Microsoft’s carbon footprint keeps growing as AI drives data center expansions

In 2020, Microsoft made an ambitious commitment to make its operations carbon negative within a decade, removing more carbon from the environment than it emits each year.

But four years in, the carbon footprint for the cloud, software and gaming giant keeps expanding.

Depending on how you tally Microsoft’s greenhouse gas emissions, they’re now between 29% and 40% higher than when CEO Satya Nadella made his pledge. That’s according to the company’s 2024 Environmental Sustainability Report, which documents its impacts for the 2023 fiscal year and was released Wednesday.

The increasing use of artificial intelligence and generative AI tools like ChatGPT will make Microsoft’s environmental targets even tougher to reach as they drive demand for ever more energy-gobbling data centers built from carbon-intensive materials such as steel and concrete. The company spent a record $14 billion on capital expenditures in the first quarter of this year alone.

Despite the worrying trends in its carbon emissions, leadership at the Redmond, Wash.-based company stands by the goals.

Melanie Nakagawa, Microsoft’s chief sustainability officer, told GeekWire that while there are challenges in key areas, there is progress in curbing some emissions sources and the corporation is investing in initiatives and climate tech companies that will help ratchet down their carbon impacts over time.

“When we set these targets and 2020, these were our moonshot,” Nakagawa said. “And we remain steadfast in our commitment to getting there. We still have six years to go. We believe there’s incredible innovations, both happening today as well as what we are investing for, that will be online by 2030.”

Microsoft last year emitted more than 15.4 million metric tons of carbon dioxide equivalent, based on its lower calculations. That’s about five times the annual emissions for the city of Seattle.

As its carbon impact expanded, the company reported a net income of $72.4 billion during its fiscal 2023, up 6% year-over-year.

The company’s efforts to cut emissions include:

  • The development of more than 80 new strategies for cutting carbon attributed to construction projects, purchased goods and employee travel.
  • One of those solutions is a new requirement that by 2030, when the company contracts with high-volume suppliers it will only deal with those who use 100% carbon-free electricity for the goods and services they provide to Microsoft.
  • The recent signing of a deal to buy 10.5 gigawatts of renewable power, which will be added to the 19.8 gigawatts of clean energy already in its portfolio.
  • In 2023, Microsoft bought more than 5 million metric tons of carbon removal.
  • Continued investments from its $1 billion Climate Innovation Fund in startups developing low-carbon products such as greener steel and concrete and sustainable aviation fuel.

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