The focus on removing existing carbon from the atmosphere sets Microsoft's climate goals apart from other corporate pledges which have focused on cutting ongoing emissions or preventing future ones.
Speaking from a stage at Microsoft's headquarters in Redmond, Washington, Chief Executive Satya Nadella said that corporations need to create profitable solutions for the problems of both people and planet.
"If the last decade has taught us anything, it's that technology built without these principles can do more harm than good," he said. "We must begin to offset the damaging effects of climate change," he said, adding if global temperatures continue to rise unabated "the results will be devastating."
The announcement by the world's largest software company is the latest in a flurry of climate goals set out by firms after President Donald Trump announced in 2017 his decision to pull the United States out of the Paris Agreement, the global pact to fight climate change.
Microsoft plans to cut its carbon emissions by more than half by 2030 across its supply chain. The plan includes the creation of a "Climate Innovation Fund," which will invest $1 billion over the next four years to speed up the development of carbon removal technology.
Co-founder Bill Gates was an early backer of BritishColumbia-based Carbon Engineering, one of a handful of companies developing direct air capture technology.
Microsoft's goal to have removed enough carbon by 2050 to account for all its emissions since its founding in 1975 encompasses direct emissions from sources such as company vehicles and indirect emissions from electricity use, it said.
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But even as technology companies have stepped in with their own climate goal plans, they have faced criticism from their employees for doing too little.
Amazon.com Inc, the world's largest online retailer, last year pledged to be "net zero carbon" by 2040 and to buy 100,000 electric delivery vans from a startup, after employee activists pushed the retailer to take a tougher stance on climate change.
Microsoft plans to become net zero carbon a decade earlier than Amazon, although this is in part because its emissions are roughly a third less. Microsoft expects to release 16 million metric tons of CO2 in 2020, including indirect emissions from activities like corporate travel.
Amazon runs a bigger cloud business than Microsoft and a massive retail and logistics organisation, with packaging, delivery and customer trips to its chain of Whole Foods stores all piling on to its carbon footprint. Including indirect sources, it emitted more than 44 million metric tons of carbon in 2018.
It was not immediately clear if the figures reported by the companies were exactly comparable. Both Microsoft and Amazon have come under fire from activist tech workers who have demanded they stop supplying technology to oil and gas companies.
Microsoft in 2017 announced a multi-year deal to sell cloud services to US energy giant Chevron Corp.
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