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Environmental advocacy group As You Sow has filed a proposal urging Microsoft to disclose the potential “reputational, legal, and operational risks” tied to its artificial intelligence (AI) and cloud services partnerships with the fossil fuel industry. The proposal, set to be discussed at Microsoft’s Annual Shareholders Meeting on December 10, raises questions about whether these alliances align with Microsoft’s public climate commitments.
In its filing with the U.S. Securities and Exchange Commission (SEC), As You Sow argues that Microsoft’s work with the oil and gas industry may expose shareholders to significant financial risks and reputational damage.
The organization notes that Microsoft is the leading cloud provider for the fossil fuel sector and cautions that its partnerships lack “credible external standards” to validate the net-zero carbon claims of its clients in the energy sector. According to the filing, these partnerships could result in “greenwashing allegations” as Microsoft selectively emphasizes the climate-positive aspects of its technologies while omitting the environmental risks linked to fossil fuel extraction.
Elsa Nightingale, principal ESG analyst at Canalys, highlighted the broader implications of such partnerships, stating, “Hyperscalers must decide what side of climate history they want to be on.” Citing Canalys research, Nightingale emphasized that expanding fossil fuel exploration through AI could conflict with Microsoft’s own net-zero goals, as well as those of the UN Paris Agreement.
Microsoft’s latest Environmental Sustainability Report showed a nearly 30% increase in the company’s carbon emissions since 2020, attributed to the construction of additional data centers needed for growing cloud demands.
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