, accessible ESG data  

Taking ESG data out of silos and into a unified, accessible system can help retail and CG companies identify and act on opportunities to advance sustainability goals. Eckes-Granini, Europe’s largest fruit juice producer, embraces this strategy by using Microsoft solutions to increase supply chain transparency. By adopting this objective, data-driven supplier management technology, now almost 70% of Eckes-Granini’s juice ingredients come from sustainable sources—putting the company on track to achieving their goal of using 100% sustainable ingredients by 2030.  

Key emerging areas where ESG data insights can help retail and CG companies drive sustainability and efficiencies include: 

• Circularity: Recycling, recommerce, and reusing or repurposing materials help companies reduce reliance on net-new or single-use materials, to help reduce waste and carbon emissions.
• Sustainable material sourcing: Integrating recycled and low carbon materials into operations and final packaged products helps companies minimize overall environmental impact.
• Increased transparency: Companies can improve brand recognition and loyalty by providing greater ESG transparency—which can also help identify new products or lines of business.
• Evolved supply chain: Data and AI-powered technologies can help streamline supply chain, reduce emissions, and minimize waste, while pinpointing ways to boost efficiency and decarbonization.

Today’s roadblocks and tomorrow’s benefits  

As discussed in Driving Business Value with ESG Data Readiness, creating a robust ESG data estate can strengthen business resilience, by enabling teams to make informed decisions as markets shift and opportunities evolve.  

For retail and CG companies, this capability supports decision-making as they explore sustainability improvements, from upgrading equipment to increase energy efficiency, to investing in new low-carbon or recycled materials. It can also help companies advance ESG data tracking in supplier regions where nascent reporting standards can impede transparency, consistency, or granularity of ESG information. 

Retail and CG companies can also collaborate across the value chain to share ESG data that helps unlock shared efficiencies, innovation, and greater trust. For example, by using Microsoft solutions to leverage integrated data analysis, sustainability-driven Radish—a food-delivery startup in Montreal—shares data insights with its restaurant partners to offset supply challenges, reduce food waste, and even access government assistance grants.   

Data that delivers more than reporting compliance  

Leveraging ESG data can also help retail and CG companies explore options such as AI-powered waste reduction, product recommerce services, or innovative, eco-friendly packaging and products. German cosmetics company Beiersdorf took this approach by using Microsoft solutions to build a simulation tool to assess scope 3 emissions for products and packaging, transitioning the company from emissions guesswork to objective insights.  

The power of ESG data insights is also boosting sustainability and improving decision-making for global bakery giant Gruppo Bimbo. The company adopted Microsoft Cloud for Sustainability to centralize emissions data across its operations—helping the company advance toward its sustainability targets for 2025, 2030, and 2050. And the Netherlands’ leading supermarket chain, Albert Hejin, developed an AI-powered solution in partnership with Microsoft to reduce food waste by dynamically adjusting prices on near-expiration items.  

Make ESG data work for you

To help unlock the value of ESG data, retailers and CG companies can benefit from setting up strong data collection and management systems:  

• Bridge the data gap: By investing in technologies that integrate ESG data across operations, companies can collect accurate and actionable information from all aspects of the value chain.
• Build trust through governance: Ensuring data accuracy is essential for both regulatory compliance and strategic decision-making, requiring strong governance and control practices around ESG data.
• Embed ESG into the company culture: Training and engagement programs can help integrate sustainability into a company’s daily operations—from executive leadership to frontline workers. And by enriching data with value-added insights from other departments, combined with natural language querying, more teams are empowered to make sustainability-informed business decisions.  

Following these steps—and the framework in the Leader’s Guide to Sustainable Business Transformation—can help you use ESG data to drive long-term success beyond reporting requirements, according to your unique business priorities. For example, industry-leading businesses like electronics retailer Kotsovolos-Dixons used Microsoft Solutions to create digital twins of its stores, reducing waste and boosting operational efficiency by 50%. Additionally, one of the United Kingdom’s largest food sellers, Co-op Group, adopted our hybrid cloud services to reduce its datacenter footprint to save £400,000 annually. 

Sustainability creates success

Microsoft Cloud for Sustainability

Data and AI capabilities to help you transform for the future using environmental, social, and governance (ESG) data intelligence

Start your journey

To stay competitive and in compliance, sustainability has become a necessity for the retail and CG industries. But starting with small steps works: ESG data can serve as the foundation for transformation, and help you advance no matter where you are in your sustainability journey.  

We’re ready to partner with you, to help you use AI-powered data technology and Internet of Things (IoT) to begin to accelerate your progress. The growing set of capabilities in Microsoft Cloud for Sustainability are designed to help companies leverage ESG insights to report on and reduce environmental impacts while driving growth well into the future.  

To gain a view of your ESG data across key areas, as well as personalized guidance on how to drive sustainability progress and add business value, complete our readiness assessment.

Explore ESG readiness for other industries

• Manufacturing: Data is driving a more sustainable industrial transformation
• Financial services: ESG data readiness drives value for financial services firms

¹ McKinsey & Company, How to prepare for a sustainable future along the value chain, January 20, 2022.

² PWC, Integrated ESG Data in Retail: Why and How.

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