Water has become a big issue for Big Tech. But Microsoft has a plan

When Brian Janous started at Microsoft in 2011 as a data center utility architect, he joined at a time when energy and sustainability issues were still nascent.

"I was the first person that was brought into the organization to work on energy and sustainability issues. This was back in the time when it … certainly wasn't clear to me why a company like Microsoft even needed someone like me," Janous told CNBC by phone.

"And the person that was hiring me, (said), 'I really think this whole cloud thing is going to be a big deal. And I think energy is going to be really important to the future of our company.' And he was clearly correct. Obviously, over the last several years, as the cloud has really exploded, energy and our environmental footprints have become increasingly important issues," he added.

The U.S. government estimated that data centers in the country used around 70 billion kWh of electricity in 2014, which equates to about 1.8% of the country's total consumption, and the figure is set to reach approximately 73 billion kWh of energy in 2020.

Nine years after he joined Microsoft, Janous has risen to become the company's general manager of energy and sustainability. Expanding its green ambitions to its supply chain meant the company went from having a "handful" of people overseeing sustainability to having teams think about environmental issues "as a core function," Janous said. Efforts culminated in January, when Microsoft announced its goal to become carbon negative by 2030.

Last month, it also announced that it would replenish more water than it consumes by 2030, focusing on 40 "highly stressed" basins where it operates. It's not the first tech company to make such an announcement — in May, Intel pledged to become net positive for water use by the end of the decade. And water use is a global issue: The U.N. estimates that the world is using six times more water now than it was 100 years ago and use is going up by about 1% annually. The U.S. government estimates that data centers would use 660 billion liters of water in 2020, that's enough to fill 264,000 Olympic-sized swimming pools.

Microsoft now makes more than 36% of its revenue from its Commercial Cloud group — up from 10% in 2016 — and it's working on ways to make the data centers (that provide those cloud computing products) more energy efficient, from putting them under water to testing hydrogen fuel cells for backup power. Azure, Microsoft's public cloud network, is delivered via more than 60 data center regions, including one in Arizona — one of the driest states in the U.S. — that will open in 2021.

"We actually design our data centers to be incredibly water efficient. The vast majority of the time, even in places like Arizona, we use no water for cooling, we cool our data centers with outside air," Janous explained. It's only when temperatures reach about 85 degrees Farenheit that water has to be used, he added, and Microsoft uses evaporative cooling technology, which is similar to domestic air conditioning.

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Digital water

One issue with understanding areas under water stress is that data isn't always digitized or accessible. Many parties are involved in providing water to homes or businesses and there are multiple departments involved that don't always share information with each other, according to a 2019 report by the International Water Association.

Via its AI for Earth program, Microsoft has provided a grant to the Leadership Counsel for Justice and Accountability, to work on software to better predict levels and accessibility in the drought-threatened Central Valley region of California. The Leadership Counsel is using Azure to create a dashboard to provide estimates on the availability of drinking water and the affect extreme drought has on its availability.

Companies that use data in water management are a focus for growth accelerator Elemental Excelerator, which invests in businesses that tackle climate change in a variety of sectors. Each year, it has around 800 applicants to its program, three of which were selected for its current water sector cohort, announced last week.

One of them is NEER, a technology platform that manages water using machine learning to help predict and prevent events such as floods or leaking pipes, working across drinking water, stormwater and sewer infrastructure. In the U.S., one estimate put the cost of repairing water main breaks at $2.6 billion a year.

"Instead of … if a pipe is leaking (and) running around to plug it, you can take a more active approach to understand exactly where your system failures may come, and how to best use the capital and time that you have at hand to prevent and preserve the existing infrastructure," explained Kim Baker, Elemental Excelerator's director of water innovation, who spoke to CNBC by phone.

Baker agrees that there has historically been an increased focus on carbon footprint over water management by corporates, but announcements by firms such as Microsoft and Intel help to raise issues. "One of the gaps we saw at Elemental is how to tell the story for that public consumption, how to remove the technical jargon … in such a way that corporate leaders (and) sustainability teams can grab a hold of that and have some sort of human connection to water, wastewater, stormwater, whatever it may be. It is the foundation of life," she stated.

Technology can be a solution to water issues, but any initiative needs to have public support, Baker added. "(Microsoft) is doing the right thing, which is using the data they have to drive the process. The next step for me is to ground that process in the communities where this work is going to take place, followed by stakeholder engagement to catalyze whatever installation or technology demonstration they're going to do, to translate that work into lasting business opportunities," she told CNBC.

For Janous, the hard work to achieve Microsoft's climate goals is just getting started: "It's great to set these ambitious targets, but now we actually have to really get to work … how can we keep pushing the envelope to ensure that we have the greatest impact, inside of these commitments that we've made?"

• CNBC's Jordan Novet contributed to this report

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