Microsoft Discourages Corporate Travel by Raising Own Carbon Fee 600 Percent

It might be a deterrent to employees when they think about their next trip, but it is more a wake-up call to airlines to go green.

Matthew is the son of Matthew.

It's not the hotel rates or air fares that matter, it's the cost of traveling for business at Microsoft. The internal penalty the technology giant charges itself is set to increase by 567 percent later this year.

Microsoft is taking aggressive measures to cut down on Scope 3 emissions, with business travel falling under this category.

The business travel fee will go up to $100 per metric ton in July 2022. The money is set aside for the company to become a green company.

The company said that they are restructuring and increasing their internal carbon fee to help incentivize more aggressive measures to reduce Scope 3 emissions.

Microsoft wants to become a carbon negative, water positive, zero waste company by the year 2030, and by collecting more money with this boosted carbon tax, it can better support the purchase of sustainable aviation fuel. Scope 3 emissions represent the majority of an organization's total greenhouse gas emissions, and growing numbers of companies are looking to slash their carbon footprint. They can surpass Scope 1 or 2 emissions if they are calculated based on electricity consumption.

To meet our FY30 goals in an increasingly competitive market, we will continue to increase the annual fee at an accelerated rate, which will also help promote energy efficiency and design changes that utilize.

Is Microsoft not being fair to the travel industry? According to one expert, probably not. The move is designed to discourage staff from traveling, but it encourages airlines and hotels to offer more eco-friendly options.

Tom Wood, carbon accounting lead at Emitwise, said that the hike in the internal charge for business travel serves to change company behavior towards less or lower-carbon travel and accommodations.

This initiative is preparing Microsoft for the future when governments will impose carbon taxes. Big business and their investors are looking at initiatives like this from Microsoft as an essential means to reduce their climate-related financial risks.

When Bill Gates predicted the number of business trips would go down, he divided opinion. Maybe he has a point about the company he co-founded.