Microsoft’s Carbon Credit Reckoning

In January 2020, Microsoft pledged to be carbon negative by 2030.  Microsoft pursued this goal through three simultaneous strategies: reducing operational emissions, transitioning to renewable energy through long-term PPAs and direct investments, and purchasing carbon credits for residual and historical emissions that cannot be eliminated internally. In the year since the pledge, AI infrastructure has become a major new driver of electricity demand and a significant portion of Microsoft’s total emissions.  In this case, students consider the next steps for Microsoft and its decarbonization goals.  Is Microsoft’s hybrid portfolio the best strategy? Should a company whose emissions are rising 25% a year be buying removals at all? And if Microsoft, with its cash flow and motivation, cannot make the math work, who can?