Microsoft has published its latest sustainability report, revealing a 23.4% increase in carbon emissions since 2020. This rise is primarily attributed to the rapid expansion of data centers to support the company’s cloud and AI services. Although acquiring clean electricity is relatively straightforward, the carbon-intensive materials used in construction, such as steel, concrete, and computer chips, present significant challenges.
A Microsoft spokesperson noted that these materials are major contributors to the company’s Scope 3 emissions, which represent emissions outside its direct control—accounting for over 97% of Microsoft’s total carbon footprint for the fiscal year 2024. The primary sources of these emissions are capital goods and purchased goods and services, which together make up approximately three-quarters of the company’s total emissions.
The construction of data centers has notably driven high Scope 3 emissions due to the reliance on traditional supply chains for steel and concrete. Specifically, the steel used is produced in blast furnaces powered by fossil fuels, while concrete production inherently generates carbon dioxide through its chemical processes. Although some startups are working on decarbonizing these materials, significant advancements may take years.
Additionally, carbon emissions are connected to semiconductor manufacturing, where certain chemicals used in chip production, such as hexafluoroethane, have considerable global warming potential.
Microsoft faces challenges in sourcing green electricity, as data centers are not always located near clean energy sources, leading to reliance on external purchases. The company’s emissions have slightly decreased compared to 2023, indicating improvements in reducing climate impacts during data center construction. However, it continues to face hurdles in achieving its 2030 goal of reducing emissions and enhancing carbon removal strategies.
Despite these challenges, Microsoft is reportedly investing in renewable energy and has developed a zero-carbon electricity portfolio of 34 gigawatts. The company has also engaged in large-scale carbon removal agreements. Time remains a critical factor, as the goal for 2030 is approaching rapidly, amidst growing demands from AI and cloud expansion, which complicate sustainability efforts.
Source: https://techcrunch.com/2025/06/02/breakneck-data-center-growth-challenges-microsofts-sustainability-goals/