Climate Change Data

Environmental Metrics

ESG Focus Areas

• Community Development
• Education
• Environmental Sustainability
• Employee Well-being

Environmental Achievements

• Reduced carbon footprint by 14.7% since 2008
• Won Platinum Award for Green Office Management and Green Purchasewise Bronze Award at the Hong Kong Green Awards 2010
• Achieved “Class of Good” Wastewise Label and Carbon “Less” 14% Certificate of the Hong Kong Awards for Environmental Excellence

Social Achievements

• Launched Cloud Unlimited initiative to support NGOs and schools with cloud computing
• Expanded TechDonation program to benefit more non-profits, providing over HK$60 million worth of software since 2007
• Donated HK$3.7 million to improve Community Technology Learning Centers (CTLCs)
• Implemented Student Volunteers Program, engaging 20 schools and NGOs
• Supported relief efforts in Japan and Yunnan earthquake with US$79,359 and US$46,386 respectively
• Organized the Innovative Education Forum 2011

Governance Achievements

• Received Caring Company Award Five Years Plus in recognition of continuous efforts in corporate social responsibility

Climate Goals & Targets

Environmental Challenges

• Resource pressure for NGOs and education sector hindering the adoption of IT

Mitigation Strategies

• Launched Cloud Unlimited initiative to address resource constraints for NGOs and schools

Supply Chain Management

Responsible Procurement

• Green purchasing policy (since 1994), including paper and automobile procurement

Climate-Related Risks & Opportunities

Awards & Recognition

• Caring Company Award Five Years Plus
• Platinum Award for Green Office Management
• Green Purchasewise Bronze Award
• “Class of Good” Wastewise Label
• Carbon “Less” 14% Certificate

Environmental Metrics

ESG Focus Areas

• Ethical Business Conduct and Governance
• Workforce Diversity and Inclusion
• Youth Empowerment
• Technology for Good
• Responsible Sourcing
• Environmental Sustainability
• Human Rights
• Privacy and Data Security

Environmental Achievements

• Purchased more than 3 billion kilowatt-hours of green power, equal to 100 percent of our global electricity use.
• Achieved a goal that all new datacenters have an average 1.125 Power Usage Effectiveness (PUE), which is one-third less than the industry average datacenter PUE of 1.7.
• Met our carbon neutrality commitment through internal efficiency projects, the purchase of more than 3 billion kilowatt hours (kWh) of renewable energy, and a carbon offset project portfolio representing more than 600,000 metric tons of carbon dioxide (CO2) emissions.

Social Achievements

• Microsoft YouthSpark initiative created opportunities for 227 million youth, including 124 million in FY14.
• Launched Office 365 for Nonprofits, donating $55 million worth of subscriptions to nearly 11,500 nonprofits globally.
• 86 percent of employees polled said they would recommend Microsoft as a great place to work.
• Percentage of women in the global workforce grew from 24 to 28 percent.
• Percentage of Microsoft senior executive women and minorities increased from 22 to 27 percent.

Governance Achievements

• Board of Directors appointed an independent Chairman, John Thompson.
• More than 99 percent of Microsoft employees completed annual training on Standards of Business Conduct.
• Total annual giving surpassed $1 billion for the first time.

Climate Goals & Targets

Environmental Challenges

• New challenges related to ensuring the privacy and security of customer data in the face of government surveillance practices.
• Addressing social and environmental issues in the hardware supply chain.

Mitigation Strategies

• Expanded use of encryption, provided choice and transparency on data location, strengthened legal protections for customers’ privacy.
• Completed 217 third-party audits and Microsoft assessments of 131 Tier 1 and high- and medium-risk Tier 2 hardware suppliers. Suppliers instituted corrective action plans for non-conformances.
• Began screening non-hardware suppliers against 23 ethical, social, and environmental risks.

Supply Chain Management

Supplier Audits: 217 audits and assessments of 131 suppliers

Responsible Procurement

• Supplier Code of Conduct, Social and Environmental Accountability (SEA) program, conflict minerals due diligence, risk-based approach to supplier management, Supplier YouthSpark Community Technology Centers.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services, renewable energy investments.

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines, UN Global Compact

Certifications: ISO 14001 (for hardware and packaging manufacturing supply chain)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient datacenters, energy-saving features in Windows and cloud services, energy-efficient Xbox consoles and Surface tablets.

Awards & Recognition

• CDP Global 500 Climate Performance Leadership Index (A rating)

Environmental Metrics

ESG Focus Areas

• Climate Change

Climate Goals & Targets

Environmental Challenges

• Underdeveloped Climate Finance Market Structure (CFMS)
• Insufficient GHG emissions pricing
• Lack of high-quality, comparable climate-related data
• Mismatch between capital demand and supply
• Market fragmentation

Mitigation Strategies

• Recommendations for scaling the CFMS (detailed in Section 4)
• Establishing legally enforceable carbon pricing mechanisms
• Implementing effective policies to support Paris Agreement targets
• Mobilizing private sector capital through blended finance
• Promoting financial education and climate risk awareness
• Accelerating development of climate finance products and instruments
• Achieving consensus on a common global definition of climate finance
• Integrating climate factors into investment processes
• Promoting innovation in financial markets
• Mitigating market fragmentation through globally consistent regulation

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Physical changes in the environment

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Climate Change
• Digital Transformation
• Sustainable Development
• Governance
• Social Inclusion

Environmental Achievements

• City of Edinburgh reduced streetlight energy consumption by upwards of 60% and expenditure by £54 million in the next 20 years.
• City of Boston saved an estimated US$1 million in energy costs annually through real-time monitoring of energy usage in public buildings.
• Microsoft’s FLEX harvester helped the city of Mol in Belgium maximize renewable heating from sustainable sources.

Social Achievements

• Initiatives such as the “C40 Mayors Agenda for a Green and Just Recovery” focusing on green jobs, resilience, equity and well-being.
• Malala Fund estimates that improving access to education for young women to 70% could reduce disaster-related deaths by 60% by 2050.
• UK government allocated £22.5 million in funding for new circular economy innovation centers.

Governance Achievements

• Development of a digital sustainability framework to assess public sector sustainability and digital capabilities.
• Germany introduced a “Digital Product Passport” to help standardize data on the individual components of specific products to help enable better procurement decisions.
• Singapore launched a US$73 million Virtual Singapore project to strengthen the city-state’s resilience by optimizing energy networks and improving disaster management planning from rising sea levels.

Climate Goals & Targets

Environmental Challenges

• Meeting rising public expectations to tackle climate change.
• Realizing digital aspirations while addressing skills gaps and mistrust.
• Elevating senior leaders as digital and sustainability change agents.
• Increasing the capacity of public sector entities to share environmental data and expertise.
• Matching green and digital ambitions with appropriate investment.

Mitigation Strategies

• Developing a digital sustainability framework.
• Promoting digital partnerships and cross-sector collaboration.
• Linking socioeconomic ambitions with climate-related goals.
• Integrating skills development with digital solutions.
• Aligning recovery spending with initiatives that will have a positive impact on the environment.

Supply Chain Management

Responsible Procurement

• Green public procurement policies

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Droughts
• Water shortages

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Renewable energy
• Circular economy

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water
• Waste
• Ecosystems

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 22.7 percent
• Contracted 1,443,981 metric tons of carbon removal in FY22
• Increased reuse and recycle rates of all cloud hardware to 82 percent
• Reduced single-use plastics across all Microsoft product packaging to 3.3 percent
• Protected 12,270 acres of land in Belize

Social Achievements

• Provided more than 850,000 people with access to clean water and sanitation solutions
• Launched Microsoft Cloud for Sustainability
• Published the Closing the Sustainability Skills Gap report
• Expanded AI for Good Lab into Egypt and Kenya

Governance Achievements

• Redesigned carbon fee, tying it to abatement costs
• Published policy briefs on carbon and electricity policy
• Launched the Carbon Call initiative

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions increased by 0.5 percent despite business growth
• Data quality challenges in supply chain and capital goods
• Geopolitical factors affecting supply chains
• Need for improved Scope 3 measurement methodologies
• Limited availability of low-carbon materials at scale

Mitigation Strategies

• Improved operations, telemetry-based measurement, renewable energy investments, and SAF purchases
• Updated Supplier Code of Conduct with sustainability requirements
• Developing new methodologies for capital goods emissions
• Investing in carbon removal projects
• Partnering with suppliers to reduce emissions
• Investing in and purchasing from nascent technology providers

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct with GHG emission disclosure and reduction plans
• Ecodesign requirements for cloud hardware
• Investments in sustainable materials and manufacturing processes

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth of renewable energy and carbon removal markets

Reporting Standards

Frameworks Used: GHG Protocol, GRI Standards, TCFD

Certifications: LEED Gold, ENERGY STAR, EPEAT Gold, Zero Waste

Third-party Assurance: Deloitte & Touche LLP (limited assurance on Environmental Data Fact Sheet)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 6 (Clean Water and Sanitation)

Initiatives contribute to these goals through renewable energy procurement, carbon reduction and removal, and water access projects.

Sustainable Products & Innovation

• Microsoft Cloud for Sustainability
• Surface Pro 9 and Surface Laptop 5
• Xbox app on Samsung Smart TVs
• All-electric kitchen

Awards & Recognition

• CDP A List for Climate Change (10 consecutive years)

Environmental Metrics

ESG Focus Areas

• Inclusive economic growth
• Protection of fundamental rights
• Sustainable future
• Trust

Environmental Achievements

• Reduced global direct carbon emissions by 27% in 2022.
• Developed PrevisIA platform to predict and prevent Amazon deforestation.
• Launched ClimaAdapt platform to monitor climate vulnerabilities in Brazil.

Social Achievements

• Reached over 7.8 million people and skilled more than 1.9 million through training programs.
• Supported over 2,000 women through entrepreneurship initiatives.
• Implemented various diversity and inclusion programs (WAM, BAM, GLEAM, Accessibility).
• Provided technology access and digital skills training to indigenous communities.

Governance Achievements

• Invested $20 billion in cybersecurity globally until 2025.
• Developed and implemented Responsible AI Standard.
• Established robust cybersecurity processes based on Zero Trust strategies.

Climate Goals & Targets

Environmental Challenges

• Lack of skilled workforce in the IT sector.
• Deforestation in the Amazon.
• Climate change vulnerabilities.
• Cybersecurity threats.
• Gender inequality in technology.

Mitigation Strategies

• Launched Microsoft Conecta+ for free digital skills training.
• Developed PrevisIA platform for deforestation monitoring.
• Created ClimaAdapt platform for climate vulnerability assessment.
• Invested heavily in cybersecurity infrastructure and expertise.
• Implemented various diversity and inclusion programs to promote gender equity.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Mapped companies and NGOs with conscious practices aligned with SDGs.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Not disclosed

Opportunities

• Development of AI-based solutions for climate change mitigation.

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Various initiatives align with UN SDGs.

Sustainable Products & Innovation

• PrevisIA, ClimaAdapt

Awards & Recognition

• ECO 2022 prize from Amcham Brazil