Microsoft made a commitment in 2020 to become carbon negative within a decade, but four years in, its carbon footprint continues to expand. The company’s greenhouse gas emissions have increased by 29% to 40% since CEO Satya Nadella made the pledge. The use of artificial intelligence and generative AI tools is driving the demand for more energy-gobbling data centers, making it harder for Microsoft to reach its environmental targets. Despite these challenges, Microsoft’s leadership remains committed to achieving its goals and believes that innovations and investments will help reduce their carbon impacts over time.
Scope 3 emissions account for more than 96% of Microsoft’s carbon footprint, with goods and services purchased from outside sources and capital projects being the largest contributors. In 2023, the company emitted more than 15.4 million metric tons of carbon dioxide equivalent, about five times the annual emissions for the city of Seattle. Despite the increase in carbon emissions, Microsoft reported a net income of $72.4 billion in fiscal 2023, up 6% year-over-year.
Microsoft has implemented several strategies to cut emissions, including developing new solutions for construction projects, purchased goods, and employee travel. The company also has a new requirement that by 2030, it will only contract with high-volume suppliers who use 100% carbon-free electricity. Microsoft has signed a deal to buy 10.5 gigawatts of renewable power and invested in startups developing low-carbon products. The company is also focused on increasing the supply of clean water, reducing waste to zero, and protecting the planet’s biodiversity.
The company’s water use has increased by 87% since 2020, rising to nearly 2.1 billion gallons in 2023, primarily used for cooling data center computers. Microsoft has projects to replenish water supplies around the world to offset its water use. Concerns have been raised about the company’s water consumption in specific locations, such as a data center in Arizona that will use 56 million gallons of water a year. Microsoft plans to design future data centers to consume no drinking water for cooling and utilize alternative strategies such as capturing rainwater and using reclaimed water.
In terms of waste management, Microsoft reports that it recycled and reused 89.4% of its cloud computer servers and other components. The company has also permanently protected 15,849 acres of wildlife and natural spaces. Microsoft’s efforts to address its environmental impact include ongoing investments in clean energy, carbon removal, and sustainable products. While challenges remain in achieving its carbon-negative goal, Microsoft remains dedicated to its sustainability objectives and believes that continued innovation and investment will help them reach their targets by 2030.
