Eco-warriors: Microsoft Azure vs Amazon AWS on sustainability
Microsoft and Amazon are cloud’s biggest beasts, but their approach to green initiatives is very different. Who should you choose when searching for a sustainable supplier?
The issue of corporate sustainability is becoming ever higher profile, and as the world's major computing platform, cloud is under especial scrutiny.
Hyperscale data centres, where most cloud computing is performed, consume significant amounts of the world's resources at an ever-increasing rate; but the issue of sustainability stretches beyond the data centre to hit a host of other issues, including standards, waste and transparency.
This last point is key. Our research in the new Delta Sustainability Report shows that all cloud vendors are to an extent guilty of greenwashing; though some to a far greater level than others. Despite that, some are making real strides - and some are falling well behind the pack.
In this article, we'll examine two of the world's biggest cloud vendors, which stand out from the crowd on sustainability - although, admittedly, at opposite ends of the scale.
Methodology
We built the Sustainability Report on the foundation of the Sustainability Matrix: a set of 27 individual sustainability markers grouped into four categories. These are: Standards and Policies; Emissions/Energy/Water; Waste/Circular Economy/Recycling; and Transparency.
Each vendor we covered was assessed against the Sustainability Matrix criteria based on that vendor's own data - drawn from Environmental, Social and Governance (ESG) reporting, direct interviews with individuals at those organisations, and more general data available publicly, such as press releases. Each criterion has its own individual weighting in terms of its importance to sustainability, and each vendor is awarded a rating for the sustainability of its cloud services. The maximum score available was 60 points. All data was taken from reporting for year 2020/2021.
Microsoft Azure versus Amazon AWS: The background
Microsoft Azure and Amazon AWS are the world's biggest cloud platforms, accounting for more than half the global cloud infrastructure market. While AWS has been the enterprise cloud of choice for many years, Azure is catching up - and is far ahead on its sustainability credentials.
The scale of Microsoft's ambition, transparency and data impressed our researchers, but what especially stood out was the company's attitude towards carbon accounting. While many cloud vendors seemed willing to try and get away with reporting as little data as possible - because the field of carbon accounting is still highly ambiguous and voluntary - Microsoft has a clearly stated desire to see change and is leading by example.
Amazon, on the other hand, does not even break AWS out as a separate unit in terms of carbon emissions, making a true comparison difficult. However, even on a company-wide level Amazon makes little climate data readily available, which holds it back from top marks. The company clearly believes in the importance of sustainability, with multiple investments and the launch of The Climate Pledge, but the scale of its actions do not match the scale of its growth.
Microsoft Azure versus Amazon AWS: At a glance
- Standards and Policies: Of the 10 vendors in our analysis, Microsoft was the only one to score full marks in this category, while Amazon took half the maximum points.
- Emissions/Energy/Water: Microsoft has set ambitious targets and is working to fulfil them with ongoing energy innovation. Amazon has good targets but does not share enough data to know if it can back them up.
- Waste/Circular Economy/Recycling: Microsoft's weakest category. The company's recycling rate is increasing but so is its waste generation - significantly. However, mid-marks still put Microsoft ahead of Amazon, which took just one point out of a possible eight due to the lack of available data.
- Transparency: Microsoft presents clear and concise data and is honest about its shortcomings. Amazon provides data but with little clarity, context or accessibility.
Microsoft Azure versus Amazon AWS: Standards
Standards and Policies criteria exist to provide clarity about the standards vendors have signed up to.
Microsoft was the only vendor out of 10 in our full analysis to score top marks in this category. The company is certified and working towards multiple industry initiatives; has board-level sustainability representation (Chief Environmental Officer Dr. Lucas Joppa); and provides customers with the ability to track Scope 3 emissions through the Emissions Impact Dashboard. Suppliers are also required to disclose their emissions.
Microsoft has ambitious sustainability goals, committing to carbon negativity, water positivity and zero waste by 2030, as well as aiming to remove all historic emissions from the environment by 2050 - a unique prospect among cloud vendors.
Amazon took full marks for board-level representation (Kara Hurst, Worldwide VP Sustainability), and also performed well in its engagement with customers and suppliers: it launched The Climate Pledge in 2020, which shows good uptake (although its 2040 date lags behind some other vendor's net zero targets; and we question what was wrong with the existing recognised standards like Science Based Targets, which Amazon is also part of), and in December 2021 announced that it would provide customers with the carbon footprint of their use of AWS services.
In other areas, however, the world's largest cloud provider falls behind. While Amazon is part of SBTi, it is still at the initial ‘Commit' stage two years after joining - there are four further phases. The company is not ISO14001 certified, and while it displays the UN Sustainable Development Goals logo on its website, there is minimal detail about what it is doing to affect change.
Our researchers also consider Amazon's climate targets too small in scale, considering the company's size and power. For example, it set a goal to ‘collect environmental performance data from 200 suppliers' by the end of 2021; this is admirable, but at the same time Microsoft has made carbon reduction an explicit aspect of procurement processes for its supply chain.
This is not to say that Amazon is doing things badly, simply that it is moving too slowly toward its targets.
Microsoft Azure versus Amazon AWS: Energy
Emissions/Energy/Water covers the sustainability of data centres and office buildings.
Microsoft has ambitious energy, carbon and efficiency goals, although its available data (dating to 2017) suggests there is still work to do. Its market-based emissions (MBM) have been consistent in that time, ending 2020 at 11.2 million metric tonnes of CO2e (MTCO2e); but location-based (LBM) Scope 2 emissions rose from 2.7 million MTCO2e to 4.1 million MTCO2e. The company is performing well, but there is certainly room for progress.
At the same time, Amazon's emissions have increased alongside its massive growth, with both Scope 1 and Scope 3 rising (67% and 15% respectively) between 2018 and 2020, and Scope 2 only falling 4%. Overall, absolute emissions rose 19 per cent year-on-year to 60.1 million MTCO2e. Amazon instead prefers to talk about Carbon Intensity (emissions compared to revenue), which fell 16% over the same period - but this reflects Amazon's revenue growth, rather than emissions reduction.
It is in renewable energy generation where Amazon can shine. The company is the largest corporate buyer of renewable energy on the planet, planning to power 100% of its operations with renewables by 2025 (at 65% as of 2020, the most recent data currently available). Although it does not quantify how much of that energy is self-generated, it owns more than 270 wind and solar projects globally.
In comparison, Microsoft is already fully powered by renewables, although only 0.003% is self-generated; the remainder comes from power purchase agreements (PPAs), a type of direct contract for renewable energy that is preferable to offsetting via other types of renewable energy certificate (REC).
When it comes to their respective data centres, Microsoft has built all facilities since 2017 to at least LEED Gold Standard, with an average power usage effectiveness (PUE) of 1.1. The company is also examining new, more efficient modes of cooling, such as two-phase liquid cooling and even sunken facilities. Its current main cooling method utilises outside air and efficient adiabatic systems. Amazon, by contrast, only has Platinum and Gold LEED certifications for its headquarters and large US offices. In terms of data centres, it provides comparatively little information: it claims to use evaporative cooling, but outside of a few individual examples we do not know anything about the energy and water impact of cooling AWS facilities globally.
Amazon's own studies claim high levels of efficiency but - in a blatant example of greenwashing - are skewed by dealing only with enterprise data centres, instead of hyperscale ones belonging to other cloud providers. Naturally, Amazon is favoured here: the sheer scale of AWS datacentres will allow higher resource utilisations and energy efficiency than an individual enterprise datacentre could manage on its own.
As our report's authors say, ‘The claims about greater efficiency of AWS datacentres are made without once providing comparative PUE. This begs the question: if the global average AWS datacentre PUE is so efficient, why not publish the data?'
Finally, while Microsoft accelerated its carbon negativity target in 2020 thanks to the carbon saved from lower office activity, Amazon ‘banked' its emissions reduction without changing targets, despite colossal growth over the period.
Microsoft Azure versus Amazon AWS: Waste
Waste/Circular Economy/Recycling is all about the extent to which cloud vendors are squeezing various categories of waste out of their value chain.
Neither company performed especially well in this area: Amazon notably provides no data on any of the categories we assessed. It squeaked out a single point for ongoing work to replace paper & plastic envelopes, which can't be recycled, with paper-padded mailers. It is also increasing the content of recycled plastic in plastic film bags. Together, these improvements are expected to eliminate more than 25,000 tonnes of new plastic each year.
Microsoft also shares little data on waste, and where it does the company still did poorly. For example, in 2020/21 Microsoft generated 77,063 tonnes of waste, a massive increase on 2017 (26,059 tonnes). The amount recycled has increased, but so has the amount sent to landfill or incinerated. That said, the company does state that it includes e-waste in the recycling/reuse part.
Microsoft is targeting a 90% landfill diversion rate (waste kept out of landfills, normally through reuse and recycling) by 2030, and currently stands at 78%. It aims to have 100% recyclable packaging (currently 88%) by the same time, and to have eliminated all single-use plastics by 2025.
Microsoft Azure versus Amazon AWS: Transparency
Our final category, Transparency, deals with the extent to which the vendors make their environmental data available.
After reading the previous sections, it should come as no surprise that Microsoft scored well here. It presents its data clearly, covering many different aspects of ESG - including Scope 2 and 3 LBM and MBM, GHG emissions (although there is no indication how close each metric brings the company to its target), and carbon offset quality. The company even goes a step further, with an honest appraisal of the inadequacy of contractual instruments to offset carbon. The only criticism we have with Microsoft's data is that there is no visibility of the offsetting process, so we cannot see how offsets have been accounted for and applied.
Amazon took just a third of the available points in this category. Even where climate data is available, the company does not make it easily readable, burying it in appendices and often providing only top line numbers, with little context or insight into the calculations used to reach them.
Conclusions
When the focus of the Microsoft Azure vs Amazon AWS battle is their respective cloud platforms, Amazon remains the leader; but when the lens turns to sustainability, Microsoft is leaps and bounds ahead of its rival.
The Windows-maker performed well in nearly every area of our assessment, scoring close to full marks in each section except Waste. Its marks in Standards & Policies and Energy/Emissions/Water were both high, indicating that the reality of its actions nearly matches its ambitious targets.
The company provides extremely clear and concise data, with little evidence of greenwashing; and it is committed to sharing the information it gathers to help other companies meet common goals.
Amazon, on the other hand, falls down when it comes to data, taking just three points out of a possible 10 in Transparency. The company is making all the right noises, but the reality of its actions and willingness to speak openly about them does not match up.
The problem starts with the standards the company sets itself. For all the publicity and marketing around the need to move fast towards net zero, its 2040 target is as much as a decade slower than some rivals. The data that is available presents a somewhat skewed image of Amazon as a responsible firm, using cherry-picked examples that cannot be applied on a wider scale.
It is also difficult to compare Amazon to other cloud vendors in terms of emissions because it doesn't distinguish between AWS and the rest of its operations. This makes Amazon by far the biggest emitter in our survey - and with this comes responsibility for setting the highest possible standards and ambitions for decarbonisation, as well as bringing suppliers, partners and customers with the company. At present, however, it does not look as if the scale of Amazon's ambition matches what is necessary.
In fairness, Amazon has made some serious sustainability investments recently, particularly in renewables, and acknowledges that it will be ‘several years' for the effect to be fully reflected in its carbon footprint. It is possible that emissions will fall rapidly when these investments come online - but, in the short term, the company must do more to compensate until it reaches that point.
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