Microsoft's Emissions Are 23.4% Above Its 2020 Baseline at the Halfway Point to Carbon Negative
Microsoft published its 2025 Environmental Sustainability Report on May 29. The report covers the company's fiscal year 2024, which ended in June 2024, and measures progress against a 2020 baseline. It is the report at the halfway point between Microsoft's 2020 announcement and its 2030 goals of being carbon negative, water positive and zero waste. The headline figure is that Microsoft's total emissions, covering Scopes 1, 2 and 3, were 23.4% higher than in 2020.
The company attributes the increase to growth-related factors including AI and cloud expansion. Microsoft's Scope 1 and 2 emissions, those from its own operations and purchased electricity, fell 29.9% from the 2020 baseline in fiscal 2024. For a company like Microsoft, Scope 3 is dominated by emissions embedded in what it buys: the steel and concrete used to build data centers, the chips, servers and networking equipment that fill them, and the fuels used in its supply chain.
Microsoft says it has contracted 34 gigawatts of carbon-free electricity across 24 countries since starting its procurement program, about an eighteenfold increase since 2020. The report says Microsoft is on track to replenish more water than it consumes across global operations. Water has become a sensitive issue for data center development, particularly in water-stressed regions of the US Southwest, Spain and Chile. Microsoft says its first data centers built with mass timber, in a hybrid construction model, are projected to reduce embodied carbon by up to 65% compared with typical precast concrete.
Microsoft's report illustrates the gap between energy growth and reported emissions in the technology sector. For electricity markets, the important question is whether contracted carbon-free power is additional, meaning it would not have been built without the contract, and whether it is delivered in the same grid region and at the same time as consumption. Microsoft's fiscal 2025 data, due in its 2026 report, will cover a period of further acceleration in data center construction.