Microsoft released its 2026 Environmental Sustainability Report, revealing a significant jump in the tech giant’s GHG footprint, with emissions rising 25% over the prior year, driven by an accelerating AI infrastructure buildout, as well as a shift in the company’s clean energy strategy away from the use of non-additional renewable energy certificates and towards the development of new carbon-free energy sources.

While acknowledging the “increasing demand for energy, water, land, and materials” of the rise of AI, Microsoft’s Chief Sustainability Officer confirmed that the company “remain(s) committed to our long-term ambitions,” and the report reiterated that Microsoft is working towards its goals to reach carbon negative, water positive and zero waste by 2030.

Microsoft’s new report points to two key drivers behind the company’s increase in emissions, highlighting “the expansion of our datacenter infrastructure and pausing our use of non-additional, unbundled renewable energy certificates as we prioritize investments that bring net new power to grids.”

While not explicitly quantifying the impact of each factor in the report, the accompanying data fact sheet indicates a nearly 10x jump in Scope 2 emissions – which include indirect emissions from the generation of purchased electricity, steam, heat, or cooling – which grew to 13% of Microsoft’s GHG footprint in 2025, up from less than 2% the prior year. In the data sheet, Microsoft explained that it discontinued its program of purchasing spot Energy Attribute Certificates (EACs), with the company reevaluating the effectiveness of the EACs on supporting its long-term carbon negative commitment.

In the report, Microsoft added:

“While this decision increases our reported emissions in the near term, it enables us to increase the development of new CFE rather than relying on certificates alone. We believe this approach will help drive more durable long-term emissions reductions.”

Highlighting its clean energy strategy, the report also indicated that Microsoft expanded its renewable energy portfolio to agreements encompassing up to 40GW of renewable energy, up from 34 GW last year, while suggesting an expansion of focus beyond renewables, noting that “Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity (CFE) to the grids where we operate, complementing and building on our portfolio of renewable energy resources,” and adding that “the world’s rising electricity needs require a balanced, all-of-the-above decarbonization strategy to meet global economic growth and environmental goals.”

Microsoft’s Scope 3 emissions, which continue to account for the bulk – 85.8% – of its GHG footprint, also increased by around 12% during the year, largely reflecting the datacenter buildout, with “Capital goods” representing the majority of the increase, offset by declines in categories such as emissions from use of sold products.

The company highlighted initiatives it is pursuing to address its Scope 3 emissions, including strengthening sustainability expectations for suppliers, such as introducing a new request that suppliers purchase SAF for Microsoft-related travel where possible by 2030, streamlining access to carbon-free energy for suppliers, and helping suppliers to calculate greenhouse gas emissions.

Despite recent reports that Microsoft has informed carbon credit suppliers that it is pausing its carbon removal purchases, the report dedicates several pages to the company’s carbon dioxide removal (CDR) program, including stating that Microsoft “continued to conduct due diligence on roughly 200 CDR projects and use CDR procurement to signal market demand.” Microsoft also said that it has adapted its CDR due diligence and contracting approach based on the type of CDR, its relative maturity, and its potential to scale, with the company following a multi-approach strategy including signing 10 – 15 year agreements for engineered CDR solutions to help developers secure project financing based on certainty provided by the offtake deals, and agreements typically exceeding 20 years for nature-based solutions, in addition to investing in emerging, early-stage pathways such as enhanced rock weathering (ERW) and direct air capture (DAC) with smaller purchases to assess viability, scalability, and environmental and community impacts, while helping to de-risk the emerging technologies and mature the measurement, monitoring, reporting, and verification (MMRV) protocols.

Microsoft added 29 CDR projects to its portfolio in 2025, encompassing 10 distinct CDR pathways, with the projects expected to contribute more than 45 million metric tons towards the company’s carbon goals over the next three decades.

Click here to access Microsoft’s 2026 Environmental Sustainability Report.