As screenshots from Microsoft's latest sustainability report spread online, many social media users falsely believed the 37.5 million tons (34 million metric tons) of carbon pollution was the company's annual total.
Microsoft did not report that figure as its actual emissions for the year.
What the filing does show is a steep increase in emissions as AI data centers expand. The largest number that went viral came from an estimate rather than from Microsoft's official emissions inventory.
What happened?
One of the report's main disclosures was a 25% year-over-year increase in emissions. Microsoft ties much of that rise to AI data center growth and to its decision to stop buying unbundled renewable energy certificates.
According to Windows Central, the 37.5 million tons (34 million metric tons) figure that circulated online was not listed by Microsoft as its actual annual emissions total.
The company's reported emissions for the year came to about 22 million tons (20 million metric tons).
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The larger figure came from a dotted-line chart showing an "illustrative counterfactual scenario," estimating what emissions might have looked like without certain carbon-cutting measures.
Those measures included efficiency upgrades for Xbox consoles, renewable energy purchases, SAF and SMF certificates, and supply chain decarbonization for Surface devices.
Why does it matter?
Even with that clarification, about 22 million tons (20 million metric tons) of emissions are still a massive footprint. The report is another sign that the AI boom is colliding with climate goals as companies race to build energy-intensive data centers.
Training and operating large AI models require enormous amounts of electricity and water for cooling at many facilities. At the same time, AI can help utilities improve efficiency across energy grids.
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Technology that could help support a cleaner energy system can also strain it, increase costs, raise water demand, and create security or misuse risks if growth outpaces oversight.
Even if Microsoft bought more unbundled renewable energy certificates again, they wouldn't solve this problem either.
The U.S. Environmental Protection Agency said, "Unbundled Renewable Energy Certificates (RECs) refer to RECs that are sold, delivered, or purchased separately from electricity. RECs provide no physical delivery of electricity to customers and as such the customer is purchasing power from a separate entity than the one selling them the REC."
Critics often see those credits as a form of greenwashing because they allow companies to claim renewable energy attributes without directly using that clean power.
What's being done?
Microsoft says it is redirecting money away from those unbundled certificates and toward "more long-term, higher-impact investments across carbon reduction, carbon removal, and clean electricity procurement."
The report also points to other efforts like water stewardship. Microsoft said it put back more water than it took out during the year as data center water use faces growing scrutiny.
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