The science is clear that environmental sustainability must factor in a corporation's growth plans, or the capitalist and economic system the U.S. enjoys "will fundamentally be in jeopardy," Microsoft CEO Satya Nadella told CNBC Thursday.
"The corporation's purpose is to find profitable solutions to the problems of people and planet," he said in a sit down with Jim Cramer on "Mad Money," citing author and University of Oxford business professor Colin Mayer. "'Profitable' is the key word, but 'problems' is the other key word for people and planet."
The comments came after Microsoft, the world's largest software company, announced an ambitious green plan intended to eliminate its carbon footprint and remove the amount of carbon it has emitted over the decades.
Climate change has emerged as a top global concern and many executives are rolling out new models to become more eco-friendly. Microsoft wants to be carbon negative by 2030. By 2050, the company's goal is to remove as much carbon from the atmosphere as it produced since it was founded in 1975.
"So I think what happens is if you're creating a lot of profit and creating more problems for planet or people, I think it'll catch up with you," Nadella said. "I'm always saying our shareholders are the ones who are giving us permission to be able to think about [this] ... and therefore we are accountable to them to execute on these commitments that we are making, and that's good for business."
Microsoft said the effort will demand development of new technologies by 2030 that do not exist today. The company is creating a "Climate Innovation Fund" of $1 billion to invest in carbon-removal technology over the coming years.
More and more companies are putting out sustainability goals at a time where President Donald Trump has tapped the brakes on a number of the country's climate initiatives, such as pulling the U.S. out of the multilateral 2017 Paris Agreement. Last year, almost 200 chief executives who were part of the Business Roundtable, made a pact to change the "purpose of a corporation" to take social, economic and environmentally issues into account just as much as shareholders.
Investors historically have thumbed their noses when companies make moves that could impact their bottom line negatively, but sustainable-focused investing has been heating up on Wall Street in recent years as the public increasingly demand officials and executives reduce their impact on the planet. Earlier this week, BlackRock, the world's largest money manager, made sustainability its "new standard for investing" in an annual letter to executives from CEO Larry Fink.
Microsoft's CFO Amy Hood, appearing alongside Nadella later in the interview, said the eco-friendly program along with the company's $750 million commitment to affordable housing in Seattle, Washington "are good return investments."
She stopped short of projecting what the return on investment in these initiatives would be, but explained that it will be measured and the company will hold itself accountable.
"I take a very long-term view. I think that's one of the things that we've prided ourselves on, whether that's investing in the region through the housing or whether the announcement this morning on climate," Hood said. "I mean, these are fundamentally issues of business return and I look at that ... quite closely."
Microsoft is the second largest company in the U.S. with a market value of $1.27 trillion, just behind Apple. Apple, Microsoft and Alphabet make up the three companies trading on Wall Street that are worth more than $1 trillion.
On Thursday, Microsoft shares advanced almost 2% to an all-time closing high of $166.17.
Disclosure: Cramer's charitable trust owns shares of Microsoft, Apple and Alphabet.