Microsoft's 2026 sustainability report shows total emissions rose 25% year over year in fiscal 2025, reaching 20.29 million metric tons of CO2 equivalent. The jump is tied directly to data center expansion for AI workloads and the company's decision to stop using unbundled renewable energy certificates. Scope 2 emissions went from 2% of total emissions to 13% as a result. Microsoft still claims it matched all electricity use with renewables through PPAs and on-site generation, but the numbers show that matching does not equal zero emissions when grid accounting changes. Microsoft also reported investing in 29 carbon removal projects across 10 pathways, contributing to over 45 million metric tons of removal. The company maintains its 2030 carbon negative goal but acknowledges that sustainability solutions are not scaling fast enough to keep up with AI driven demand. This mirrors similar trends at Google, where data center buildout is pushing emissions higher despite corporate climate pledges.
