Microsoft's 2026 sustainability report shows a 25 percent increase in greenhouse gas emissions, driven by datacenter expansion for AI and a shift away from unbundled renewable energy certificates. Scope 2 emissions jumped nearly 10x as the company paused buying spot Energy Attribute Certificates and instead focuses on developing new carbon free energy sources. The company now has agreements for up to 40 GW of renewable energy and is pursuing an all of the above decarbonization strategy including carbon removal projects. Scope 3 emissions, which make up 85.8 percent of Microsoft's footprint, rose 12 percent largely due to capital goods for datacenter buildout. Microsoft added 29 carbon dioxide removal projects in 2025 across 10 pathways, expected to contribute over 45 million metric tons toward its goals over 30 years. The report shows the tension between AI driven energy demand and corporate climate targets, with near term emissions rising as the company shifts from buying renewable energy certificates to directly funding new carbon free generation.
