Microsoft's latest sustainability report reveals a 23.4% increase in carbon emissions since 2020, primarily driven by data center construction to support cloud and AI growth. While purchasing clean electricity is manageable, the real challenge lies in the carbon-heavy materials used, such as steel and concrete. Scope 3 emissions, making up over 97% of the company’s carbon footprint, stem largely from the procurement of these capital goods. Although Microsoft is investing in startups aimed at decarbonizing these materials, substantial impact will require time and innovation.
We reflect the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips, the biggest drivers of our Scope 3 challenges.
Scope 3 emissions represent nearly all of Microsoft's carbon footprint, just over 97% for fiscal year 2024, dominated by capital goods and purchased goods and services.
Construction of data centers is behind Microsoft's stubborn Scope 3 emissions, reliant on fossil fuel-powered steel and cement.
Some startups are working to decarbonize steel and cement, and Microsoft is an investor, but it’ll be years before those efforts have a significant impact.
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