Microsoft (MSFT) And BP Sign Major Sustainability Partnership

By Amit Chowdhry ● September 15, 2020
  • Microsoft Corporation (NASDAQ: MSFT) And BP plc (NYSE: BP) announced that they have formed a strategic partnership to drive digital energy innovation and advance net-zero goals

Microsoft Corporation (NASDAQ: MSFT) And BP plc (NYSE: BP) announced that they have formed a strategic partnership to drive digital energy innovation and advance net-zero goals. This deal includes a co-innovation effort focused on digital solutions, the continued use of Microsoft Azure as a cloud-based solution for bp infrastructure, and bp supplying renewable energy to help Microsoft meet its 2025 renewable energy goals.

Earlier this year, bp had announced its plans to become a net-zero emissions company by 2050 or sooner and to help the world reach net zero. And by the end of the decade, it aims to have developed around 50 gigawatts of net renewable generating capacity – a 20-fold increase on what it previously developed, increased annual low carbon investment 10-fold to around $5 billion, and cut oil and gas production by 40%.

In January 2020, Microsoft had announced its goal to be carbon negative by 2030 and remove more carbon from the environment than it has emitted since its founding by 2050. This announcement builds on the potential that both companies see in working together to help deliver a net-zero carbon future.

In terms of co-innovation, a memorandum of understanding (MOU) signed by bp and Microsoft recognizes the capabilities that each company can provide to accelerate progress towards their sustainability goals and help the world decarbonize. And their co-innovation effort will initially be focused on four areas that combine Microsoft’s digital expertise with bp’s deep understanding of energy markets:

1.) Smart and clean cities – identifying synergies between Microsoft’s “Smart Cities” initiative and bp’s “Clean Cities” vision with a goal of finding areas for strategic collaboration to help cities achieve their sustainability aims.

2.) Clean energy parks – co-development of innovative and clean energy parks with an ecosystem of low carbon technologies like carbon capture use and storage (CCUS) to prevent or reduce emissions.

3.) Consumer energy – exploring innovative ways to harness the power of data-driven, personalized, and actionable insights to empower energy consumers to manage their home energy use and reduce carbon emissions.

4.) Industrial Internet of Things (IoT) solutions – Delivering an “intelligent edge” of capabilities to bp production and operations facilities.

For bp and Microsoft, low carbon is part of a wider sustainability agenda and they aim to deepen collaboration in this area over time.

As part of bp’s cloud-first IT approach, the company extended its agreement to use Microsoft Azure cloud services as a strategic platform. And this expands on bp’s existing relationship with Microsoft — which helped accelerate the digitization of bp infrastructure and operations while Microsoft 365 enabled greater collaboration and remote working productivity during the COVID-19 response.

Tapping into the Microsoft Azure cloud enables bp to access a broad and deep portfolio of cloud services, including machine learning with Azure Digital Twins, data analytics, security, greater insights, drive significant optimization opportunities, and transform business processes.

bp is supplying renewable energy to help power the Microsoft cloud

Microsoft and bp also signed a framework agreement for renewable energy projects that aims to provide renewable energy to help power Microsoft’s data centers. And bp will supply renewable energy to Microsoft across multiple countries and regions including the US, Europe and Latin America. This agreement contributes to Microsoft’s 100% renewable energy goal by 2025.

This partnership reflects the environmental and economic benefits of companies like bp and Microsoft working together to drive a more sustainable future.

KEY QUOTES:

“bp is determined to get to net zero and to help the world do the same. No one can do it alone – partnerships with leading companies like Microsoft, with aligned ambitions, is going to be key to achieving this. By bringing our complementary skills and experience together, we are not only helping each other achieve our decarbonization ambitions but also creating opportunities to support others on their journey towards reducing carbon emissions.”

— William Lin, bp executive vice president for regions, cities and solutions

“bp shares our vision for a net zero carbon future, and we are committed to working together to drive reductions in carbon emissions and fulfil demand with new renewable energy sources. A strategic partnership such as this enables each organization to bring its unique expertise for industry-leading change and the potential to positively impact billions of lives around the world.”

— Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business

Disclosure: I own a small number of Microsoft shares.