Microsoft's AI expansion drives carbon emissions up 25% as 2030 climate deadline approaches

Microsoft struggles to fulfill its 2030 sustainability promise amid carbon-heavy AI expansions -- the company's chief sustainability officer claims the target is still feasible

The company's AI ambition appears to be stifling its sustainability promise Microsoft's emissions for fiscal 2025 (FY25) rose by 25% from the previous year, even as the company's 2030 deadline to become carbon-negative draws closer. According to the company's 2026 Environmental Sustainability Report, released on Thursday, July 9, the backward step was driven primarily by the rapid expansion of its data center infrastructure and its decision to stop using short-term renewable energy certificates, which reduced its reported footprint without necessarily adding new clean electricity to power grids. Microsoft reported approximately 20.3 million metric tons of carbon dioxide-equivalent emissions across its operations and supply chain, up from 16.2 million tons in fiscal 2024 and nearly 58% above its 2020 baseline. Electricity consumption increased by 24% during the year as the company built the computing capacity required for its cloud and AI businesses. Regardless, Microsoft says it remains committed to becoming carbon-negative, water-positive, and zero-waste by 2030. It also reported meeting its 2025 renewable-electricity target, replenishing more water than it withdrew globally, and exceeding several waste-recovery targets The report's foreword, written by Microsoft Vice Chair and President Brad Smith and Chief Sustainability Officer Melanie Nakagawa, focused heavily on the collision between the company's headline sustainability goals and the realities of AI. Microsoft established the goals in 2020, a few years before the current scale of AI's capabilities and the corresponding high environmental demands began to manifest. While AI is inarguably a world-changing technological revolution, it is raising serious environmental concerns that begin right at the raw material sourcing and the complex semiconductor fabrication stages. The impact continues even after the processors have been compiled into supercomputers in massive data centers, with issues related to land use, energy consumption, noise pollution, and water consumption. Residents are increasingly opposing the building of these data centers in their communities due to these issues. Microsoft is exposed at nearly every point of the AI chain. It procures servers and custom AI chips; owns and operates a massive, global network of over 300 data centers across 34 countries that powers the Azure cloud platform; and supplies the computing infrastructure behind products such as Copilot and its partnership with OpenAI. Scope 3 emissions from construction, purchased hardware, suppliers, and other value-chain activities remain the largest part of its footprint. Meanwhile, electricity-related Scope 2 emissions grew from nearly 2% of the total in 2024 to 13% in 2025. Microsoft acknowledges that environmental solutions are not expanding as quickly as AI infrastructure. "This tension is real," the foreword states. "It is forcing sharper questions: Where do we need to move faster, invest differently, or rethink our approach?" The company argues that the answer is not to retreat from AI, but to combine carbon-free electricity, carbon removal, sustainable fuels, lower-carbon construction materials, hardware reuse, and efficiency improvements into a single portfolio rather than treating each environmental target separately. Its decision to stop buying non-additional, unbundled renewable energy certificates forms part of that change. These certificates can allow a company to claim renewable electricity already being generated elsewhere. Microsoft says it will instead prioritize longer-term agreements that help add additional carbon-free generating capacity to the grid, even though doing so will increase its reported emissions in the near term. Its renewable-energy agreements now cover up to 40 GW across 26 countries, with approximately 19 GW operational. The company is also modifying the data centers themselves. It introduced a closed-loop liquid-cooling design that CEO Satya Nadella says enables AI data centers to use about as much water annually as a restaurant. Microsoft is experimenting with microfluidic channels etched into silicon, zonal cooling that reserves colder liquid for the hottest equipment, and lower-carbon concrete, steel, and mass timber for its construction. These efforts have not exactly quelled anti-data-center sentiment around its data centers. The company faced protests over a planned facility near Granger, Indiana, while residents living near its $7.3 billion Fairwater AI complex in Wisconsin have filed a lawsuit alleging persistent noise, dust, traffic, and light pollution. Away from carbon, the report records clearer progress. Microsoft replenished 14.2 million cubic meters of water, exceeding its global withdrawals for the first time, and reduced average data center water-use effectiveness by 25% from its 2022 baseline. It achieved a 92% reuse and recycling rate for retired cloud hardware, diverted 90.5% of construction and demolition waste from disposal, and reduced single-use plastics in primary product packaging to 0.07%. It also legally protected 16,266 acres of land, approximately 36% more than the land estimated to be occupied by its operations. The report is equally candid about where Microsoft is falling behind. The company's most important commitment -- becoming carbon-negative by 2030 -- is moving further away rather than closer. Total greenhouse-gas emissions climbed 25% year over year and now sit roughly 58% above the company's 2020 baseline, largely because AI infrastructure is expanding faster than its decarbonization efforts can offset. Scope 2 emissions also jumped sharply, rising from nearly 2% of Microsoft's footprint in FY24 to 13% in FY25 as electricity demand from new data centers surged. While Scope 3 emissions remain the company's largest source of carbon pollution, the report says the growing contribution from purchased electricity underscores how increasingly difficult it is to power AI infrastructure with clean energy alone. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

AI-driven datacenter builds drive Microsoft's emissions up a quarter in one year

Microsoft says it matched its entire electricity consumption with renewable energy last year. The bad news is it also increased greenhouse gas (GHG) emissions by 25 percent due to datacenter construction. The cloud and software biz has released a 2026 Environmental Sustainability Report [PDF], claiming its environmental sustainability work is entering a new phase due to rapid technological change. A global shift towards AI is reshaping economies, the report claims, which is becoming "foundational" to how technology is built and used. Producing the infrastructure to support AI, however, is also upping demand for energy, water, land, and materials required to support it, Microsoft admits. The foreword, penned by President Brad Smith and Chief Sustainability Officer Melanie Nakagawa, says that "AI can deliver broad societal, economic, and environmental benefits," and "We do not see these dynamics as a reason to step back. We see them as a mandate to lead differently." In 2020, Microsoft set itself the goal of becoming "carbon-negative" by 2030. Its own figures show emissions heading only upwards, from 13 million tons of COequivalent in 2020, to 20 million tons in 2025. However, Microsoft estimates that without the carbon reduction initiatives it has already put in place, emissions would now stand at 34 million tons. We asked Microsoft what this meant for its goal of becoming carbon-negative by 2030. It has yet to reply. As noted previously, Microsoft's rise in GHGs is primarily driven by the expansion of its datacenter infrastructure, though it also points to a decision to stop purchasing non-additional, unbundled renewable energy certificates. The construction spike means that Scope 3 emissions are still the largest part of Microsoft's carbon footprint, but 2025 saw a growing contribution from Scope 2, due to generation of energy the company purchased. These represent 13 percent of total emissions - up from 2 percent in 2024. This underscores the growing role energy systems play in shaping environmental outcomes and why advancing carbon-free energy sources remains critical to long-term progress, the report says. When it comes to water consumption, another hot topic for those living near to datacenters, Microsoft says it focuses on cooling systems, improving water usage effectiveness (WUE), and reducing reliance on municipal water supplies. It claims the facilities it owns and operates achieved a 25 percent reduction in WUE since the 2022 baseline. The exact figures listed in Microsoft's Environmental Data Fact Sheet put the company's total global water withdrawal for 2025 at 13,266 million litres (3,504 million gallons), and total water consumption at 8,170 million litres (2,158 million gallons). For the first time, Microsoft claims to have replenished more than it withdrew during 2025, returning 14,278 million liters (3,771 million gallons). Elsewhere, the corporation says its Circular Centers program reused 92 percent of decommissioned servers and their components. In the past, Microsoft said it tried to cut the emissions from building datacenters by using concrete mixes with lower overall embodied carbon, and it experimented with facilities made out of wood, estimated to produce a carbon footprint 65 percent lower. ®

Microsoft's AI drive saw its carbon emissions grow by 25 percent in 2025 - Engadget

Microsoft's carbon emissions grew 25 percent year over year in 2025, the company has revealed in its 2026 environmental sustainability report. The report covers the company's 2025 fiscal year and measures its progress against its 2020 baseline. Microsoft says this growth in emissions is mostly caused by the expansion of its investments in AI data center infrastructure. As GeekWire notes, Microsoft seems to be moving in the opposite direction of where it wants to go in order to achieve its goal. The company announced in 2020 that it plans to be carbon negative, or to remove more carbon from the atmosphere than it creates, by 2030. It only has four more years to get there. "While AI infrastructure is driving demand for energy, water, land, and materials, sustainability solutions are not scaling fast enough to meet demand," it admits. The company knows it has to refine its "strategies as conditions change, data improves, and tradeoffs become clearer." Microsoft says that it's not lowering its ambitions because AI demands are outpacing sustainability solutions. In which case, the company has a lot of work ahead of it. "We continue to really be focused around carbon negativity by 2030," Melanie Nakagawa, chief sustainability officer, told GeekWire. In addition to AI infrastructure buildouts, another reason why Microsoft reported a 25 percent yoy growth in carbon emissions, is because it stopped buying unbundled renewable energy certificates. One certificate signifies that an entity owns one megawatt-hour of zero-carbon electricity generated by a renewable source and delivered to the grid. Microsoft says its decision increased its reported emissions in the near term, but it enables the company to focus on adding all forms of carbon-free electricity to the grids where it operates rather than just on relying on certificates. "We believe this change will create more long-term sustainability benefits," it wrote. While it admits to emitting more carbon in its report, Microsoft also highlights its successes for the fiscal year of 2025. It says it matched 100 percent of its annual global electricity consumption with renewal energy. The company also replenished more water than it withdrew globally, which pushes the company closer towards achieving its goal to become water positive by 2030.

Microsoft's carbon emissions climb 25% as tech giants grapple with AI's energy toll

Microsoft has just four more years to reach its ambitious goal of removing more planet-warming carbon that it produces. But the company's annual sustainability report, released Thursday, shows it's moving in the opposite direction, as its 2025 emissions spiked 25% over the previous year. Despite the troubling increase, Microsoft leaders say they remain committed to the longer-term goal. "We continue to really be focused around carbon negativity by 2030," said Melanie Nakagawa, chief sustainability officer, in an interview with GeekWire. The Redmond, Wash.-based company is the latest tech giant to fall further behind its climate targets as they invest billions of dollars in new, energy-hungry data centers to power the AI boom. Amazon's carbon footprint jumped 16% last year, while Google's greenhouse gas emissions swelled 18%. The report also shows how much energy use drove that increase: Microsoft's emissions from purchased electricity -- known as Scope 2 emissions -- grew by 25% last year. In total, Microsoft produced 34 million metric tons of carbon dioxide equivalent in 2025. After subtracting the carbon it paid to remove from the atmosphere, that figure drops to a net 20 million tons. That puts the company's footprint roughly on par with the total emissions of Panama or Lithuania. In addition to data center expansion, Nakagawa said, the carbon increase was also driven by Microsoft's decision to stop buying unbundled, short-term renewable energy certificates, or RECs -- a mechanism companies can use to quickly lower their reported emissions for a given year. Microsoft is instead prioritizing longer-term initiatives with bigger impact, she said. The challenge Microsoft wants to answer, she said, is how to take a "portfolio approach" that spans carbon dioxide removal, carbon-free electricity, sustainable materials, and fuels -- addressing all of them together rather than in isolation. Where Microsoft made gains The annual report highlighted areas of success. That includes: * Matching its electricity consumption worldwide with clean energy sources. * For the first time, replenishing more fresh water globally than it withdrew, making important progress on its 2030 goal of being water positive across operations. * Achieving 92% reuse and recycling of decommissioned cloud servers and components for the second consecutive year. * Reaching a total of 40 gigawatts of clean power purchase agreements across 26 countries, with 19 gigawatts currently online. (Forty gigawatts is roughly enough power to serve 30-40 million typical U.S. homes at once.) Scrutiny over recent moves Microsoft's sustainability disclosures come after a series of announcements and news reports that have raised concerns among climate advocates. * Last month, Microsoft and Chevron announced an agreement to build a natural gas facility in Texas with a 2.67 gigawatt capacity, providing dedicated electricity to the tech company for 20 years. * In May, Bloomberg reported that Microsoft was considering scaling down or scuttling a pledge to match its electricity use with carbon-free power around the clock by 2030. * In April, the New York Times reported that Microsoft was pausing future purchases of carbon removal credits, after years as the market's top buyer. Nakagawa said the company has not canceled any canceled removal projects, though she did not provide specifics about new purchases going forward. "We're just continuing to take a hard look at each of the deals that are coming through," she said, and looking for "credible opportunities to scale." Asked about Microsoft's commitment to purchasing clean energy 24/7 -- an approach that would eliminate reliance on coal- or gas-powered energy when wind and solar aren't available -- Nakagawa declined to confirm it. "We still are looking towards opportunities around carbon-free electricity," while focusing on the 2030 carbon negative goals, she said. As to the natural gas deal, the chief sustainability officer said Microsoft has also contracted to purchase 4.7 gigawatts of renewable power in Texas alone and that the company evaluates its energy investments as part of a broader mix. Looking for efficiencies elsewhere Even as data centers remain the prime driver of Microsoft's rising energy use and emissions, the company points to other steps aimed at reducing the environmental footprint of the facilities. That includes increasing the use of lower-carbon steel and concrete and incorporating mass timber into data center buildings. And In the past year, Microsoft has added a seventh Circular Center -- one of several facilities worldwide where the company recycles and reuses electronics from data center operations. Microsoft is also working with developers to use AI models more efficiently and build right-sized products. AI agents can review, test and improve code so it uses less energy when it runs, Nakagawa said. "I definitely think there's an opportunity here," she said.

Datacentres drive emissions of Microsoft, Amazon and Google to half those of France

All three companies say they still aim to achieve net zero carbon output despite construction boom Microsoft, Amazon and Google's collective carbon emissions have increased by nearly a fifth in the past year, driven largely by datacentre construction. In the financial year ending March 2026, the three tech companies emitted 119m mTCO₂e (metric tonnes of carbon dioxide equivalent), or roughly half the emissions of France. The previous year, they emitted roughly 101m mTCO₂e, roughly equivalent to the 2024 emissions of Czechia. The US companies' climate ambitions have been hit in recent years by a boom in demand for cloud services, such as storing data or running servers over the internet, related to training and operating chatbots and other AI products. Cecilia Rikap, an economics professor at University College London, said: "Claims by Microsoft, Amazon and Google about their clouds being ecologically friendly and sustainable are a marketing strategy. Governments should remember these expanding carbon footprints when the very same companies offer addressing the ecological crisis with AI solutions. "And, as migration to their clouds expands, and companies store data and train and use AI models and all sorts of digital technologies, these other companies are outsourcing their own digital/AI carbon footprint to cloud giants. Basically, shifting to the cloud helps other corporations obscure their environmental footprint." Microsoft, Google and Amazon were contacted for comment. These increases were documented in the companies' annual sustainability reports, which they have released over the past weeks. In its report released on Thursday, Microsoft said its carbon emissions had increased by 25% over the past year to 20m mTCO₂e, "driven primarily by the expansion of our datacentre infrastructure". Google said its emissions had increased 18% over the past year, "driven by increases in supply chain activities that supported the rapid expansion of our business". The search company says its AI systems have come up with solutions that have already helped to reduce emissions elsewhere by 41m tonnes of CO last year. Amazon reported a 16% increase in emissions overall, and a 20% increase in supply chain emissions, which included datacentre building and construction. In its report, it still framed this as "making progress" towards its goal of net zero emissions in 2040. The bulk of these emissions come from a big, global push to build the infrastructure for artificial intelligence. The world's biggest tech companies are on track to spend $765bn (£570bn) this year, mostly on building AI datacentres - in locations from Norway to North Tyneside. It is a drastic reversal in a years-long push by big technology companies to cut their carbon emissions. Prior to this year, Microsoft's emissions appeared to have flatlined, at 16m mTCO₂e, in 2023 and 2024. All three companies still say they aim to achieve net zero emissions: Google and Microsoft by 2030, Amazon by 2040. "The increases in total carbon emissions are strongly correlated with [the companies'] AI investment," said Shaolei Ren, a professor of electrical engineering at University of California, Riverside. He noted that Microsoft's sustainability report also suggested that there were fewer carbon credits available on global markets to offset its emissions. "While companies are actively investing in or purchasing carbon credits, the figure suggests a possible lack of credit supply in the carbon market to meet the technology companies' needs ... Everyone is talking about the lack of physical goods and infrastructure like power, but there may also be a lack of virtual goods - carbon credits." Proposals for building datacentres across the global tech sector are becoming more numerous and ambitious as demand for AI tools, and investment by AI companies in the models that underpin them, increases. JLL, a US property consultancy, expects about 1,200 datacentres to be built globally between now and 2030, with demand overwhelmingly driven by AI. The datacentre boom is accompanied by vast projected power demands. The Uptime Institute, which rates and inspects datacentres, estimates that big datacentre projects announced last year would consume 1.3% of the world's electricity usage, or a near-doubling of current datacentre demand. The majority of that new power demand will come from US projects, it said.

Microsoft's AI boom collides with its climate goals

Driving the news: Like its tech peers, Microsoft's environmental impact indicators largely continued moving upward. * Its total greenhouse gas emissions are up 25%, fueled by both its growth in digital infrastructure, especially AI, and changes to the company's electricity procurement strategy. * The company said a key measure of data-center water-use efficiency improved 25% from its 2022 baseline, putting it on track toward a goal of improving that metric 40% by 2030. The big picture: Amazon, Google, Microsoft and Meta account for roughly two-thirds of the data-center power capacity among the top 15 tracked by financial firm Jefferies, meaning their environmental strategies increasingly shape the industry's footprint. State of play: Climate goals established earlier this decade are becoming harder to achieve as AI infrastructure expands. * Microsoft Chief Sustainability Officer Melanie Nakagawa declined to directly reaffirm whether the company remains on track to meet its goal of becoming carbon negative by 2030, instead emphasizing the broader challenge facing the industry. "Many of the sustainability solutions are not scaling fast enough to keep pace with AI infrastructure growth," she said. Stunning stat: Microsoft's reported emissions from purchased electricity jumped 945% between 2024 and 2025, while its electricity consumption increased 24%. * Much of that increase reflects Microsoft's decision to move away from relying on renewable energy certificates from existing projects that don't necessarily spur new clean energy development. * Instead, it says it's moving toward investments that help finance new carbon-free electricity. "This decision shows up as increasing our reported emissions in the near term," said Nakagawa. "But we believe it creates greater long-term environmental value because it actually helps expand carbon-free electricity capacity and generation on the grids that we need it to be in." Between the lines: Microsoft reiterated that it bought enough renewable electricity to match 100% of its annual electricity consumption, a milestone it first announced earlier this year. Yes, but: That annual matching claim exists alongside Microsoft's development of at least two data centers that will rely on natural gas for power, in Texas and West Virginia. * Asked about those projects, Nakagawa said Microsoft balances climate goals with reliability and the need to bring power online quickly as AI demand accelerates. * She noted the company already has several gigawatts of carbon-free electricity in Texas while it also explores "solutions that help address near-term reliability and speed-to-power challenges in regions where grid constraints may limit the pace of development." * The company is "exploring a variety of options for mitigating the emissions associated with these plants," a spokesperson also said. Zoom out: For the first time, Microsoft said that on a global basis, it returned more water to watersheds than it withdrew last year. * Water used to cool data centers can either be consumed or returned to local waterways after use. * While Microsoft's water withdrawals and water consumption have both risen alongside AI growth, the company said its replenishment efforts have grown even faster. Nakagawa said the larger objective remains replenishing water within the same watersheds where it is withdrawn. * Meeting the global milestone, she said, is "a proof point that we have capabilities to deliver replenishment projects at scale." The bottom line: Three annual reports in, the message from big tech is becoming clearer: AI is accelerating faster than many of the sustainability plans companies put in place earlier this decade.

Microsoft's emissions surged 25% in 2025 during data center boom | Fortune

Microsoft Corp. said its carbon emissions climbed 25% in 2025, making it the latest technology company to report a setback in its efforts to erase emissions amid heavy spending on artificial intelligence data centers. The company emitted 20 million metric tons of carbon dioxide equivalent in 2025, up from 16 million metric tons the prior year, Microsoft said Thursday in its annual sustainability report. The increase was driven by new construction of data centers and a previously announced pause in the purchase of some renewable energy credits, Microsoft said. "While AI infrastructure is driving demand for energy, water, land and materials, sustainability solutions are not scaling fast enough to meet demand," Microsoft President Brad Smith and Chief Sustainability Officer Melanie Nakagawa wrote in the report. "This tension is real, and it is also productive." The software company pledged six years ago to pull more carbon from the atmosphere than it was emitting by 2030, a goal made feasible thanks to increasingly efficient data centers and surging investment in renewable power and technologies designed to sequester carbon. But the company's green ambitions ran headlong into its commercial aims. Determined to become a major player in the artificial intelligence age, Microsoft helped spark a frenzy to build a new class of power-hungry data centers to back AI models, straining electrical grids and pushing utilities to build new fossil-fueled power generation. In one example, the company in June signed a deal with Chevron Corp. to take power from an enormous natural-gas-fired power plant set to be built in West Texas, and use it to power a new data center complex. At the same time, the company reassessed efforts to offset its emissions, telling sustainability partners that it would pull back from new carbon-banking deals. Executives also weighed shelving a target that would have had Microsoft match its hourly data center electricity use with renewables. Other businesses have retreated from their own pledges as the US federal government rolled back environmental standards and sought to curb sustainability initiatives. Microsoft said its emissions would have been lower but for a decision last year to halt its purchase of a type of carbon credit that is controversial in environmental circles because it doesn't directly incentivize new carbon-free energy. Smith and Nakagawa said the company wants to be "more precise" about what sustainability requires and more willing to refine its strategies "as conditions change, data improves and trade-offs become clearer. It does not mean we are lowering our ambition."

In the AI race, Microsoft's emissions jump

The Seattle Times' Climate Lab explores the effects of climate change in the Pacific Northwest and beyond. The project is funded in part by the Bullitt Foundation, CO2 Foundation, Jim and Birte Falconer, Mike and Becky Hughes, Henry M. Jackson Foundation, Martin-Fabert Foundation, Craig McKibben and Sarah Merner, Mary Snapp and Spencer Frazer, University of Washington, Walker Family Foundation and Kristi and Tom Weir, and its fiscal sponsor is Seattle Foundation. The Seattle Times maintains editorial control over all its coverage. Microsoft's climate-warming emissions jumped last year as the company raced to build data centers powering artificial intelligence, increasing how far the company must go to meet its pledge to become carbon negative by 2030. The Redmond-based tech giant reported 21 million metric tons of greenhouse gas emissions in fiscal year 2025, up from about 17 million the previous year -- a roughly 27% increase. The increase was largely driven by Microsoft's rapid and very expensive data center buildout, the company said, along with its decision to stop relying on short-term renewable energy certificates that had previously helped lower its reported emissions. Microsoft isn't alone among tech giants seeing its climate targets strained by rapid AI growth. Amazon's emissions increased 16% last year. Google's climbed 18%. Microsoft says it remains committed to becoming carbon negative, water positive and zero waste by 2030. But with four years remaining, its emissions are substantially higher than when it made those pledges in 2020. And it plans to keep building. Microsoft said it would spend a record $180 billion this year on capital projects, largely new data centers. Chief Sustainability Officer Melanie Nakagawa declined to say whether she is worried Microsoft will miss the 2030 carbon-negative target, saying progress "isn't going to be linear" and that the company is focused on whether its efforts are working to change its trajectory. In its sustainability report, Microsoft acknowledged that AI is increasing demand for "energy, water, land, and materials," and said sustainability solutions are "not scaling fast enough to meet demand." "We expected these growth-related pressures," Nakagawa said in an interview. The largest source of Microsoft's emissions increase was from capital goods, which includes everything from server equipment and computer chips to concrete and steel. Emissions from that category rose from 6 million metric tons of carbon dioxide to 9 million. About 86% of Microsoft's carbon footprint came from indirect emissions -- from things the company buys, sells and relies on outside its own operations. Energy use in the company's data centers also played a role. Microsoft's electricity use is more than three times what it used in 2020 and has climbed to 37 million megawatt-hours in fiscal year 2025, up from 30 million the year before. The company has touted that it's matched 100% of its annual energy consumption with renewable power, meaning it bought or contracted enough renewable energy over the year to equal its total electricity use. But in Asia and parts of Europe, the Middle East, and Africa, Microsoft couldn't procure enough clean energy. That meant this type of emission jumped from 259,090 metric tons to 2.7 million. Clean energy, Nakagawa said, is not equally available in every region where Microsoft operates, particularly in parts of Asia. Previously, Microsoft had used renewable energy certificates to offset that in its accounting, but Nakagawa said the company was shifting its investments toward longer-term projects to add new clean power to electric grids. Microsoft said it is trying to reduce its impact through lower-carbon concrete and steel and supplier decarbonization. But the company said that many of the hardest emissions to cut sit outside its control. Microsoft's water use also rose by more than 1 billion liters to 13 billion total liters withdrawn. About half of those withdrawals came from areas with high or extremely high water stress, according to the company's data fact sheet. The company said it replenished more than 14 billion liters of water globally, surpassing its worldwide withdrawals for the first time. Water replenishment projects can look like helping farms or businesses use less water through more efficient irrigation or restoring wetlands and streams so they hold more water. But Microsoft acknowledged that global replenishment alone is not enough and said its next phase will focus more on restoring water in the local watersheds where it operates.

Microsoft emissions surge 27% as AI buildout crimps climate goals

Microsoft's greenhouse gas emissions jumped 27 percent in its latest fiscal year, the tech giant disclosed Thursday, adding to a wave of worsening environmental reports from an industry racing to build AI infrastructure. The disclosure follows similar reports from Google and Amazon last week showing emissions surging 18 percent and 16 percent respectively, as all three companies acknowledged that AI infrastructure expansion is outpacing their decarbonization efforts. Microsoft's greenhouse gas emissions jumped 27 percent in its latest fiscal year, the tech giant disclosed Thursday, adding to a wave of worsening environmental reports from an industry racing to build AI infrastructure. Total emissions reached 21.1 million metric tons of carbon dioxide equivalent (mtCO2e) in the fiscal year ending June 30, 2025, up from 16.7 million the prior year, according to the company's 2026 Environmental Data Fact Sheet. The disclosure follows similar reports from Google and Amazon last week showing emissions surging 18 percent and 16 percent respectively, as all three companies acknowledged that AI infrastructure expansion is outpacing their decarbonization efforts. Like its rivals, Microsoft now pollutes more for every dollar it generates in revenue. Its emissions intensity rose to 75.0 mtCO2e per million dollars of revenue from 68.1 the prior year -- the first increase in at least six years -- even as revenue grew 15 percent to $281.7 billion. The spike was driven in large part by a tenfold surge in Scope 2 market-based emissions -- those tied to purchased electricity -- which ballooned from 259,090 mtCO2e to 2.7 million mtCO2e. Microsoft attributed the jump partly to its decision in February 2025 to stop purchasing "spot" energy attribute certificates and carbon removal credits, instruments that had previously been used to offset emissions in the company's accounting. The company said the policy shift reflected a "commitment to high-integrity climate action," acknowledging it would "temporarily move us out of a carbon-neutral position." Water consumption climbed 22 percent to 8,170 megaliters, with half of all water withdrawals coming from areas classified as having high or extremely high water stress. The reports from Microsoft, Google and Amazon underscore warnings from the United Nations, which found earlier this month that data centers worldwide use so much energy that only 10 countries each consume more. UN Secretary-General Antonio Guterres launched an AI Environmental Transparency Initiative during London Climate Week on June 23 and urged every major AI company to commit to powering all data centers with renewable energy by 2030. "If AI is to help build a better future, it must be honest about what it costs us now," Guterres said.