Microsoft Launches $1 Billion Fund to Erase Five Decades of Carbons Emissions

Microsoft has thrown down the climate change gauntlet to its tech sector rivals with plans to launch a $1 billion fund and erase five decades worth of carbon emissions - past and future - linked to the world's biggest computing and software company.

Microsoft Corp.  (MSFT) - Get Report shares extended gains Friday, rising to a fresh record high, after the tech giant pledged to erase nearly five decades of carbon emissions with the help of a $1 billion 'Climate Innovation Fund".

CEO Satya Nadella said climate change would have a "devastating" affect on the world economy if global temperatures continue to rise, and vowed to cut carbon emissions from the company's supply chain in half by 2030. By 2050, Microsoft said, it will have removed all the emissions its created -- both directly and indirectly -- since it was founded by Bill Gates and Paul Allen in 1975.

 "If the last decade has taught us anything, it's that technology built without these principles can do more harm than good," Nadella told a media event in Redmond, Washington. "This is the decade for urgent action for Microsoft and all of us, We must begin to offset the damaging effects of climate change."

Microsoft shares were marked 0.1% higher in early trading Friday to change hands at $166.22, after hitting an all-time high of $167.46 in a move that  would extend the stock's six-month gain to around 22.5% and peg its market value at around $1.3 trillion. 

Microsoft's Climate Innovation Fund hopes to spur investment, including debt financing, into the development of carbon removal technology. Capture and reuse could be one investment target, Microsoft President and Chief Legal Officer Brad Smith intimated, who also noted plans to have its global buildings and data centers running entirely on renewable energy by 2025. 

Microsoft will also make carbon reduction a factor in its procurement deals. as of next year and plans to launch an Azure Sustainability Calculator that will allow cloud customers to monitor their own carbon footprints.

Microsoft said it will likely emit 16 million metric tons of carbon this year, a small portion of the estimated 43.1 billion metric tons that were released inot the atmosphere last year, according to recent forecasts from the Global Carbon Project.

Earlier this week, Larry Fink, CEO of BlackRock  (BLK) - Get Report, the world's biggest fund manager, predicted a "fundamental reshaping of finance" and urged companies to make rapid and tangible changes to their environmental policies.

"We don't yet know which predictions about climate change will be most accurate nor what effects we have failed to consider. But there is no denying the direction we are heading," Fink said in his annual letter to shareholders. "Every government, company and shareholder must confront climate change."

TheStreet's founder, Jim Cramer, said Microsoft's plans -- by far the most aggressive of any global company -- remind him of the previous era of a heavy-handed Environmental Protection Agency.

"I get a real sense of urgency from Microsoft," Cramer told his Mad Money audience on CNBC last night. "There’s a titanic struggle going on here; corporations are re-thinking their entire purpose, including the hard science of what Nadella called the devastation of the environment by cutting the carbon cord."

"You want their business? Build some wind turbines and solar panels," Carmer said. "If not, they’re going to take their data centers and put them somewhere else."