When Microsoft pledged four years ago to remove more carbon than it emits by the decade’s end, it was one of the most ambitious and comprehensive plans to tackle climate change. Now, the software giant’s relentless push to be the global leader in artificial intelligence is putting that goal in peril. The latest sustainability report, published Wednesday, reveals that Microsoft’s total planet-warming impact is about 30% higher today than in 2020. This makes achieving a carbon-negative status by 2030 even more challenging.
To meet its goals, the company will need to make rapid progress in securing green steel and concrete and reducing the carbon intensity of its chips, according to Brad Smith in an exclusive interview with Bloomberg Green. “In 2020, we unveiled what we called our carbon moonshot. That was before the explosion in artificial intelligence. So, in many ways, the moon is five times as far away as it was in 2020 if you think of our forecast for the expansion of AI and its electrical needs,” said Smith.
Microsoft’s predicament illustrates how the pursuit of AI is conflicting with emission reduction efforts. Capitalizing on its early lead in the generative AI market has made Microsoft the most valuable company in the world. However, maintaining this position requires significant investment in polluting assets.
AI products are energy-intensive, increasing the workload and energy use of existing data centers and necessitating the construction of new ones, which involves carbon-intensive materials like cement, steel, and microchips. Microsoft plans to spend over $50 billion on expanding its data centers between July 2023 and June 2024, with even higher expenditure expected in the following year, according to Chief Financial Officer Amy Hood. New data center projects have been announced in Wisconsin, Thailand, Indonesia, Spain, Germany, and Japan.
Despite the challenges, Smith believes the positive impact of AI on the world will outweigh its environmental footprint. “We fundamentally believe that the answer is not to slow down the expansion of AI but to speed up the work needed to make it more environmentally friendly,” Smith stated.
However, some Microsoft employees have criticized the company's AI-related work enhancing oil extraction, with over 10,000 forming a group advocating for reduced global warming impact, and some even resigning in protest. “Work to maximize oil production with our technology is negating all of our good work, extending the age of fossil fuels, and enabling untold emissions,” wrote two former employees. In response, a Microsoft spokesperson emphasized the company's focus on empowering the energy transition.
Microsoft remains committed to its climate goals. Despite setbacks, the company is on track in several key areas, including reducing direct operational emissions (Scope 1 and 2), accelerating carbon removal, designing for circularity to minimize waste, improving biodiversity, and reducing water use.
In FY23, Microsoft achieved a reuse and recycle rate of 89.4% for servers and components across all cloud hardware, diverted over 18,537 metric tons of waste from landfills, and reduced single-use plastics in product packaging to 2.7%. The company also contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years and increased its contracted renewable energy portfolio to over 19.8 gigawatts across 21 countries.
The primary challenge remains Microsoft’s Scope 3 emissions, which increased by 30.9% due to the construction of more data centers and the associated embodied carbon in building materials and hardware components. To address this, Microsoft has launched a company-wide initiative to identify and develop measures to reduce these emissions, including requiring select suppliers to use 100% carbon-free electricity by 2030.
Microsoft’s commitment to becoming water positive includes designing new data centers that consume zero water for cooling, achieving a reuse and recycle rate for cloud hardware, and driving innovation in water replenishment projects. In FY23, Microsoft provided over 1.5 million people with access to clean water and sanitation solutions and initiated water replenishment projects estimated to provide more than 25 million m³ in volumetric water benefit.
Despite the rise in emissions, Microsoft is optimistic about its sustainability journey. The company is committed to advancing technology and partnerships to build a more sustainable future. As Brad Smith noted, “Climate change is a problem that humanity created, and that humanity can solve.”
Microsoft's sustainability efforts are part of a broader strategy to harness the power of digital technology for better measurement, increase efficiency in data centers, forge partnerships for greener technologies, build markets for sustainable materials, and advocate for public policy changes to accelerate climate advances. Through these efforts, Microsoft aims to meet its ambitious climate goals and contribute to global sustainability progress.
