Microsoft: How Microsoft is Boosting Data Centre Component Circularity

As digital transformation continues to drive infrastructure demand, Microsoft is not just scaling its cloud - it's reshaping the environmental footprint of the data centre industry. Microsoft may be a giant in the tech space, but its dominance in the sustainability realm should not be overlooked. The company's attitude toward sustainability has changed the fabric of the company in recent years, with AI's rise having a direct influence on Microsoft's sustainability strategy . Microsoft's circularity strategy Its technology is also boosting the sustainability of businesses regardless of industry, including insurance group Howden, and supports startups through Project Amplify, providing access to technology and expertise for social impact and sustainability projects. But Microsoft 's latest achievement is internal: achieving a 90.9% reuse and recycling rate for servers and components in 2024 - a full year ahead of its 2025 target. This is a significant milestone in its ambitious journey toward sustainability. "Zero waste by 2030 is a cornerstone of our sustainability strategy, along with becoming carbon negative, water positive and protecting more land than we use," comments Rani Borkar, Corporate Vice President, Azure Hardware Systems and Infrastructure. "This recent milestone, driven by a culture of innovation and cross-functional collaboration, reflects the growing momentum to integrate zero waste and circularity practices across the technology industry." This achievement not only marks a pivotal step in Microsoft's goal to become a zero-waste company by 2030, but also sets a new benchmark for the tech industry on how innovation, circularity and supply chain resilience can - and do - go hand-in-hand. "By redesigning systems to reduce waste, then reusing and recovering materials wherever possible, we're saving costs, gaining efficiency and discovering new opportunities for hardware and infrastructure components," Rani adds. Rani continues: "As we build on progress over the past five years, we're excited to continue accelerating circularity practices across our business. "Preventing waste remains the core of our zero-waste strategy. In addition, we're continuing to invest in expanding markets for circular solutions and collaborating with local organisations to support circularity in the communities where we operate and work." How did Microsoft achieve this? By working alongside recovery partners and suppliers, Microsoft is advancing the sustainability of its cloud supply chain - thus taking strides toward its zero-waste target - in three key areas: Piloting the sustainable extraction of rare earth minerals from hard disk drives at scale Co-creating recyclable packaging solutions for transporting data centre hardware Continuing to expand its Circular Centers around the world At the heart of Microsoft's progress are its Circular Centers - specialised facilities designed to process decommissioned data centre hardware, maximise reuse and recover valuable components. Since opening its first Circular Center in Amsterdam in 2020, Microsoft has expanded the programme to five additional sites across the US, Ireland and Singapore, with new centres planned for Cardiff, Wales, as well as New South Wales, Australia and San Antonio in Texas, USA. "By redesigning systems to reduce waste, then reusing and recovering materials wherever possible, we're saving costs, gaining efficiency and discovering new opportunities for hardware and infrastructure components," Rani adds. As a result of this approach, Microsoft successfully reused more than 3.2 million components through internal and external channels in 2024 - a 30% increase or more in value recovery through its Circular Center programme. Microsoft's circular centers Microsoft's Circular Centers are more than just recycling hubs. They sort, test and channel servers and components for internal reuse, resale, or donation to skills training academies, ensuring that hardware gets a second life wherever possible. Microsoft's Cardiff Circular Center, for example, is set to boost the UK's green economy by partnering with local recyclers, logistics providers and training organisations, creating jobs and advancing regional skills development. As well as this, the centres do the obvious: help close the loop when it comes to critical materials. At these centres, Microsoft is recovering rare earth elements (REEs) and precious metals from end-of-life hard disk drives (HDDs). In collaboration with recycling partners Western Digital, Critical Materials Recycling and PedalPoint Recycling, Microsoft has processed approximately 50,000 pounds of obsolete drives using an acid-free, environmentally friendly process. This method achieves a 90% yield in recovering neodymium, praseodymium, dysprosium, gold and copper, to name a few - all of which are materials essential in areas such as electronics and clean energy. "What stands out most to me about this achievement is the creativity and innovation that made this possible," comments Melanie Nakagawa, Microsoft's Chief Sustainability Officer. "Through material recovery - extracting valuable components from discarded products and putting them to work in new ways, like memory chips and motherboards - we're not just reducing waste, we're conserving resources and lowering emissions. "It's proof that circularity is both possible and impactful and can benefit the triple bottom line of people, planet, profit." Mining is a sector notorious for its environmental impact and Microsoft's approach is reducing the need for new mining while slashing emissions by 95%, compared to traditional extraction methods. By keeping the entire process domestic, Microsoft minimises transportation emissions and strengthens the resilience of local supply chains - something that often relies heavily on imports for rare earth materials. Setting industry standards "Scaling these practices across all our operations is our next step, and I'm inspired by the support of our many partners as we continue transforming our approach to waste management," says Melanie. "Together, we're creating lasting impact and shaping a brighter, more sustainable future." But here's where Microsoft really makes an impact - by serving as a blueprint for sustainability in the broader tech industry. With demand for rare earth metals growing at 9% annually and the global market projected to reach US$16.3bn by 2030, scalable solutions for recovery and reuse are urgently needed. Here, Microsoft shows that circularity can be economically viable, environmentally impactful and socially beneficial. Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE . Discover all our upcoming events and secure your tickets today. Sustainability Magazine is a BizClik brand