Breakneck data center growth challenges Microsoft’s sustainability goals

Summary

Microsoft’s new sustainability report, released late last week, shows how a carbon-heavy economy can weigh on a company that wants to be carbon light. Since 2020, its carbon emissions are up 23.4%, mostly a result of breakneck data center buildout to support its growing cloud and AI operations. Buying enough clean electricity is actually the easy part — it’s the facilities themselves that are laden with carbon-intensive materials and products, including steel, concrete, and computer chips. “We reflect the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips,” a Microsoft spokesperson told TechCrunch via email. “These are the biggest drivers of our Scope 3 challenges.” Scope 3 emissions are those that are outside a company’s direct control, including raw materials, transportation, and purchased goods and services. Emissions in Scope 3 represent nearly all of Microsoft’s carbon footprint, just over 97% for fiscal year 2024, which the 2025 sustainability report covers. Microsoft’s Scope 3 profile is dominated by capital goods and purchased goods and services, with the two contributing about three-quarters of the company’s total carbon emissions. The construction of data centers has been the main driver behind Microsoft’s stubborn Scope 3 emissions. The steel used in the buildings comes from a supply chain that relies on blast furnaces heated by fossil fuels, and concrete used in the foundation is the product of a chemical reaction that’s both powered by and a producer of carbon dioxide. Some startups are working to decarbonize both steel and cement, and Microsoft is an investor in the space, but it’ll be years before those bets will have a significant impact. Carbon emissions are embodied in the computer chips inside the data center, too. Semiconductor lithography is dependent on chemicals that have extremely high global warming potential. For example, hexafluoroethane, which is used to etch features on chips, is a potent gree...