Microsoft: Driving Greater Data Centre Circularity

Microsoft may be a giant in the tech manufacturing space, but its dominance in the sustainability realm should not be overlooked.

The company’s attitude toward sustainability has changed the fabric of its business in recent years, with AI’s rise having a direct influence on Microsoft’s sustainability strategy.

Its technology is also boosting the sustainability of businesses regardless of industry, including insurance group Howden. It also 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.

Melanie Nakagawa, Microsoft’s Chief Sustainability Officer, says: “This milestone reflects our dedication and is just one piece of reaching our goal of zero waste by 2030.”

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.

Microsoft’s Circular Center strategy

“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,” Rani Borkar, Corporate Vice President, Azure Hardware Systems and Infrastructure says.

“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.”

So how did Microsoft make this achievement happen?

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.

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.

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.”

What sets Microsoft's Circular Centers apart?

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 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.

Melanie says: “What stands out most to me about this achievement is the creativity and innovation that made this possible. 

“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 infamous for its environmental consequences, and Microsoft’s strategy is significantly reducing the need for new mining while cutting emissions by 95%, compared to traditional extraction methods. By keeping the entire process within the UK, Microsoft limits transportation emissions and bolsters the resilience of local supply chains – an area that often depends on imports for rare earth materials.

Setting industry standards

Melanie concludes: “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. Together, we’re creating lasting impact and shaping a brighter, more sustainable future.”

Where Microsoft truly stands out is in its role as a model for sustainability across the wider tech industry. With demand for rare earth metals increasing by 9% annually and the global market expected to reach US$16.3bn by 2030, scalable solutions for recovery and reuse are more critical than ever. In this area, Microsoft demonstrates that circularity can be economically viable, environmentally impactful and socially beneficial.

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