Over a decade of investment: 40 gigawatts of new renewable energy contracted

What began in 2013 with a single 110 megawatt (MW) power purchase agreement (PPA) in Texas — a small first step to demonstrate how corporate procurement could scale clean energy(3) — has evolved into one of the largest clean energy portfolios in the world. This first deal not only supported Microsoft’s early cloud services but also set in motion a decade of commercial partnerships and learning-by-doing that served to demonstrate how corporate demand for advanced energy solutions can help to achieve a more affordable and sustainable power system, while supporting reliability for customers.

Since our carbon negative announcement in 2020, we have contracted 40 gigawatts (GW) of new renewable energy supply across 26 countries, working with more than 95 utilities and developers across 400+ contracts and counting. To put that amount in perspective — that’s enough energy to power about 10 million US homes. Of that contracted volume, 19 GW are now online, delivering new clean energy supply to the power grid, while the remainder are slated to come online over the next five years.

Our new renewable energy procurement continues to deliver significant environmental benefits, including the reduction of Microsoft’s reported Scope 2 carbon dioxide emissions by an estimated 25 million tons(4) and the mobilization of billions of dollars’ worth of private investment in regions where we operate.

Microsoft’s global renewable energy procurement footprint

Catalyzing market investment through bankable, repeatable models

Microsoft is among the early pioneers in developing technical and commercial practices that help advance bankable, repeatable and scalable procurement tools suitable for each market. Our clean energy purchasing navigates a global patchwork of power market designs, requiring creativity in how we balance cost, time to market and project sizing in our portfolio across planning, contracting and management.

Our work has benefited from a broad coalition of partners helping to build this market together. According to Bloomberg New Energy Finance, more than 200 global corporations collectively purchased nearly 200 GW of clean energy around the world since 2008. Working alongside other clean energy buyers — as well as hundreds of utilities, manufacturers, financiers, developers and engineers — we have helped reduce transaction costs, expand developer access to financing and streamline procurement approaches that other buyers can adopt.

This global flywheel of partnership, investment, technology and policy innovation is expected to continue to facilitate billions of dollars’ worth of investment into infrastructure and jobs. And as we’ve seen repeatedly, when Microsoft sends a clear market signal for world-class, first-of-a-kind technologies and infrastructure, the power sector rises to the challenge. Our procurement over the past decade has demonstrated that partnerships, communities and innovation are essential ingredients that help to accelerate first-of-a-kind technologies and infrastructure at scale.

Scaling partnerships to scale infrastructure

Critical to Microsoft’s success in expanding digital infrastructure and supporting our local communities is our ability to build trusted partnerships with the over 95 global energy suppliers that support our clean energy portfolio. We have sourced clean energy through multiple requests for proposal or information, bilateral engagements and clean tariffs to evaluate over 5,000 unique carbon-free energy projects around the world.

Today, Microsoft has six energy company partners with which we have over 1 GW of contracted renewable energy capacity, and more than 20 energy supplier partners where each partner has at least five separate renewable energy projects with Microsoft — evidence of the durable, repeatable relationships necessary to scale clean energy. Combining scale with speed, Microsoft’s landmark 10.5 GW framework agreement with Brookfield sends a long-term, 2030 demand signal to the market that enables developers to raise funding more efficiently, bolster supply chains, hire engineers and construct world-class energy infrastructure.

Putting communities first

Our renewable energy procurement has mobilized billions of dollars in private investment, supported thousands of jobs across the communities where we operate and delivered meaningful co-benefits. Through partnerships with developers and nonprofit organizations, we’ve worked to embed community-driven benefits into our energy portfolio. These benefits include robust infrastructure, economic inclusion and support for community-focused organizations.

Our support for communities shows up in projects like our 500 MW PPA with Sol Systems, or our 250 MW PPA with Volt Energy Utility that provided local training and jobs, as well as grants to community nonprofit organizations and habitat restoration. We’ve also signed over 1.5 GW of distributed solar, bringing clean energy directly into hundreds of communities around the world. Landmark agreements like our 500 MW offtake with Pivot Energy, or our 270 MW offtake with PowerTrust are expected to foster employment, energy cost savings and grid resilience in communities across the United States, Mexico and Brazil. More details on the above examples and our approach to community benefits in clean energy agreements can be found in a dedicated Microsoft whitepaper.

Innovation unlocks new markets and pathways

Microsoft’s clean energy procurement continues to play an important role in catalyzing technical, commercial and regulatory innovation. Our commercial efforts have helped lower barriers to entry into new markets and expand access into multi-technology contracts that accelerate decarbonization.

In Japan, Microsoft signed one of the first corporate PPAs in the country’s restructured power market. Our 25 MW, 20-year agreement with Shizen represents the first single-asset virtual PPA executed in the country, which helped pave the way to over 2GWs of corporate procurement since 2024, according to Bloomberg New Energy Finance. Alongside opening new markets, we have structured several multi-technology offtakes in nascent markets for corporate procurement. In India, Microsoft purchased a combined 437 MW solar/wind hybrid offtake from Renew, where our projects will support energy access and rural electrification. In Microsoft’s home state of Washington, our datacenters in Douglas County are supplied by 100% carbon-free energy, as we leverage a creative blend of new wind power and hydropower storage to deliver around-the-clock clean energy.

Looking forward to 2030 and beyond

In 2025, the International Energy Agency (IEA) described a new “Age of Electricity,” marked by accelerating electricity demand from electric vehicles, air conditioners, data centers and heat pumps. As the world electrifies more of the economy, the demand for affordable, reliable and clean electricity will continue to rise.

Our experience building Microsoft’s clean energy portfolio both reflects and furthers global trends. According to IEA data, since 2000, renewable energy generation has expanded nearly four-fold. In many power markets across the world, clean energy is one of the fast-growing sources of generation, and often the one with the fastest time-to-market. Corporate buyers like Microsoft continue to serve as an important catalyst in driving commercial demand for innovation and infrastructure across the power industry.

As we continue our journey toward becoming carbon negative by 2030, Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity solutions, complementing and adding to our portfolio of renewable energy resources. We recognize that the world’s rising electricity needs require a balanced, all-of-the-above decarbonization strategy to meet global economic growth and environmental goals, and our sustainability goals will continue to support this approach moving forward. Such a strategy requires a broader set of carbon-free energy and grid-enabling technologies, including nuclear energy, next-generation grid infrastructure and carbon capture technology. Just as renewable energy was a relatively small part of global energy grids in 2013 when we signed our first PPA, today many advanced energy technologies remain early in their development but offer significant promise to accelerate progress towards an affordable, reliable and sustainable energy future.

Microsoft has already taken early steps to support the advancement of a broader set of carbon-free energy technologies as we partner with Helion and Constellation Energy on a 50 MW fusion project in Washington state and work with Constellation to restart the 835 MW Crane Clean Energy Center in Pennsylvania. Microsoft’s Climate Innovation Fund has allocated $806 million of capital to 67 investees, with 38% directed toward Energy Systems — advancing carbon-free power and fuels, energy storage and energy management solutions.

We welcome continued collaboration with our power sector partners to bring these innovations to market and incorporate new technology tools in the process to accelerate their development.

We will continue to build and leverage new AI-driven tools to design, permit and deploy new power technologies that help expand and more efficiently operate the electricity grid, bringing more clean energy online faster. This work is exemplified by our recently announced collaborations with Idaho National Laboratory and the Midcontinental System Operator, among other examples.

And as we advance innovative energy technologies, we recognize that standards must evolve alongside innovation. That is why we will continue participating in industry forums that strengthen carbon accounting frameworks — so that our clean energy procurement is measured with greater accuracy and delivers real world emissions reductions, with a continued focus on maintaining the high level of integrity that the world has come to expect from Microsoft.

Our carbon negative commitment remains a call to action — for Microsoft, our customers and the broader technology sector — to invest in an affordable, reliable and sustainable power system. As we look toward 2030, that call to action has never been clearer.

Gratitude — and momentum for the work ahead

Today’s milestone represents a shared achievement among the utility professionals, clean energy developers, community leaders, technology innovators and forward-thinking policymakers who continue the deployment of renewable energy. Meeting today’s milestone shows what partnership can deliver in bringing big ideas to life. The future of carbon-free energy is one that we will create – together.

As Microsoft’s Chief Sustainability Officer, Melanie Nakagawa leads the company’s targets to be carbon negative, water positive, and zero waste by 2030. She brings deep experience at the intersection of policy, business, and technology to advance climate and sustainability solutions globally.

As President of Cloud Operations + Innovation at Microsoft, Noelle Walsh leads the organization that powers the global Microsoft Cloud. She oversees the company’s physical cloud infrastructure and operations, with a charter focused on safety, security, availability, sustainability, and competitive infrastructure growth—bringing decades of global operational leadership.

Footnotes

1. Renewable energy is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
2. To date, Microsoft’s renewable energy target includes two primary categories: renewable energy from contracted projects and grid mix. The first is renewable energy delivered under PPAs or similar long-term contracting mechanisms, generally for new projects where our financial involvement in the project’s development is critical for its success. This category represents more than 90% of the renewable energy applied to achieve our 2025 target.The second category is “grid mix” – renewable energy supported via our standard utility relationships and rates, inclusive of policy programs such as renewable portfolio standards and state and utility decarbonization goals.Our 2025 100% renewable target does not include purchases from short-term, so-called “spot market” renewable energy credits (RECs) sourced from operational clean energy projects.With the above in mind, Microsoft leverages a straightforward formula to determine our 100% renewable energy metric on a global, annual basis. We update and further detail the methodology and assumptions behind this formula in our annual sustainability reports:
3. Clean energy— also referred to in this blog as carbon free energy —is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
4. Reduction of reported Scope 2 emissions are calculated between FY20-25, the cumulative difference between location based and market-based emissions, excluding the use of short-term, so-called “spot market” RECs

The post A milestone achievement in our journey to carbon negative appeared first on The Microsoft Cloud Blog.

At Microsoft, we see this shift clearly in our conversations with customers globally. Leaders are moving quickly to scale AI, while remaining accountable for sustainability commitments to customers, investors, regulators, and employees. Too often, these goals are positioned as tradeoffs. In practice, they are reinforcing. When AI transformation is approached with intent and discipline, it can drive stronger business performance while advancing sustainability outcomes.

That belief is the foundation of our new Strategic Guide: Aligning AI Transformation with Sustainability Goals.

Why AI transformation and sustainability belong together

The most meaningful impact from AI comes not from isolated pilots, but from transformation—when intelligence is embedded across strategy, operating model, and culture. That’s the premise of Microsoft’s Frontier transformation AI vision, where organizations are enriching employee experiences, reinventing customer engagement, reengineering core business processes, and bending the curve on innovation.

What’s often overlooked is that these same shifts deliver sustainability gains. More efficient processes require less energy and fewer resources, better data reduces waste and overproduction, and modern cloud and AI architectures—when designed intentionally—can shrink digital footprints while increasing speed and resilience.

Five practices for sustainable AI transformation

Our new Strategic Guide: Aligning AI Transformation with Sustainability Goals makes this connection explicit and practical, offering five essential practices leaders can apply today to turn AI ambition into measurable business and sustainability outcomes.

1. Adopt a modern cloud strategy.
   Moving workloads to efficient, hyperscale cloud environments is often the single biggest step organizations can take to reduce energy use while improving performance. Modern cloud platforms enable organizations to scale AI intelligently—optimizing compute, storage, and cooling in ways that are difficult to achieve on‑premises.
2. Assess your cloud provider’s sustainability and trust goals.
   An organization’s environmental footprint increasingly extends beyond its own walls. Transparency, renewable energy commitments, and responsible datacenter operations matter because your partners’ practices become part of your sustainability equation.
3. Manage data responsibly for efficient and accurate AI.
   Efficient data pipelines, strong governance, and thoughtful lifecycle management do more than reduce risk. They also reduce unnecessary compute and storage, helping AI systems become more accurate, scalable, and sustainable.
4. Optimize cloud workloads.
   As AI moves from pilots to production, sustainability outcomes increasingly depend on how workloads are designed and run in the cloud. Right‑sizing compute, reducing idle resources, and streamlining data movement lowers energy use while improving performance and cost control.
5. Fit the model to the mission.
   With efficient cloud foundations in place, leaders can focus on selecting the right AI models for the right jobs. Aligning model choice with business objectives, performance requirements, and sustainability goals enables organizations to scale AI responsibly—maximizing impact without unnecessary complexity or resource use.

Together, these practices help leaders move beyond aspiration to execution—delivering what the guide describes as a dual return: stronger business performance alongside reduced environmental impact.

What the research shows

AI can deliver better results—faster and more sustainably

In a simple experiment highlighted in the Strategic Guide: Aligning AI Transformation with Sustainability Goals, Microsoft set out to understand how efficiently AI could perform a common knowledge work task.

Five professionals were asked to summarize a 3,000-word technical report into 200 words. Completing the task took a median of 41 minutes and consumed an estimated 13.7 watthours of laptop energy.

Using a single prompt, Microsoft Copilot completed the same task in under a minute—using just 0.29 watthours of datacenter energy. That’s roughly 55 times faster and 47 times more energy efficient. Independent reviewers also rated the AI-generated summary higher for clarity, accuracy, completeness, and overall quality.

The takeaway is clear: when AI is applied thoughtfully, it can reduce time, energy consumption, and friction—while delivering stronger outcomes.

What this looks like in practice

Across industries, organizations are already demonstrating how AI transformation and sustainability reinforce one another.

ABB, a global leader in electrification and automation, is using AI to help energy and asset intensive industries operate more efficiently while meeting increasingly ambitious sustainability goals. The Genix Industrial AI Platform helps ABB customers deliver from 25% efficiency gains in data centers to 18% energy savings in cement production.

In the construction sector, Giatec is tackling one of the world’s most carbon intensive materials: concrete. Built on Microsoft Azure, Azure IoT Hub, and Azure OpenAI in Foundry Models, Giatec’s intelligent platform optimizes mix designs, reduced 2.5 million tons of carbon emissions, and increased profit margins for concrete producers by up to 100%.

Space Intelligence uses AI to turn vast amounts of satellite data into trusted, actionable insights for global climate and conservation efforts. The company moved to Microsoft Foundry and the Planetary Computer ecosystem to reduce the time required to map the world’s forests by 75%, completing coverage of more than 50 countries in just one year, something that would’ve taken six years—delaying the ability to drive and verify real world climate impact.

Becoming a Frontier organization—responsibly

These examples point to a broader trend: the organizations leading in AI are also redefining what responsible innovation looks like. Frontier organizations don’t treat sustainability as a separate initiative or reporting exercise. They design it into their transformation from the start.

Solving systemic challenges like climate change requires collaboration—across value chains, ecosystems, and sectors. It also requires leaders who are willing to ask better questions about how technology is deployed, measured, and governed.

This perspective is demonstrated by Microsoft’s recent announcement on community-first AI infrastructure. As we scale AI, we have a responsibility to consider not only what these systems can do, but how and where they are built. That means investing in infrastructure that supports local communities, prioritizes renewable energy, manages water responsibly, and is designed with transparency and long-term partnership in mind. Building AI responsibly isn’t just about reducing risk—it’s about earning trust and ensuring that the benefits of innovation are shared broadly—from the datacenter outward.

Used thoughtfully, AI can help us make smarter decisions, operate more efficiently, and unlock entirely new ways of creating value—while staying within planetary boundaries. Used carelessly, it risks accelerating the very challenges we’re trying to solve.

That’s why clarity matters. Frameworks matter. And practical guidance matters.

What leaders can do next

If you are responsible for shaping your organization’s AI strategy, sustainability agenda, or both, I encourage you to explore the Strategic Guide: Aligning AI Transformation with Sustainability Goals. It is designed to help you cut through complexity, identify where to start, and move forward with clear actionable strategies.

At Microsoft, we’re committed to helping our customers become Frontier organizations that lead with innovation, responsibility, and impact.

The challenges we face are complex. But with the right strategy, the right technology, and a shared commitment to progress, AI can help us build a more sustainable and prosperous future—for everyone.

Strategic Guide: Aligning AI Transformation with Sustainability Goals

Read the guide

The post Beyond Davos 2026: 5 practices to align AI transformation and sustainability appeared first on The Microsoft Cloud Blog.

As we work across industries with cloud and AI solutions to advance sustainability, we also continue our work to advance the sustainability of the datacenter infrastructure that delivers these cloud and AI innovations. Decarbonizing datacenter construction is a company-wide effort at Microsoft, from how we design, build, and operate datacenters to our work to grow markets for low-carbon building materials.  

As a sector, building materials such as steel and concrete are some of the highest contributors to the embodied carbon of new construction, together producing an estimated 13.5% of global carbon emissions.¹ Embodied carbon is a measure of the carbon emitted during the manufacturing, installation, maintenance, and disposal of a product or material.  

Innovations in lower-carbon steel and concrete are emerging around the globe, however, these markets are still nascent and need significant investment to bring supply online. With our $1 billion Climate Innovation Fund and the collaboration of pioneering teams across datacenter engineering and procurement, we’re investing to accelerate these markets.  

Innovating for energy efficiency

Explore how we’re advancing the power and energy efficiency of AI

Read the blog 

Novel construction materials and new methods of creating those materials show promise in sectors that are traditionally described as “hard to abate,” sectors we believe are necessary to abate. For example, we’re breaking ground on mass timber datacenters, investing to accelerate market availability of near-zero carbon steel, and expanding options for low-carbon concrete in construction. 

Innovating with mass timber datacenter construction to reduce embodied carbon 

In Virginia, we’re building our first datacenters made with superstrong, ultra-lightweight wood with the goal of reducing the embodied carbon of the buildings by 35% compared to conventional steel construction, and 65% compared to typical precast concrete. 

Although this is a novel approach to datacenter construction, it’s a material we’ve used before. In 2021, when we chose cross-laminated timber (CLT) for a new building on our Silicon Valley campus, the approach brought numerous environmental benefits. With additional ecological design elements ranging from water reuse to clean energy production to new public pathways and restoration of the native ecology, the structure earned recognition for sustainable design excellence from the American Institute of Architects.  

The CLT market is well-established in Europe and rapidly growing in the United States, due to demand in the residential segment and adaptability of CLT to new designs. However, our innovative work to apply this material to building a hyperscale datacenter has required everyone to work differently, from our engineers to our procurement teams to the suppliers involved in construction.  

Because CLT is prefabricated offsite, it brings additional benefits such as a faster and safer onsite installation than traditional corrugated steel. Built commonly out of spruce, pine, or fir, CLT shows remarkable structural integrity and resilience even under high temperatures, developing a char and providing insulation in scenarios where steel is likely to fail. But few datacenter building specialists have experience with the material, reducing the availability of skilled contractors, and the materials come at a premium cost in certain regions.  

Throughout this project, our teams have risen to the challenge by sharing best practices across disciplines, crafting new procurement strategies, ensuring skilling pathways, and working collaboratively to validate new material combinations. Expanding the building material options for datacenter construction helps us advance our sustainability goals and contributes to expanding the market for sustainable building materials, including markets for regionally sourced materials and contractors working with these materials. 

Accelerating market availability of near-zero carbon steel 

Last year, Microsoft’s Climate Innovation Fund became an investor in Sweden’s Stegra (formerly H2 Green Steel), which is building the world’s first large-scale green steel plant in northern Sweden, achieving up to a 95% reduction in carbon emissions compared to traditional steelmaking.² Another promising investment within our Climate Innovation Fund is Boston Metal, which uses renewable electricity and a unique process that generates oxygen instead of carbon dioxide when making steel. In addition, Microsoft is a founding member of the Sustainable Steel Buyers Platform of RMI, a first-of-its-kind buyers’ group accelerating steel decarbonization through collaborative procurement and market action. 

In addition to these investments, our engineering and procurement teams are working to incorporate low-emissions steel in new construction. As an example, we recently collaborated with Tate, a global leader in design engineering and manufacturer for data center infrastructure products, to pilot a hot aisle containment system that offers a 67% embodied carbon reduction over prior Tate products offered to Microsoft. Hot aisle containment systems in datacenters improve cooling efficiency through a physical barrier that keeps hot and cold air separate.  

Expanding options for low-carbon concrete for construction  

The bulk of emissions associated with concrete come from cement production. A key ingredient of cement is limestone, which is typically heated with clay to around 2,650 degrees Fahrenheit in a coal or gas-fired kiln where it undergoes a chemical reaction called calcination that releases carbon dioxide as a byproduct. In Washington, our pilot program utilizes cement alternatives like biogenic limestone (grown in place by algae instead of quarried) and fly ash and slag, testing mixes that can lower the embodied carbon in concrete by more than 50% compared to traditional mixes.  

While transitioning to low-carbon concrete production is not as capital intensive as steel manufacturing, the supply chain is fragmented and manufacturing processes can be complex—causing delays and slowing adoption of new techniques. For this reason, we’re looking to expand options for construction across the low-carbon concrete value chain. 

One of the Climate Innovation Fund’s earliest investments is CarbonCure, a company deploying low carbon concrete technologies that inject captured carbon dioxide into concrete, where the CO2 immediately mineralizes and is permanently embedded as nanosized rocks within the physical product. This not only acts as a carbon sink but also strengthens the material, enabling a reduction in the amount of carbon-intensive cement required. Another investment is Prometheus Materials, a company producing zero-carbon bio-concrete through a unique process that combines naturally occurring microalgae with other components.  

Explore the Sustainable by design series

With these investments, we aim to facilitate the commercialization of materials innovations that can make an outsized impact on carbon reduction for our own buildings and for built environments around the world. 

Learn more about our work to advance the sustainability of AI with the Sustainable by design blog series: 

• Sustainable by design: Advancing the sustainability of AI
• Sustainable by design: Transforming datacenter water efficiency
• Sustainable by design: Innovating for energy efficiency in AI, part 1
• Sustainable by design: Innovating for energy efficiency in AI, part 2

¹ Nature Research, Cement and steel—nine steps to net zero. 

² Stegra, Green platforms—green hydrogen, green iron, and green steel. 

The post Sustainable by design: Advancing low carbon materials appeared first on The Microsoft Cloud Blog.

As we work to advance the sustainability of our business, we are also advancing the sustainability of the datacenter infrastructure needed to deliver cloud and AI innovations. At Microsoft, we are working to decarbonize datacenters by focusing on how we design, build, and operate. To support this work, we are also investing to help scale markets for low-carbon building materials.

As a sector, building materials such as steel and concrete are some of the highest contributors to the embodied carbon of new construction, together producing an estimated 13.5% of global carbon emissions.¹ Embodied carbon is a measure of the carbon emitted during the manufacturing, installation, maintenance, and disposal of a product or material.  

Innovations in lower-carbon steel and concrete are emerging around the globe, however, these markets are still nascent and need significant investment to bring the needed supply online. Through our $1 billion Climate Innovation Fund and the collaboration of pioneering teams across datacenter engineering and procurement, we’re investing to accelerate these markets.  

Innovating for energy efficiency

Explore how we’re advancing the power and energy efficiency of AI

Read the blog

Novel construction materials and new methods of creating those materials show promise in sectors that are traditionally described as “hard to abate,” these are sectors we believe are necessary to abate. For example, we’re breaking ground on mass timber datacenters, investing to accelerate market availability of near-zero carbon steel, and expanding options for low-carbon concrete in construction. 

Innovating with mass timber datacenter construction to reduce embodied carbon 

In Virginia, we’re building our first datacenters made with superstrong, ultra-lightweight wood with the goal of reducing the embodied carbon of the buildings by 35% compared to conventional steel construction, and 65% compared to typical precast concrete. 

Although this is a novel approach to datacenter construction, it’s a material we’ve used before. In 2021, when we chose cross-laminated timber (CLT) for a new building on our Silicon Valley campus, the approach brought numerous environmental benefits. With ecological design elements ranging from water reuse to clean energy production to new public pathways and restoration of native ecology, the structure earned recognition for sustainable design excellence from the American Institute of Architects.  

The CLT market is well-established in Europe and rapidly growing in the United States, due to demand in the residential segment and adaptability of CLT to new designs. However, our innovative work to apply this material to building a hyperscale datacenter has required everyone to work differently, from our engineers to our procurement teams to the suppliers involved in construction.  

Because CLT is prefabricated offsite, it brings additional benefits such as a faster and safer onsite installation than traditional corrugated steel. Built commonly out of spruce, pine, or fir, CLT shows remarkable structural integrity and resilience even under high temperatures, developing a char and providing insulation in scenarios where steel is likely to fail. But few datacenter building specialists have experience with the material, reducing the availability of skilled contractors, and the materials come at a premium cost in certain regions.  

Throughout this project, our teams have risen to the challenge by sharing best practices across disciplines, crafting new procurement strategies, ensuring skilling pathways, and working collaboratively to validate new material combinations. Expanding the building material options for datacenter construction opens new paths toward achieving climate goals and contributes to expanding the market for sustainable building materials, including markets for regionally sourced materials and contractors working with these materials. 

Accelerating market availability of near-zero carbon steel 

Last year, Microsoft’s Climate Innovation Fund became an investor in Sweden’s Stegra (formerly H2 Green Steel), which is building the world’s first large-scale green steel plant in northern Sweden, achieving up to a 95% reduction in carbon emissions compared to traditional steelmaking.² Another promising investment within our Climate Innovation Fund is Boston Metal, which uses renewable electricity and a unique process that generates oxygen instead of carbon dioxide when making steel.

In addition, Microsoft is a founding member of the Sustainable Steel Buyers Platform of RMI, a first-of-its-kind buyers’ group accelerating steel decarbonization through collaborative procurement and market action. Our engineering and procurement teams are working to incorporate low-emissions steel and repurposed steel in new construction. 

Expanding options for low-carbon concrete for construction  

The bulk of emissions associated with concrete come from cement production. A key ingredient of cement is limestone, which is typically heated with clay to around 2,650 degrees Fahrenheit in a coal or gas-fired kiln where it undergoes a chemical reaction called calcination that releases carbon dioxide as a byproduct. In Washington, our pilot program utilizes cement alternatives like biogenic limestone (grown in place by algae instead of quarried) and fly ash and slag, testing mixes that can lower the embodied carbon in concrete by more than 50% compared to traditional mixes.  

While transitioning to low-carbon concrete production is not as capital intensive as steel manufacturing, the supply chain is fragmented and manufacturing processes can be complex—causing delays and slowing adoption of new techniques. For this reason, we’re looking to expand options for construction across the low-carbon concrete value chain. 

One of the Climate Innovation Fund’s earliest investments is CarbonCure, a company deploying low carbon concrete technologies that inject captured carbon dioxide into concrete, where the CO2 immediately mineralizes and is permanently embedded as nanosized rocks within the physical product. This not only acts as a carbon sink but also strengthens the material, enabling a reduction in the amount of carbon-intensive cement required. Another investment is Prometheus Materials, a company producing zero-carbon bio-concrete through a unique process that combines naturally occurring microalgae with other components.  

Explore the Sustainable by design series

With these investments, we aim to facilitate the commercialization of materials innovations that can make an outsized impact on carbon reduction for our own buildings and for built environments around the world. 

Learn more about our work to advance the sustainability of AI with the Sustainable by design blog series: 

• Sustainable by design: Advancing the sustainability of AI
• Sustainable by design: Transforming datacenter water efficiency
• Sustainable by design: Innovating for energy efficiency in AI, part 1
• Sustainable by design: Innovating for energy efficiency in AI, part 2
• Sustainable by design: Innovating for zero waste

¹ Nature Research, Cement and steel—nine steps to net zero. 

² Stegra, Green platforms—green hydrogen, green iron, and green steel. 

The post Sustainable by design: Advancing low carbon materials appeared first on The Microsoft Cloud Blog.

Accelerating innovation and partnership for people and the planet

Four years ago, Microsoft committed that, by 2030, we would become carbon negative, water positive, zero waste, and protect more land than we use. Since that announcement, we have seen major changes both in the technology sector and in our understanding of what it will take to meet our climate goals. New technologies, including generative AI, hold promise for new innovations that can help address the climate crisis. At the same time, the infrastructure and electricity needed for these technologies create new challenges for meeting sustainability commitments across the tech sector. As we take stock as a company in 2024, we remain resolute in our commitment to meet our climate goals and to empower others with the technology needed to build a more sustainable future.

At the end of last year, the world met in Dubai at COP28 to assess global sustainability progress. The results were sobering. The world is not on track to meet critical climate goals, and we see many of the world’s challenges reflected in our own situation. During the past four years, we have overcome multiple bottlenecks and have accelerated progress in meaningful ways. As we report here, we are on track in several areas. But not in every area. We therefore are mobilizing to accelerate progress in areas where we’re not yet on track.

In four areas we are on track, and in each of these we see progress that has the potential to have global impact beyond our own sustainability work. These are:

• Reducing our direct operational emissions (Scope 1 and 2)
• Accelerating carbon removal
• Designing for circularity to minimize waste and reusing cloud hardware
• Improving biodiversity and protecting more land than we use

At the same time, there are two areas where we’re not yet on track, and in each of these we are intensively engaged in work to identify and pursue additional breakthroughs. These are:

• Reducing our Scope 3, or indirect, emissions
• Reducing water use and replenishing more water than we consume in our datacenter operations

Even amid the challenges, we remain optimistic. We’re encouraged by ongoing progress across our campuses and datacenters, and throughout our value chain. Even more, we’re inspired by the scores of executives and employees across Microsoft who are rolling up their sleeves and identifying new and innovative steps that are helping us to close critical gaps. We all recognize the same thing: There is no issue today that connects everyone on the planet more than the issues around climate change. We all need to succeed together.

Carbon negative

Our carbon negative commitment includes three primary areas: reducing carbon emissions; increasing use of carbon-free electricity; and carbon removal. We made meaningful progress on carbon-free electricity and carbon removal in FY23. Microsoft has taken a first-mover approach to supporting carbon-free electricity infrastructure, making long-term investments to bring more carbon-free electricity onto the grids where we operate.

In 2023, we increased our contracted portfolio of renewable energy assets to more than 19.8 gigawatts (GW), including projects in 21 countries. In FY23, we also contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years. We are continuing to build a portfolio of projects, balanced across low, medium, and high durability solutions.

Carbon reduction continues to be an area of focus, especially as we work to address Scope 3 emissions. In 2023, we saw our Scope 1 and 2 emissions decrease by 6.3% from our 2020 baseline. This area remains on track to meet our goals. But our indirect emissions (Scope 3) increased by 30.9%. In aggregate, across all Scopes 1–3, Microsoft’s emissions are up 29.1% from the 2020 baseline.

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.

We have launched a company-wide initiative to identify and develop the added measures we’ll need to reduce our Scope 3 emissions.

Leaders in every area of the company have stepped up to sponsor and drive this work. This led to the development of more than 80 discrete and significant measures that will help us reduce these emissions – including a new requirement for select scale, high-volume suppliers to use 100% carbon-free electricity for Microsoft delivered goods and services by 2030. As a whole, this work builds on our multi-prong strategy, this year focusing on the following:

1. Improving measurement by harnessing the power of digital technology to garner better insight and action
2. Increasing efficiency by applying datacenter innovations that improve efficiency as quickly as possible
3. Forging partnerships to accelerate technology breakthroughs through our investments and AI capabilities, including for greener steel, concrete, and fuels
4. Building markets by using our purchasing power to accelerate market demand for these types of breakthroughs
5. Advocating for public policy changes that will accelerate climate advances

Water positive

We take a holistic approach to becoming water positive, which includes water access, replenishment, innovation, reduction, and policy. In 2023, we achieved our water access target by providing more than 1.5 million people with access to clean water and sanitation solutions. We contracted water replenishment projects estimated to provide more than 25 million m³ in volumetric water benefit over the lifetime of these projects – enough water to fill about 10,000 Olympic-sized swimming pools. Finally, we continue to drive innovation in water, through first-of-their kind replenishment projects like FIDO, which leverages AI-enabled acoustic analysis to reduce water loss from leakage.

Looking ahead, as our datacenter business continues to grow, so does the need to minimize our water consumption and replenish more than we consume in these operations. In FY23, our progress on water accelerated, and we know we need to implement an even stronger plan to accelerate it further. We therefore are investing in our water positive commitment in four ways:

1. We are taking action to reduce the intensity with which we withdraw resources by continuing to design and innovate in order to minimize water use and achieve our intensity target
2. Our new datacenters are designed and optimized to support AI workloads and will consume zero water for cooling. This initiative aims to further reduce our global reliance on freshwater resources as AI compute demands increase
3. We are partnering to advance water policy. In 2023, we joined the Coalition for Water Recycling. Over the coming year we will finalize a position and strategy for water policy
4. We are developing innovative scalable replenishment projects in high water stress locations where we operate datacenters. We recently announced Water United, a new initiative to unite public and private sectors in reducing water loss from leakage across the Colorado River Basin

Zero waste

Our journey to zero waste includes reducing waste at our campuses and datacenters, advancing circular cloud hardware and packaging, and improving device and packaging circularity. In FY23, we achieved a reuse and recycle rate of 89.4% for servers and components across all cloud hardware, a target that is increasingly important as needs for cloud services continue to grow. In 2023, we also diverted more than 18,537 metric tons of waste from landfills or incinerators across our owned datacenters and campuses, and we reduced single-use plastics in our Microsoft product packaging to 2.7%.

From expanding our Circular Centers to piloting programs that give a second life to used fiber optic cables through partnerships with local technical schools, we are working to keep materials in use longer and approach our work at every stage with circularity in mind. We are accelerating our work to reuse and recycle cloud hardware wherever possible, and launched two new Circular Centers in Quincy, Washington, and Chicago, Illinois in 2023.

Protecting ecosystems

We have committed to protecting more land than we use by 2025, while preserving and restoring ecosystems in the areas where we live and work. As of FY23, we exceeded our land protection target by more than 40%. At this point, 15,849 acres of land have been legally designated as permanently protected compared to our goal of 11,000 acres.

We are incorporating green business practices that support the surrounding ecosystems near our campuses and datacenters. This includes regenerative design solutions around our datacenters that enhance local biodiversity, improved stormwater management, and contributing to climate resilience. We are also piloting AI-driven Microsoft technology to provide insights into the overall health of the ecosystem and inform future actions.

Customer and global sustainability

In last year’s Environmental Sustainability Report, we announced that we were expanding our ambition to help advance sustainability for our customers and the world. In 2023, we continued this work to empower our customers and partners on their own sustainability journey by creating the technology needed to better manage resources and optimize systems. On a global scale, we focused on accelerating innovation, research, and policy, not only for ourselves but also to support a more sustainable world for all.

The shift from pledges to progress requires action, transparency, and accountability. Microsoft Cloud for Sustainability is helping customers unify data and garner richer insights into the sustainability of their business. In 2023, we expanded Microsoft Sustainability Manager to include Scopes 1, 2, and all 15 categories of Scope 3 carbon emissions to help track progress and inform action across an organization’s operations and value chains.

As the world experiences worsening impacts of climate change, we are also helping to put planetary data into the hands of researchers, governments, companies, and individuals through the Planetary Computer. We are providing open access to petabytes of environmental monitoring data to help empower people with actionable information to protect their communities.

Microsoft’s sustainability progress requires global engagement. We are investing in innovative solutions, advancing research, and advocating for policies that we believe can drive progress at scale. A hallmark of this effort has been our Climate Innovation Fund (CIF) – our $1 billion commitment set in 2020 to advance innovation beyond Microsoft’s four walls. To date, the CIF has allocated $761 million toward innovative climate technologies including commercial direct air-capture technologies, sustainable aviation fuel (SAF), industrial decarbonization, and more.

Our science, research, and AI for Good teams are also working to accelerate solutions and develop climate resilience with AI. In November 2023, we published a whitepaper and playbook that expands on the incredible potential of AI for sustainability. Through our AI for Good team, we are collaborating with the United Nations to research the use of AI to advance the Early Warning for All Initiative, with a goal of better understanding the populations that may be at risk of extreme weather events and other threats.

Last year, Microsoft CEO Satya Nadella called climate change “the defining issue of our generation.” To meet this generational challenge, we are putting sustainability at the center of our work. With each emerging technology, with each new opportunity, we ask ourselves an important question: How can we advance sustainability?

As we strive to answer that question, we are developing new approaches, experimenting with new partnerships, and learning as we go. We are optimistic about the role technology can continue to play in accelerating climate progress, and we look forward to working with others on this critical journey for all of us.

The post Our 2024 Environmental Sustainability Report appeared first on The Microsoft Cloud Blog.

Today, Microsoft published a playbook for accelerating sustainability solutions with AI. You can read the foreword below and explore the piece in its entirety here.

AI is an essential tool for accelerating sustainability
Given the urgency of the planetary crisis, society needs to push harder on the AI accelerator while establishing guardrails that steer the world safely, securely, and equitably toward net-zero emissions, climate resilience, and a nature-positive future.

This year the world experienced the impacts of climate change like never before, from devastating wildfires to extreme weather. We are seeing and feeling the impact of climate change in our communities every day, and the science is clear: we need to act at an unprecedented scale and pace to address this crisis. It’s an enormous challenge and an enormous opportunity for the world to accelerate climate progress.

At Microsoft, we believe that for our company to do well, the world also needs to do well. We are at a critical moment for environmental sustainability, and we need government leaders, businesses, and civil society working in tandem. We also need to use every tool at our disposal to aid us in this journey, including AI.

AI is a vital tool to help accelerate the deployment of existing sustainability solutions and the development of new ones – faster, cheaper, and better.
In this paper, we outline the opportunities that AI provides for accelerating sustainability and the actions needed to ensure that we unlock the full potential of AI for sustainability.

AI’s three game-changing abilities
On the journey to net zero, the world has faced many bottlenecks to progress. AI has three unique abilities that can help society overcome key bottlenecks to this progress. These include the ability to:

1) Measure, predict, and optimize complex systems.

2) Accelerate the development of sustainability solutions.

3) Empower the sustainability workforce.

Measure, predict, and optimize complex systems

AI can enable people to discern patterns, predict outcomes, and optimize performance in systems that are too complex for traditional analytic methods. Sustainability practitioners are increasingly using AI’s analytical power for measuring and managing systems. Consider wildfires, which release about 7 gigatons (Gt) of carbon dioxide a year to the atmosphere. Wildfires are difficult to predict because of the complex interplay of many factors, including weather, vegetation, and land use. AI is enabling better wildfire prediction and making better management possible. At Microsoft, we are working with partners to use AI to help communities reduce wildfire risk.

Accelerate the development of sustainability solutions

AI can accelerate the discovery and development of sustainability solutions such as low-carbon materials, renewable energy production and storage, and climate-resilient crops. While AI is already contributing to sustainability-related discoveries, its transformative potential is only beginning to be realized. However, AI’s game-changing potential has already been demonstrated in other sectors. For example, AI was instrumental in accelerating the development of vaccines that mitigated the severity of the COVID-19 pandemic. AI was used to screen candidate messenger RNA (mRNA) molecules, which allowed Moderna to produce an effective COVID-19 vaccine in only six weeks, compared with the four years it would have taken with traditional methods.

Empower the sustainability workforce

AI can empower the sustainability workforce by enabling targeted training and assistance, while amplifying the efforts of sustainability professionals. We are working with partners to use large language models (LLMs) to access and distill the vast archives of sustainability science and policy documents so that sustainability professionals can easily find the information they need to understand and manage complex sustainability challenges.

In Part 1 of this report, we explore each of these three game-changing abilities in more detail.

Given the urgency of the planetary crisis, society needs to push harder on the AI accelerator while establishing guardrails that steer the world safely, securely, and equitably toward net-zero emissions, climate resilience, and a nature-positive future.

Microsoft’s AI & Sustainability Playbook
The global technology, energy, and policy landscape is ripe to be primed to unlock AI’s transformative potential for sustainability. This white paper introduces our five-point playbook for creating the needed enabling conditions.

Invest in AI to accelerate sustainability solutions
Develop digital and data infrastructure for the inclusive use of AI for sustainability
Minimize resource use in AI operations
Advance AI policy principles and governance for sustainability
Build workforce capacity to use AI for sustainability
These actions can unleash a flywheel for progress. AI can enable the development and deployment of sustainability solutions that accelerate decarbonization, which can enable the development of more sustainable AI operations, which in turn can enable AI to scale the deployment of more sustainability solutions. In Part 2 of this report, we describe this five-point playbook, summarized here.

Invest in AI to accelerate sustainability solutions
AI has numerous applications that can enhance efficiency, optimize business operations, and provide game-changing breakthroughs to sustainability bottlenecks. AI can help to expedite the integration of renewables onto electric grids, develop energy storage solutions, reduce food waste, foster the creation of high carbon-absorbing materials, and enable accurate weather forecasting weeks or even months in advance of current capabilities.

At Microsoft, through our AI for Good Lab, Microsoft Research’s AI4Science Lab, and Microsoft Climate Research Initiative (MCRI), we are already applying AI to overcome large sustainability bottlenecks. For example, in one MCRI project, we are partnering with researchers at the Massachusetts Institute of Technology (MIT) and University of California, Berkeley (UC Berkeley) to use generative machine learning models to develop new materials and system engineering approaches for applications such as carbon capture. Through the Microsoft Climate Innovation Fund, we are investing in companies like LineVision that are using AI to expand the capacity of transmission lines.

Develop digital and data infrastructure for the inclusive use of AI for sustainability
Data is the foundation on which AI operates, shaping its insights, predictions, and decision-making capabilities. Yet, there are major gaps and accessibility challenges that constrain the development of accurate and representative AI models for sustainability. For example, while AI is critical for optimizing the world’s electricity distribution networks, its use is limited by the availability of detailed, real-time data, which is lacking in many regions. Or, consider biodiversity data, where 80 percent of data in the Global Biodiversity Information Facility (GBIF) comes from just 10 countries.

Even when data exists, it can be inaccessible or difficult to use because it is locked in institutional silos, not digitalized, or in incompatible formats. Data standards, sharing mechanisms, and platforms are needed to increase the usability of sustainability data in AI models.

To use the full potential of AI, sustainability solution providers need access to the internet and compute capacity. The Microsoft Airband Initiative is working with our global ecosystem of partners to bring internet access to 250 million people in unserved and underserved communities around the world by 2025, including 100 million in Africa.

Minimize resource use in AI operations
As the infrastructure needed to support AI models expands, demand for resources such as energy and water will rise. History suggests that innovation can curb that demand. Take datacenters, for example. Between 2010 and 2020, global datacenter workloads increased by approximately 9x, while datacenter electricity demand increased by only 10 percent.

At Microsoft, we are continuously researching and innovating ways to make our datacenters and AI systems ever more energy and water efficient. We are reducing our dependence on freshwater from municipal sources for datacenter cooling and investing in water replenishment in water-stressed basins. We have also been developing advanced cooling methods such as liquid cooling to support AI chips with lower energy and water overheads. We have partnered with the Green Software Foundation to develop and advance carbon-aware software practices, such as software designed to run at times and locations that use the least carbon-intensive electricity sources available. These principles apply to all software workloads, including AI.

Advance AI policy principles and governance for sustainability
AI technologies can have a positive impact on both the environment and society by accelerating sustainable business practices and the energy transition. The infrastructure that hosts the computing power needed to yield these benefits may affect resource use too, such as by increasing power needs while reducing water reliance. Governments have an opportunity to enable the positive impacts of AI by crafting policies that harness its capabilities to benefit and ensure alignment with sustainability outcomes while also mitigating the resource impact that will result from the increased demand for AI.

At Microsoft, we will continue to use our voice to support grid decarbonization and carbon reporting, reduction, and removal policies. In September 2022, we outlined the priorities and principles that guide our advocacy on carbon and electricity policy around the world to accelerate carbon reporting, reduction, and removal and to expand carbon-free electricity. We also intend to expand our advocacy for extending existing sustainability policy frameworks to include AI and aligning government policies to incentivize the use of AI to enable sustainability outcomes.

We also persist in our efforts to strengthen AI governance, helping to ensure trust among users, stakeholders, and the wider public—an indispensable basis for AI’s integral role in advancing sustainability. As the application of AI expands into critical sustainability infrastructure, including power grids and water utilities, the safety, security, and reliability of these AI systems become paramount. We are committed to building and using AI responsibly, as recently outlined in our Governing AI report.

Build workforce capacity to use AI for sustainability
To harness the transformative power of AI for sustainability requires a solid foundation of human capacity to use AI tools.

Building a workforce prepared to use AI for sustainability requires holistic learning pathways that cultivate AI fluency within the context of sustainability. To help people and communities around the world learn how to harness the power of AI, Microsoft recently launched a new AI Skills Initiative. We have also committed to bringing these AI skills to the sustainability workforce. Last year, we partnered with the global nonprofit INCO to launch a new Green Digital Skills certificate program to educate workers and jobseekers on the foundations of sustainability in technology and green design principles and practices. To date, 30,000 people from 140 countries have engaged in the certificate program.

Tracking AI’s impact on the global race to net zero
To ensure that AI is on track to accelerate sustainability progress, it will be essential to continually assess AI’s expected impact on the race to net zero. But this is not an easy task, as it requires projecting a range of interacting and uncertain factors, such as socioeconomic, policy, and technological developments.

Currently, AI compute accounts for only a fraction of the electricity used by datacenters, which collectively use about 1 percent of global electricity supply. How much this increases and how AI growth affects the global race to net zero will depend on many factors. Innovations that drive efficiency gains in both the computing infrastructure and AI operations will have a large impact on future AI energy use. The carbon emissions implications of increased energy demand will depend on the broader policy context in which AI operates and how rapidly electric grids are decarbonized. And finally, AI’s mpact on the global race to net zero depends on how much it enables sustainability solutions.

In Part 3 of this report, we explore what is needed to better assess and track AI’s impact on the global path to net zero. In particular, we highlight the importance of using scenario analysis to help inform and guide AI development for sustainability.

Understanding AI’s impact on the global race to net-zero emissions requires answering three questions:

How much energy is the global expansion of AI compute likely to consume?
How fast will the world’s electric grids decarbonize?
To what extent will AI enable sustainability solutions?
To use AI effectively to accelerate sustainability, businesses, governments, and civil society must work together to create the enabling conditions while continually monitoring the factors that will determine AI’s impact on the world’s race to net zero.

When we use it ethically and responsibly, AI can be an essential tool to accelerate progress toward sustainability. Together, we have the opportunity to ensure that it does. We invite you to join us in unlocking the accelerating power of AI for sustainability.

The post Accelerating Sustainability with AI: A Playbook appeared first on The Microsoft Cloud Blog.