Microsoft’s latest sustainability report shouldn’t surprise- big tech's AI race comes with a growing carbon bill

Big tech under scrutiny as Microsoft reports a 25% increase in emissions

Microsoft’s latest Environmental Sustainability Report has revealed that the corporation saw a 25 percent jump in total emissions across scope 1, 2, and 3 for the financial year ending March 2026[i]. The corporation’s emissions reached 20.3 million mtCO2e (metric tons of carbon dioxide equivalent) in 2025, up from 16.2 million in 2024[ii].

Microsoft has said that this growth was driven primarily by the expansion of data centre infrastructure. It follows a similar trend seen in 2024, where Microsoft’s 2025 Environmental Sustainability Report stated that new data centre builds had contributed to a 23.4 percent increase in the firm’s carbon emissions since 2020[iii].

However, the corporation has also attributed the most recent rise to a pause in the use of non-additional, unbundled renewable energy certificates. Instead, the corporation is realigning itself to prioritise investments that add new renewable energy capacity. The report explained: “While this decision increases our reported emissions in the near term, it enables us to increase the development of new CFE rather than relying on certificates alone. We believe this change will create more long-term sustainability benefits”[iv].

The latest Sustainability report also shows that Scope 3 remains the largest share of Microsoft’s carbon footprint, however, Scope 2 also made a significant contribution, accounting for 13% of total emissions in 2025, compared to less than 2% the year prior. The corporation has claimed that this development highlights how important the energy systems across their supply chain are in shaping environmental outcomes.

Earlier this year Microsoft announced a ‘milestone achievement’ in its bid to become carbon negative by 2030 where it hit its major target of meeting 100 percent of its annual global electricity consumption with renewable energy for 2025. Microsoft said at the time that it obtained more than 90% of renewable energy through Power Purchase Agreements (PPAs) or similar mechanisms in 2025. The remaining 10% of renewable electricity was supported via Microsoft’s standard utility relationships and rates.

Environmental cost of big tech’s data centre boom

The figures highlight a growing tension between the technology industry's AI ambitions and its long-term climate commitments, as companies seek to balance unprecedented infrastructure growth with net-zero targets.

Microsoft is far from alone. Across the technology sector, companies are rapidly expanding global data centre capacity to meet growing demand for AI services. The ‘big three’ Microsoft, Amazon, and Google have seen their emissions rise collectively by almost a fifth in the past year, with the bulk of this growth attributable to data centre build-out.

In Google’s latest environmental report, the corporation stated that emissions increased by 18 percent in 2025 compared to the previous year, largely driven by the construction of data centres and increases in supply chain activities that supported the rapid expansion of its business. Kate Brandt, Google's chief sustainability officer recently commented: “Our AI infrastructure buildout is currently accelerating faster than the grid is decarbonising"[v]

Amazon saw an increase of 16% in 2025 compared with 2024 - emitting 80.85 million tons of CO2 equivalent. It means that for the end of financial year 2025, the three technology companies emitted a combined 119 million mTCO₂e, (more than the Netherlands which saw 118.8 million tonnes emitted in 2024[vi]) this was notably up from 101 million mTCO₂e in 2024.