Microsoft's total greenhouse gas emissions rose 25% year-over-year in 2025, climbing from 16 million metric tons in 2024 to 20 million metric tons, according to its 2026 sustainability report released in July [1, 2, 3]. The increase was primarily caused by the expansion of AI data center infrastructure and a shift in Microsoft's electricity procurement strategy [1, 2, 3].

In 2025, Microsoft stopped purchasing unbundled renewable energy certificates, which led to a 945% jump in reported emissions from purchased electricity compared to 2024 [1, 2, 3]. Melanie Nakagawa, Microsoft's Chief Sustainability Officer, said the decision raised reported emissions in the near term but believes it will drive increased carbon-free electricity capacity on regional grids over the long term: "This decision shows up as increasing our reported emissions in the near term, but we believe it creates greater long-term environmental value because it actually helps expand carbon-free electricity capacity and generation on the grids that we need it to be in" [1].

Microsoft nevertheless matched 100% of its annual electricity use with renewable energy in 2025 [1, 3]. The company improved data center water-use efficiency by 25% compared to its 2022 baseline, on track to meet its 40% improvement goal by 2030 [1]. Nakagawa noted that many sustainability solutions are "not scaling fast enough to keep pace with AI infrastructure growth," and reiterated the company's commitment to being carbon negative by 2030 [1, 2, 3].

The environmental impact of AI infrastructure is a wider industry challenge shared by Google, Amazon, and Meta. These companies account for about two-thirds of data center power capacity monitored by Jefferies [1, 4]. UN Secretary-General António Guterres called on tech firms to disclose their full environmental footprints amid rising AI demand, stating, "AI may feel intangible — but its footprint is not" [4].

Microsoft's sustainability report was published on July 9, while the UN's call for transparency came a day later on July 10 [1, 2, 4]. The company continues to navigate the challenge of meeting ambitious climate goals while supporting rapid AI infrastructure growth.