Microsoft’s 2026 Environmental Sustainability Report shows its 2025 greenhouse gas (GHG) emissions rose 25% year-on-year, mainly driven by AI infrastructure expansion and strategic adjustments to its clean energy framework. The company’s Scope 2 emissions from purchased electricity surged nearly tenfold and accounted for a substantially higher share of total emissions. Meanwhile, Scope 3 emissions, which constituted 85.8% of Microsoft’s overall carbon footprint, increased by around 12%, largely attributable to data center expansion and capital goods-related emissions.
Microsoft has discontinued purchases of non-additional, unbundled renewable energy certificates and spot Energy Attribute Certificates (EACs). Moving away from certificate-based offsetting, the company is prioritizing investments in new carbon-free energy development. Although this policy shift raises near-term reported emissions, it is intended to generate more credible and sustainable long-term decarbonization outcomes. Its renewable energy portfolio has expanded from 34 GW to 40 GW, with the company adopting a holistic decarbonization strategy to scale up diverse carbon-free power sources across its operating grids.Despite the temporary emissions increase, Microsoft retains its 2030 long-term goals of carbon negativity, water positivity and zero waste. To mitigate Scope 3 risks, the company has strengthened supplier sustainability requirements, assisted vendors in GHG accounting, and required suppliers to use sustainable aviation fuel (SAF) for Microsoft-related business travel where practicable by 2030.
Microsoft also continues to scale up carbon dioxide removal (CDR) efforts. In 2025, it added 29 new CDR projects across ten technical pathways, expected to deliver over 45 million metric tons of carbon reductions in the next 30 years. The company applies differentiated procurement strategies based on technological maturity, including 10–15 year long-term contracts for engineered CDR solutions and over 20-year agreements for nature-based CDR. It also invests in emerging technologies such as enhanced rock weathering (ERW) and direct air capture (DAC) to validate scalability, reduce industry technological risks, and improve global measurement, monitoring, reporting and verification (MMRV) standards.
Source: https://www.esgtoday.com/microsofts-carbon-footprint-jumps-25-as-ai-buildout-challenges-climate-goals/