Introduction: Why embodied carbon in cloud hardware matters
At Microsoft, 97% of our greenhouse gas (GHG) emissions fall under the Scope 3 category, with the majority originating in our supply chain. Information and communication technology (ICT) hardware within our datacenters (e.g. servers) is a significant contributor to our supply chain emissions, making it essential to understand and reduce the embodied carbon of our Azure hardware as Microsoft and other major cloud providers pursue ambitious climate goals. Yet, accurately measuring these impacts is hard. It’s especially difficult when you work within a complex, global supply chain producing products that continually change and advance. The challenge is immense, and we expect meeting our targets requires us to innovate just as quickly - developing actionable carbon accounting and metrics that drive accountability and real progress.
This blog introduces our approach to addressing this challenge, and our white paper How Microsoft is advancing embodied carbon measurement at scale for Azure hardware provides a deeper look into the methodology. There will continue to be more work to do, for us and collectively with the industry, but we believe it’s a solid and actionable foundation to build on.
Our approach to scaling embodied carbon measurement
To meet the complexity and scale of Azure hardware systems in our datacenters, we developed an in‑house, process‑based lifecycle assessment (LCA) approach for cloud ICT hardware. This approach, known internally as the cloud hardware emissions methodology (CHEM), scales environmental impact modeling of Azure hardware while preserving the data resolution needed to support meaningful decarbonization.
At a high level, CHEM brings together:
- Microsoft’s product data systems and supplier data, including full materials declarations
- State-of-the-art, technology–specific semiconductor environmental impact data
- Cloud‑based automated LCA software, mapping product, material and impact data
CHEM connects internal product and supplier material data to environmental life‑cycle inventories, automates repetitive mapping steps, and keeps LCA practitioners focused on data quality and actionable insights. It allows:
- Scalability and automation: modeling thousands of hardware configurations efficiently, enabling rapid, consistent, and high-resolution carbon footprinting across Microsoft’s Azure data centers
- Data quality and modularity: integration of supplier-specific data and state-of-the-art semiconductor impact data that improve accuracy, while a modular architecture supports continuous updates as new data becomes available
- Actionable insights: identifying emissions hot spots deep within multi-tiered supply chains, supporting targeted decarbonization interventions and informed hardware design decisions
In essence, CHEM translates the rigor of process-based LCA into a repeatable approach that our engineering, sourcing, and sustainability teams can use to identify hotspots and track progress towards decarbonization, without sacrificing the resolution of LCA and the technical depth complex hardware demands.
What CHEM enables for Microsoft
- Improving Scope 3 embodied carbon accounting
High‑granularity, process‑based data now covers over 97% of cloud server rack emissions and nearly 80% of semiconductor emissions, a key hotspot in the ICT supply chain. This enhances our annual carbon reporting and helps ensure our disclosures are more representative of real hardware configurations and their embodied carbon in our Azure datacenters.
- Identifying, sizing and tracking supply‑chain decarbonization actions
By quantifying impacts across multiple tiers of the ICT hardware supply chain, we can pinpoint where emissions occur—whether in materials, energy use, or manufacturing processes - and work with suppliers to evaluate, prioritize and quantify the impact reduction of targeted interventions.
- Supporting hardware systems architecture
System architects can use these insights to understand the embodied carbon implications of design choices for components, servers, racks, and clusters. This helps integrate carbon metrics into system‑level design alongside traditional considerations like performance and power.
- Informing carbon roadmaps and long‑term planning
More actionable data strengthens Microsoft’s Scope 3 carbon emissions reduction planning, helping teams size interventions, assess tradeoffs, and identify the components—such as memory and storage—that drive the greatest share of embodied emissions.
Looking ahead
Scaling actionable embodied carbon measurement across the ICT sector requires continued improvements in data quality and standardization of carbon accounting frameworks and data exchange. Microsoft is collaborating with other hyperscalers and the ICT sector to align on shared standards for datacenter hardware LCA. Alongside partner methodologies, CHEM is helping shape Product Category Rules (PCRs) and an open, scalable LCA approach through collaborations led by the Open Compute Project (OCP) and the SEMI Semiconductor Climate Consortium (SCC). These efforts aim to harmonize carbon accounting, raise data quality, and enable consistent, actionable measurement of embodied carbon of datacenter ICT hardware to advance global sustainability goals.
Read the white paper How Microsoft is advancing embodied carbon measurement at scale for Azure hardware to dive deeper into CHEM and example applications.
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