Microsoft updated its Cloud for Sustainability to aid organizations in centralizing and standardizing complex environmental, social and governance (ESG) data estates as sustainability regulations loom on the horizon.

The EU's pending Corporate Sustainability Reporting Directive (CSRD), for example, will require any organization doing business in the EU to provide detailed reporting that includes greenhouse gas (GHG) emissions impact, emissions reduction strategy, social impact and ESG risks or opportunities to the business and the planet.

"There are very few organizations that have the ability to truly source and analyze the range of data that is needed to accelerate our progress," Microsoft Chief Sustainability Officer (CSO) Melanie Nakagawa said during a press briefing. "So we're investing to help create the data estates needed."

To support enterprise customers in meeting upcoming regulations, the hyperscaler introduced Project ESG Lake as an extensible analytical data model designed to organize ESG data, improve data governance and leverage artificial intelligence (AI) to generate actionable insights. The new Project ESG Lake offer will allow enterprises to calculate all fifteen categories of scope 3 greenhouse gas (GHG) emissions in addition to the scope 1 and scope 2 emissions measurement capabilities available in Microsoft Cloud for Sustainability.

As organizations are preparing for water- and waste-related reporting regulations, Microsoft introduced capabilities for customers to "record, track, analyze and report water usage data," Microsoft Corporate VP of Industry Clouds Satish Thomas added. To that point, Cloud for Sustainability now includes prebuilt reporting templates that organize and track data for various ESG reporting regulations, starting with CSRD and eventually extending to future reporting standards.

If enterprises have sustainability data from other sources, they can bring it to Microsoft "in the furtherance of moving the needle and understanding more of their scope 3 emissions," Thomas explained. "This is the day that we've been working toward for many, many, many long days," he said.

Microsoft teased a Cloud for Sustainability feature currently in development: an AI-powered "what-if analysis" that pushes customers and partners to use data to forecast possible scenarios based on different potential manufacturing, energy source or materials factors throughout the supply chain. "This will help [customers] make more impactful decisions," Thomas said.

The hyperscaler also plans to introduce an AI-powered anomaly detection feature before the year's end, which is designed to discover outliers, trends and correlations between data and calculated emissions in an interactive fashion.

As the world strives for net-zero, "we know that to reach not only our commitments, but frankly, what governments have set for themselves [and] other corporations have set for themselves, we need a partnership among customers, government and civil society," Nakagawa said. "It really isn't about one company or one sector. It's really about all of us doing this together."