Today, Microsoft published its 2026 Environmental Sustainability Report. This report covers our fiscal year 2025, and measures progress against our 2020 baseline. You can read the foreword below and explore the report in its entirety here. 

As we enter a new era for AI, Microsoft’s environmental sustainability work is entering a new phase—defined not only by ambition, but by how we deliver in a period of rapid technological change. In our pursuit of becoming a carbon negative, water positive, and zero waste company that protects ecosystems, the context has evolved, and so must our approach. 

The global shift toward AI is reshaping economies, accelerating innovation, and becoming foundational to how technology is built and used. It is also increasing demand for the energy, water, land, and materials required to support that growth. As a company at the forefront of this transition, Microsoft has a responsibility to help ensure that technology strengthens, rather than strains, the systems and communities on which it depends. This imperative is reshaping the context for our work. 

We are approaching this moment with clarity and conviction. We believe AI can deliver broad societal, economic, and environmental benefits, but innovation at this scale must be matched by responsibility at the same scale. For Microsoft, this means designing, building, and operating infrastructure that is more efficient, more resilient, and more grounded in the realities of the communities where we operate. 

We do not see these dynamics as a reason to step back. We see them as a mandate to lead differently. That requires greater operational rigor, stronger integration across our sustainability priorities, and a sharper focus on durable outcomes for the local communities where we work and the global value chains that make our work possible. It also requires being transparent about where progress is advancing, where it is more difficult, and where new approaches are needed. 

The path forward will not be defined by simple tradeoffs or single solutions. It will depend on how effectively we align innovation with stewardship. The systems we build to support the future must also support the long-term health of the planet and the communities we serve. Our experience makes clear that this is possible, but only with even greater discipline, partnership, and a willingness to learn and adapt as conditions evolve. 

What this moment requires 

Our aim is to build technology that gives more than it uses. Lasting progress depends on how we build it and whether that growth strengthens the places where it takes root.  

This thinking is reflected in our Community First AI Infrastructure approach, which is helping shape a more integrated model for community partnership, responsible operations, and environmental performance as we grow. In this way, sustainability is not separate from growth; it is part of how responsible growth is defined. 

While AI infrastructure is driving demand for energy, water, land, and materials, sustainability solutions are not scaling fast enough to meet demand. This tension is real, and it is also productive. 

It is forcing sharper questions: Where do we need to move faster, invest differently, or rethink our approach? Which assumptions still hold, which ones need to evolve? Five years into this work, we have more operational data, more direct experience, and a clearer view of what measurable planetary progress actually requires. That perspective helps keep us focused on outcomes rather than attached to any single pathway. 

We want to be clear about what this means—and what it does not. It means being more precise about what sustainability requires for Microsoft, and more willing to refine our strategies as conditions change, data improves, and tradeoffs become clearer. It does not mean we are lowering our ambition. 

Progress amid growth 

Our results reflect both progress and pressure. As we scale the physical infrastructure required to power the AI economy, our emissions are shaped by the impact of that growth and the actions we are taking to manage it. 

The visual that follows illustrates this dynamic by comparing our reported emissions with a modeled view of where emissions may have been in the absence of four specific interventions: carbon free electricity, sustainable fuels, XBOX console efficiency, and Surface device decarbonization. While these examples represent only a portion of our emissions reduction efforts, they highlight an important lesson from our work to date: that well-designed, targeted interventions can deliver measurable progress even as demand for infrastructure continues to rise.

In FY25, we matched 100% of our annual global electricity consumption with renewable energy^[2]. Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity (CFE) ^[3] to the grids where we operate, complementing and building on 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 we will continue to support this approach moving forward.

Our total emissions (Scopes 1, 2, and 3) increased 25% year over year, driven primarily by the expansion of our datacenter infrastructure and pausing our use of non-additional, unbundled renewable energy certificates as we prioritize investments that bring net new power to grids. While this decision increases our reported emissions in the near term, it enables us to increase the development of new CFE rather than relying on certificates alone. We believe this change will create more long-term sustainability benefits. Growth-related emissions pressure was expected. The more important signal is where that pressure is concentrated. 

Scope 3 remains the largest share of our footprint overall, but one of the clearest changes this year was the growing contribution of Scope 2, which represents 13% of our total emissions—up from nearly 2% last year. This development highlights how important the energy systems across our supply chain are in shaping environmental outcomes. 

This year’s results also made clear that progress now depends on adapting how we work. 

Water is one of the clearest examples. In FY25, we replenished for the first time more water globally than we withdrew—more than 14 million cubic meters—marking a major milestone on our journey to become water positive. Reaching this point reflects years of work to improve water efficiency, expand replenishment efforts, and scale partnerships around the world. 

We are proud of this achievement but also know that replenishing global volumes is not enough. The next phase of our work is increasingly local. As we move forward, we are placing greater focus on helping restore more water to the watersheds where we operate than we withdraw while strengthening long-term water resilience. We prioritize projects in water-stressed regions that are locally relevant and designed in partnership with communities, delivering benefits not only for water availability, but also for ecosystems, economies, and people. Through this approach, we aim to ensure our growth supports and helps sustain the communities and environments where we operate. 

Transparency remains central to how we work and how we report. Microsoft has eliminated nearly all single-use plastics in our primary product packaging, reducing the share that remained to just 0.07% at the end of calendar year 2025.^[4] But we are not rounding down. We are staying accountable to the work required to eliminate them entirely. 

Across our cloud operations, we achieved 92% reuse and recycling of decommissioned servers and components for the second consecutive year, diverted 90.5% of construction and demolition waste from landfills and incinerators, and expanded our Circular Centers to seven facilities globally. These results also reflect a broader shift toward solutions that have co-benefits—reducing both emissions and resource demand over time. 

Throughout this journey, we have learned that progress in one area often depends on progress in another. Clean energy investments are essential to decarbonization. Water use is linked not only to our operations, but also to the energy systems that power them. And extending hardware life through circular approaches can reduce both emissions and material demand across the value chain. 

That is why our priorities extend beyond tracking progress against individual commitments on water, carbon, waste, and ecosystems as though they move independently. Our experience has made clear that progress does not happen pillar by pillar. Some of the most consequential work ahead will be measured in whether we address system challenges and help build the conditions for long-term progress: more resilient grids, stronger markets for lower-carbon materials, more effective water stewardship, and infrastructure designed and operated with local realities and community priorities in mind. 

For that reason, this year’s report takes a more integrated approach—placing progress against our commitments in the broader context of how those commitments are operationalized across our infrastructure and products. 

What’s next 

We are proud of what we have accomplished, and we remain humbled by the scale of the challenge ahead. Responsibly building the AI future requires clear accountability for what AI demands, candor about real constraints and tradeoffs, and sustained focus on outcomes that are durable and broadly shared. The chapters that follow show how we translate that intent into execution across our physical infrastructure, products, and value chain—where our sustainability commitments become operational reality.

Read the full report: https://aka.ms/SustainabilityReport2026 

[1] The solid line represents Microsoft’s reported greenhouse gas emissions (Scopes 1, 2, and 3) for FY20–FY25, prepared in accordance with GHG Protocol and management’s criteria, and uses a market-based emissions approach. The dotted line represents an illustrative counterfactual scenario of estimated emissions had select, discrete carbon reduction initiatives not been undertaken. These initiatives include energy efficiency improvements for XBOX consoles, renewable energy purchases, sustainable aviation fuel (SAF) and sustainable marine fuel (SMF) certificates, and supply chain decarbonization of Surface devices. The difference
between the two lines is an estimate of emissions avoided through these specific initiatives relative to a scenario without those initiatives occurring. This estimate is directional in nature, does not represent the full scope of Microsoft’s decarbonization efforts, and is not part of our reported greenhouse gas inventory. It should not be interpreted as a comprehensive measure of total emissions reductions or as additive to other carbon reduction or removal claims.

[2] Microsoft defines renewable energy as electricity that comes from sources that are replenished at a rate greater than or equal to their rate of depletion, such as geothermal, wind, solar, hydro, and biomass. 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.

[3] Microsoft defines carbon-free electricity (CFE) technologies as technologies with zero direct emissions and biogenic technologies with lifecycle emissions equivalent to renewables. CFE technologies include wind; solar; geothermal; sustainable biomass; hydropower; nuclear; fossil fuels with complete carbon capture, utilization, and sequestration; and storage charged with CFE generation.

[4] By weight, as designed, portfolio average. More details can be found in our Environmental Data Fact Sheet.

The post Responsibly building the AI future appeared first on Microsoft On the Issues.

Ahead of Mobile World Congress, where global leaders, governments, and industry convene at the world’s largest connectivity event, Microsoft is marking a major milestone in our efforts to expand digital access worldwide. In 2022, we made a bold commitment to expand internet access to 250 million people by the end of 2025. Today, we are proud to share that we have met and exceeded that goal, extending connectivity coverage to over 299 million people worldwide, including more than 124 million across Africa.

This milestone represents more than a number. It reflects more than a decade of sustained collaboration with governments, nonprofits, local connectivity providers, and development partners around the world. Together, we have worked to reach communities where access has historically been limited, building pathways to education, healthcare, economic opportunity, and digital participation.

Reaching this milestone is also a moment of reflection and renewal. Building on years of progress, Microsoft is evolving its approach to digital access to focus not only on coverage, but on adoption, enablement, and long-term participation in the AI economy.

As part of this next chapter, we are announcing a new collaboration with Starlink. This collaboration expands the set of tools available to help deliver digital access in rural, agricultural, and hard-to-reach communities. Combined with local delivery partners and community institutions, it strengthens the foundation for AI-ready communities around the world.

Why digital access matters in the AI era

Despite continued progress, 2.2 billion people globally remain offline, and many more face barriers related to affordability, reliability, or access to relevant digital services. These gaps already limit opportunity and risk widening as AI becomes more central to how economies grow and societies function.

At Mobile World Congress 2024, Microsoft Vice Chair and President Brad Smith shared our AI Access Principles, underscoring that electricity and connectivity are essential foundations for an inclusive AI economy. Since then, the pace of change has only accelerated. In fact, Microsoft’s 2025 AI Diffusion Report shows that AI is being adopted faster than any general-purpose technology in history, yet adoption remains uneven. As the data illustrates, adoption in the Global North is accelerating faster than in the Global South. Differences in infrastructure, access to tools, and digital readiness all contribute to a growing divide between higher-income and lower-income economies.

This graphic from the 2025 AI Diffusion Report reinforces a clear insight: access to AI alone is not enough. For communities to participate meaningfully in the digital and AI era, connectivity must be paired with reliable energy, affordable devices, digital skills, and technologies designed for real-world use. Where these conditions exist, adoption follows. In Zambia, for example, country-wide generative AI adoption is 12 percent, but among those with internet access, it rises to 34 percent.

Deepening Microsoft’s approach to digital access

Building on what we have learned, Microsoft is advancing a more holistic digital access model that recognizes connectivity as only one part of a broader system. In practice, this means collaboration to deliver not only internet access but also more reliable energy infrastructure, access to water where relevant, devices, digital skills, and cloud and AI tools, all designed and deployed for the communities they serve. By working across organizations and governments to address these foundational needs in parallel, this approach helps ensure that digital access is usable, durable, and capable of supporting real-world outcomes.

A central focus of this work is community-based access models that are financially sustainable, scalable, and aligned with national development priorities. These models bring together local institutions such as schools, health facilities, cooperatives, and community hubs and are implemented in partnership with governments, businesses, nonprofits, and development finance organizations. By integrating infrastructure, enablement, and financing from the outset, these holistic programs can help unlock long-term investment, support responsible growth, and enable communities to fully participate in the digital and AI economy.

Digital access directly complements Microsoft’s Community First AI Infrastructure approach by providing the foundation that enables AI to be adopted, used, and trusted by communities everywhere.

Partnering to deliver impact at scale

Progress at this scale is only possible through strong partnerships rooted in local delivery, community trust, and long-term sustainability. Microsoft’s work to extend connectivity to more than 299 million people has been built alongside partners who understand the realities of last-mile deployment and digital adoption.

In Africa, Microsoft works with partners such as Cassava Technologies to expand regional digital infrastructure and drive high-quality internet access across South Africa, Malawi, Kenya, and Zambia. Collaborations with local providers like Tizeti deliver affordable, reliable connectivity through solar-powered Wi-Fi networks across Nigeria and Ghana.

In Latin America, Microsoft’s partnership with Anditel focuses on expanding internet and energy access for rural and agrarian communities in Colombia through locally led models aligned with national priorities. In India, Microsoft works with AirJaldi to pair affordable connectivity with digital skills training and practical pathways for use, helping communities move beyond basic access toward meaningful adoption.

These partnerships made reaching the 250 million milestone possible. They also reflect a principle that continues to guide our work. Lasting digital access is built with communities, not for them.

Expanding the portfolio: Collaboration with Starlink

Building on this foundation, Microsoft continues to expand and diversify its portfolio to reach communities where traditional infrastructure alone cannot meet demand.

Through our collaboration with Starlink, Microsoft is combining low-Earth orbit satellite connectivity with community-based deployment models and local ecosystem partnerships. This is intended to expand the set of tools available to deliver digital access while remaining firmly embedded in a holistic, partnership-driven approach.

Kenya offers an early example of this model in practice. Working with Starlink and local internet service provider Mawingu Networks, Microsoft is supporting connectivity for 450 community hubs across rural and underserved regions, including farmer cooperatives, aggregation centers, and digital hubs. These deployments combine satellite connectivity with digital skills, tools, and ecosystem coordination to support agricultural productivity, access to markets, and adoption of digital and AI-enabled services.

Beyond 250 million: Building AI-ready communities

Surpassing the 250 million connectivity milestone is a moment to celebrate. It is also a starting point for what comes next.

The next chapter of Microsoft’s digital access work is planned to focus on ensuring that access translates into adoption, use, and long-term opportunity. By continuing to partner with governments, development finance institutions, nonprofits, and private-sector partners, and by expanding into energy access, financing mechanisms, and community-first AI solutions, Microsoft is working to ensure that everyone, everywhere, can participate in the digital and AI economy.

The post Celebrating 250 million: Empowering communities to enable the global AI economy appeared first on Microsoft On the Issues.

The post A milestone achievement in our journey to carbon negative appeared first on Microsoft On the Issues.