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|A Microsoft logo (photo AFP)|
The company said the initiative would by 2050 remove from the environment all the carbon emissions it has created since it was founded in 1975.
"The scientific consensus is clear - the world today is confronted with an urgent carbon crisis," Microsoft chief executive Satya Nadella said while unveiling the initiative.
"If we don't curb emissions and temperatures continue to climb, science tell us the results will be devastating."
Microsoft, one of the world's most valuable companies, said it has been carbon neutral since 2012 but that "neutral is not enough to address the world's needs" to fight the effects of climate change.
Several tech companies, including Google and Apple, have committed to carbon neutrality and Amazon has said it would meet that goal by 2040. But efforts to reduce the impact of carbon emissions have been rarer.
The British-based utility Drax said last month it would become the first company in the world to be carbon negative - removing more carbon dioxide from the atmosphere than it creates, by 2030.
NEW CLIMATE FUND
Microsoft said it will invest US$1 billion during the coming four years through a new "climate innovation fund" dedicated to backing technology for carbon capture and removal.
"We deeply understand this is just a fraction of what is needed to solve this problem," said Microsoft chief financial officer Amy Hood.
"We hope that by doing this we will set an example for both governments and other companies to invest along with us to solve this problem."
The fund will invest in technology already being developed and in promising new ideas for combating climate change, according to Hood.
Those investments are expected to include putting money into "risky" developing markets and could include acquisitions, according to Microsoft, which also planned to work with its customers around the world on reducing carbon emissions.
Microsoft will begin publishing annual reports on carbon emissions, and encouraged other companies to do the same. Internally, the company has put a price on carbon emissions associated with products or services, and it urged others to do likewise.
Ideas put forward at the unveiling included adding carbon emission amounts to products in a manner akin to nutrition labeling on food so consumers can factor that into buying decisions.
"Shouldn't people around the world be able to understand the carbon emission of a product when making purchasing decisions?" chief legal officer Brad Smith asked.
"Think of what that would do to incentivise businesses."
Microsoft will also use "its voice" to advance public policies and remove regulatory barriers when it comes to technology that fights climate change, according to Smith.
The move comes amid growing concerns that climate change is accelerating, and data showing the past decade was the hottest on record.
"It's a bold bet, to solve a big problem," Smith said.
"The ultimate moonshot is to preserve this planet. No individual, company or country can solve this by itself, but at Microsoft we will do our part and more."