Microsoft's environmental report indicates a growing tension between the company's expansion of AI infrastructure and its climate commitments. The report follows similar disclosures from Google and Amazon, which also noted increases in emissions alongside AI development. Microsoft's total greenhouse gas emissions rose by 25%, attributed to its digital infrastructure growth and changes in electricity procurement. However, a measure of data-center water-use efficiency improved by 25% from the previous year, aiming for a 40% improvement by 2030.
The report highlights that major tech companies, including Amazon, Google, Microsoft, and Meta, account for approximately two-thirds of the data-center power capacity among the top 15 firms tracked by Jefferies, influencing the industry's environmental strategies. Microsoft's Chief Sustainability Officer, Melanie Nakagawa, did not confirm if the company remains on track to achieve its carbon-negative goal by 2030, citing broader industry challenges.
Reported emissions from purchased electricity surged by 945% between 2024 and 2025, with electricity consumption increasing by 24%. This rise is linked to Microsoft's shift away from renewable energy certificates from existing projects to investments that support new carbon-free electricity generation. Despite claiming to match 100% of its annual electricity consumption with renewable energy, Microsoft is developing data centers powered by natural gas in Texas and West Virginia. Nakagawa stated that the company balances climate goals with the need for reliable power as AI demand grows.
For the first time, Microsoft reported returning more water to watersheds than it withdrew last year, despite increases in water withdrawals and consumption due to AI growth. The company aims to replenish water within the same watersheds from which it is withdrawn, indicating progress in its sustainability efforts. Overall, the report suggests that AI's rapid growth is outpacing the sustainability plans established earlier this decade.