Microsoft's 2025 sustainability report shows a 25 percent rise in carbon emissions, driven by expanding AI data center infrastructure. The company says the increase comes from building out datacenters and pausing the use of unbundled renewable energy certificates that did not add new clean power to grids. Microsoft is now focusing on investments that bring net new renewable energy online rather than buying offsets that don't directly reduce grid emissions. This is a concrete example of the tension between AI growth and climate goals. As data center electricity demand surges, even major tech buyers of renewables are seeing their carbon footprints rise. The shift away from unbundled RECs toward projects that actually add capacity to grids could reshape how corporate renewable procurement works. For carbon market watchers, this is a signal that quality of offsets and additionality in renewable purchases matters more than headline procurement numbers.
