Microsoft's indirect emissions from building lots of datacenters went way up since 2020

In January 2020, Microsoft announced a commitment to not only becoming carbon-negative in terms of its environmental impact by 2030 but also to remove all of the carbon that it has produced since the company was founded over 49 years ago by 2050.

That's a lofty goal, but there have been some hiccups along the way in the efforts to reach carbon-negative status in six years. This week, Microsoft revealed the 2024 edition of its annual Environmental Sustainability Report. The big takeaway is that Microsoft's efforts to build new data centers for its cloud and AI services have caused indirect emissions of carbon to go up by a pretty large percentage.

Microsoft President Brad Smith wrote that the company's direct operational emissions, which it labels as Scope 1 and Scope 2, did go down by 6.3 percent in its fiscal 2023 year compared to the 2020 baseline.

However, that reduction was offset by a huge increase in indirect emissions, known as Scope 3. They increased by a whopping 30.9 percent in its fiscal 2023 year compared to the 2020 baseline. Smith wrote that combining the direct and indirect emissions generative by Microsoft resulted in an increase of 29.1 percent in FY2023 compared to 2020:

The rise in our Scope 3 emissions primarily comes from the construction of more datacenters and the associated embodied carbon in building materials, as well as hardware components such as semiconductors, servers, and racks. Our challenges are in part unique to our position as a leading cloud supplier that is expanding its datacenters. But, even more, we reflect the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips. These are the biggest drivers of our Scope 3 challenges.

He added that Microsoft has now launched a new company-wide effort to cut down on Scope 3 emissions. A new requirement for Microsoft is for its high-volume suppliers to use completely carbon-free electricity to deliver Microsoft's products and services by 2030.

Many data centers also require a lot of water for cooling those large server farms. Smith stated this week that Microsoft's latest data centers have been designed to use no water at all for cooling. It will be interesting to see if these and other efforts will get Microsoft to that carbon-negative goal in only six years.