Leadership in Sustainable Business Practices

Sustainable business practices are not negotiable at Microsoft – they help define who we are – and are important to our shareholders, employees, customers, and partners.

Our Products and Technology

Energy efficiency is a design principle of Microsoft products and we are working to maximize the role of technology in the transition to a more energy-efficient economy.

  • Windows 7 has been designed to use less energy when in idle and active state, and includes tools to identify applications that are unnecessarily using energy.
  • Microsoft Windows Server 2008 achieves power savings of up to 10% over Windows Server 2003 at comparable levels of throughput.
  • Microsoft Unified Communications (UC) reduces the need for business travel and commuting. Forrester Research found wide deployment of UC can yield as much as 30% in travel reductions
  • Microsoft Dynamics AX and its integrated Environmental Sustainability Dashboard let small and medium-sized businesses measure and manage their carbon footprint.
  • Microsoft Hohm—a free online application currently available in the U.S.—lets people better understand their home energy usage, get recommendations to conserve energy and save money.
Products and Technology for Environmental Sustainability

Our Environmental Impact

We’re constantly searching for opportunities to minimize our environmental impact, reduce waste, and conserve water and other raw materials.

  • Microsoft recycles an average of 208.78 tons of material each month, including glass, plastic, aluminum, electronics, cardboard, paper, and organic waste.
  • We've become the first U.S. corporate campus to achieve Certified Green Restaurant™ status. Our move to compostables at our Redmond, WA headquarters has reduced cafeteria waste by 50% since July 2008. We also ship roughly 10,000 gallons of used kitchen oil to biodiesel refineries to be converted to biodiesel fuel.
  • We provide commuting arrangements for employees, including the Microsoft Connector Service—a series of commuter buses which eliminate approximately 32,200 miles of travel every day. Our employees are also given free public transportation passes to commute to our Redmond, WA campus, as well as other assistance with carpooling and bicycling.
Microsoft’s Environment-related Business Practices

Our Carbon Footprint

We adopted a comprehensive environmental policy in 2006 and have made good progress in monitoring and reducing our environmental footprint.

  • Newer Microsoft-owned buildings are designed to Leadership in Energy and Environmental Design (LEED) standards and consume over 20 percent less energy than traditional buildings.
  • We’re reducing our travel. By using Microsoft’s own technology, including instant messaging, video conferencing, and unified messaging, we’ve reduced our annual carbon dioxide emissions by 17,000 metric tons or the equivalent of 100,000,000 miles of airplane travel.
  • We’re increasing our renewable energy usage, for example:
    • Currently 25% of Microsoft’s total energy purchases come from renewable sources including water, solar and wind.
    • Over half of Microsoft’s Redmond, WA campus energy comes from hydroelectricity and our data center facility in Quincy, WA uses 100% hydropower.
  • Our newly opened Dublin and Chicago datacenters use innovative technology and design so they are 50% more efficient than traditional data centers built 5 years ago.
  • We voluntarily measure and publicly report our total carbon footprint annually through the Carbon Disclosure Project. In 2008 our total carbon footprint was 1.13 million tons of CO2.
Carbon Disclosure Project

Supply Chain Management

We view our supply chain—which includes around 35,000 contractors, suppliers and vendors—as an extension of the Microsoft business, so their conduct, conditions, and welfare are important to the sustainability of our business.

  • We require our suppliers to sign and adhere to our Vendor Code of Conduct and have established policies for selection and retention of suppliers based on social and environmental performance metrics.
  • We audited 84 factories and related facilities of our contracted manufacturing suppliers, and performed 113 follow-up site audits in 2008, in accordance with the Electronics Industry Citizenship Coalition (EICC) guidelines.
  • We are monitoring the sub-tier suppliers of our contract manufacturing suppliers, completing 62 initial site evaluations in 2008. This is part of our effort to delve deeper into our supply chain.
  • We perform a greenhouse gas emissions assessment of hardware suppliers, which represents over 90 percent of our direct spending on materials from contract manufacturers.
  • We conduct a Supplier Satisfaction Survey with 2,300 vendors, representing 75 percent of our total supply chain spending.
  • We help extend the life of over 500,000 PCs each year through our Digital Pipeline and Microsoft Authorized Refurbisher program.

Corporate Governance

Ultimately we are a publically held enterprise and so good corporate governance is a responsibility to our investors and critical to the long-term viability of our company. We comply or exceed governance codes used in the United States. We use a one-tier management system, with ten people on our board of directors, eight of whom are independent. Our board committees include: Audit; Compensation; Governance and Nominating; Finance; and Anti-Trust Compliance.

  • Microsoft outperforms 98.2% of the companies in the S&P 500, and every company in the Software and Service grouping, according to RiskMetrics Group/Institutional Shareholder Services.
  • We scored 8.5 out of 10 when Governance Metrics rated our corporate governance standards for: Board Accountability, Financial Disclosure and Internal Controls, Shareholder Rights, Remuneration, Market for Control, and Corporate Behavior.

Employees

Our 93,000 employees drive our business, and we have a responsibility to create a respectful and rewarding work environment for them. In addition to typical employee benefits:

  • Written policies cover equal opportunities and anti-discrimination for all employees globally. We are a recognized leader in creating a diverse workplace.
  • Ninety percent of employees participate in Microsoft stock programs.
  • Well-developed contingency plans in the event of a pandemic are in place to protect our employee base.

Employees have a responsibility to act ethically in their work. We do not tolerate bribery or corruption. Every employee signs our Standards of Business Conduct, and receives training on ethical conduct and environmental practices as part of their new employee orientation.

Political Engagement

Microsoft has a set of principles governing corporate political spending, transparency, and reporting. In the United States we run the Microsoft Political Action Committee, which informs its members about decisions made by government officials that affect our business, and enables Microsoft employees and shareholders to jointly support candidates for public office.

Political Donations

The Microsoft Political Action Committee (MSPAC) was created in 1988 to enable Microsoft employees and shareholders to participate more effectively in the political process in the United States. MSPAC informs its members about important issues and decisions made by government officials that can affect Microsoft business. The committee also provides an opportunity for members to jointly support public policy positions that are important to Microsoft and the software industry.

MSPAC is a bipartisan organization that contributes to the campaigns of federal, state, and local candidates. MSPAC typically supports candidates who share Microsoft views on public policy, serve as congressional or legislative leaders, represent districts or states where Microsoft has a major business presence, or serve on committees that have jurisdiction over legislation that is important to the company.

MSPAC Process

A committee of Microsoft employees meets regularly to evaluate candidates' public policy positions on issues that are relevant to Microsoft business or of particular interest to the computer software industry. The MSPAC Steering Committee, composed of senior managers in Legal and Corporate Affairs at Microsoft, then decides which candidates and campaigns MSPAC will support. In 2008, MSPAC made political contributions totaling US$724,700.

MSPAC Participants

All Microsoft employees and shareholders who are U.S. citizens or hold a permanent residence visa (green card) are eligible to participate in MSPAC. They and their spouses can make individual contributions to MSPAC of up to US$5,000 annually. The minimum annual contribution for MSPAC members is US$50. Joining MSPAC is voluntary, and decisions about membership do not affect an employee's career at Microsoft.

Microsoft encourages its employees to participate in the political process and provides opportunities for them to learn about important issues. As part of that effort, MSPAC conducts voter registration drives at larger Microsoft facilities in the United States. It also sponsors a monthly Speaker's Series on Microsoft campuses to encourage discussion among MSPAC members and political leaders—state, federal, and international—on a range of public policy issues.

Corporate Contributions

Under U.S. law, corporations cannot support candidates for federal office. Many states allow corporate donations to state and local candidates or to ballot issue campaigns. As a corporation, Microsoft makes political contributions to support candidates and ballot measures that are consistent with the company's public policy agenda and business interests. In 2008, Microsoft corporate contributions to state and local political campaigns totaled US$371,200.

As of July 2005, Microsoft has made no corporate contributions to any noncandidate or nonparty political committee organized under section 527 of the Internal Revenue Code.

Stakeholder Engagement

We endorse several multi-stakeholder sets of principles and initiatives, including the:

We engage with a wide range of stakeholders across all parts of our business operations. We also participate in several stakeholder groups and dialogues including Business for Social Responsibility (BSR), Boston College Center for Corporate Citizenship, the World Economic Forum Global Citizenship Initiative and Net Impact.

Our Forward-Looking Goals

  • Reduce carbon emissions per unit of revenue by 30% by 2012 compared with 2007.
  • Phase-out entirely the use of phthalate plasticizers and BFR from all our hardware products by the end of 2010.
  • Improve the energy efficiency of new data centers, so that new data centers we build in 2012 will average 1.125 in Power Use Effectiveness (PUE), an industry metric of data center energy efficiency where 1 represents optimal energy use. The datacenter industry average for PUE is currently 2.
  • Contribute to reducing the IT industry’s carbon footprint by over 50 million tons a year by 2010 as part of our membership of the Climate Savers Computing Initiative.
  • Continue transitioning to the electronics industry auditing and development solutions, maintaining coverage of new and existing hardware supplier facilities through risk based auditing of 80 to 100 facilities annually.
  • Increase the coverage of our monitoring of Vendor Code of Conduct conformance by sub-tier hardware suppliers.
  • Expand greenhouse gas reporting for our direct material supply chain and establish improvement targets.
  • Begin assessment of water consumption and waste generation in the direct material hardware supply chain.
 
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