Man with protective headphones working on a tablet

This is how we do business

From compliance and ethics to human rights and safety, learn how we hold ourselves to the highest standards.

Our approach to resourcing

Microsoft’s daily interactions with thousands of suppliers around the globe are matters of both great responsibility and opportunity. These partnerships help establish environmental policies and make our supply chain more sustainable. Our Supplier Code of Conduct establishes the fundamental principles of ethical and sustainable business we expect from every supplier with whom we work. We’re also committed to addressing the complex social and environmental issues involved in the production and sourcing of raw materials. We demand high ethical standards in our own operations and take continuous action to reduce the risk of materials from conflict areas from entering our process.

Since 2005, Microsoft has operated an industry-leading Social and Environmental Accountability (SEA) program:

Surface Book 2 on a table

Ensures our hardware and packaging suppliers conform to our Supplier Code of Conduct.

Warehouse employees working in a clean room

Ensures they conform to device-related requirements for living conditions, safe working practices, and environmental, health, and safety protection.

Aerial view of Microsoft Redmond campus.

Microsoft also operates an Environmental Management System (EMS), which applies to all aspects of Microsoft’s hardware and packaging supply chain, management, and operations.

Details about specific substances, materials, and compliance

We phase out substances of concern from our products when technically and environmentally preferable alternative materials are available. We also work with the supply chain and other key stakeholders to ensure best practices are adopted and promoted.

Ozone-depleting substances

The Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol) restricts the use of ozone-depleting substances (ODS) in manufacturing, and Sections 4681 and 4682 of the U.S. Internal Revenue Code (IRC) impose an excise tax on the sale or use of ODS by the ODS manufacturer, producer, or importer and the sale or use in the U.S. by the importer of any “imported taxable products.”

To fulfill these legal requirements, Microsoft has established a strong company policy on prohibiting the use of ODS through its restricted substance specification that all suppliers must meet, an annual supplier disclosure, and supplier audits that validate ODS claims.

The Microsoft Environmental Management System (EMS) — the way we set and communicate our principles and standards — is certified by independent third parties to meet the ISO 14001 standard, which is an internationally recognized framework that establishes a process for entities to manage and continuously improve their environmental performance. All Microsoft-owned manufacturing sites and significant operating locations are ISO 14001 certified. Microsoft also requires its contract manufacturers and suppliers of critical components to have a certified EMS in place.

The Microsoft Environmental Management System provides the framework to:

  • Understand the external and internal issues affecting our purposes
  • Identify the needs and expectations of relevant parties
  • Address risk and opportunities
  • Identify environmental aspects and evaluate their significance
  • Establish objectives and programs for achieving environmental targets
  • Maintain compliance with regulatory and other legal requirements
  • Drive audits, management reviews, and continuous improvement
  • Analyze data and processes for management of energy and water consumption, and waste

The goal is to reduce our most significant environmental impacts by taking into account risks and opportunities. Currently, our most significant impacts for the packaging and devices supply chain are:

  • Product packaging design and disposal
  • Responsible sourcing of raw materials for manufacturing
  • Energy use at office buildings and factories
  • Carbon emissions related to both distribution of goods to market as well as employee travel and commuting
  • Device disposal at end of useful life
  • Generation of nonhazardous waste (paper, recyclables, compostable)

We work to improve the energy-saving features throughout our product portfolio, including energy-efficient chargers, to help our customers save energy.

Electronic devices inevitably require the consumption of energy. Microsoft is committed to reducing the direct effects caused by the energy consumption of our products.

At Microsoft, we also believe technology has tremendous potential to address environmental challenges. In FY15, SCS sponsored a report, the SMARTer 2030 Report, in partnership with the Corporate, External, and Legal Affairs (CELA) group. The report was released at the Bonn Climate Change Conference by the Global e-Sustainability Initiative (GeSI). Endorsed by the European Union Commission and the United Nations, the report emphatically affirms the positive role that information and communications technology (ICT) can play in achieving a more sustainable world.

While historically economic growth has been accompanied by increased carbon emissions, the report identifies ICT as a way to grow sustainably. ICT can enable a 20 percent reduction of global CO₂ emissions by 2030, effectively holding global emissions at current levels and potentially decoupling growth from climate impact. At the same time, ICT could generate more than $11 trillion in sustainable benefits.

To enhance the positive role that ICT can play, Devices Supply Chain has partnered with hardware product development to lessen our products’ energy consumption during their use. Microsoft Surface Pro 4, ENERGY STAR–certified and registered with EPEAT, demonstrates that a powerful fully functional computer can operate using no more energy than less functional tablets on the market.

All energy associated with your device, from its manufacture through your use and recycling of it, are considered in our life cycle assessment.

We work to improve energy-saving features throughout our product portfolio, including the use of energy-efficient chargers, to help our customers save energy. Small steps make a big difference. All our devices come with power-saving standby settings. We have also introduced applications, features, and technologies (such as ambient light sensors, efficient Snapdragon™ processors, and OLED or AMOLED displays) to save energy.

Energy consumed by consoles

An important part of our business strategy includes reducing the energy consumed by consoles within a generation while maintaining the same level of gaming power. For example, since the launch of Xbox 360 in 2005, our engineering teams have successfully reduced standby power by a factor of 10 to less than three-tenths of a watt, resulting in a 60 percent reduction in energy use. Our development and compliance engineers ensure all our products meet regulatory requirements such as the EU’s energy-related product directive.

Carrying lessons learned from Xbox 360 forward, we continued our commitment to reduce energy usage through the design of Xbox One, launched in 2013. Xbox One provides eight to 10 times the processing power of Xbox 360. Despite this significant increase, the electrical power required for gaming is 30 percent less than that of its predecessor when it launched in 2005. Power needed for media play and dashboard is half that of the Xbox 360 at launch. The increase in efficiency results from scalable processor architecture that wasn’t available for the Xbox 360. Other efficiencies are gained by providing the user with choices about console functionality while in standby mode.

In 2009, game consoles were identified by the European Commission as a “priority product group” to be covered either by regulation or a self-regulatory initiative to reducing greenhouse gas emissions. We have been working with other console manufacturers to develop responsible requirements to achieve that goal. The resulting initiative is in the form of a design specification for Xbox 360 and Xbox One. In other words, our current products comply fully with the requirements in the initiative. This voluntary agreement is a joint commitment by the manufacturers, which is estimated to deliver collective energy savings in the EU of 1 TWh per year by 2020. This corresponds to the annual electricity consumption for more than 250,000 households. On April 22, 2015, the European Commission confirmed the voluntary agreement would achieve the policy objectives set out by the EU's Ecodesign Directive for Energy-related Products more quickly and cost-effectively than mandatory requirements.

Distribution

Our strategy to contain our carbon footprint and improve environmental sustainability extends to the distribution of our products where we prioritize moving away from air transportation toward more carbon-efficient ocean and rail transportation when possible. In 2014, Device Supply Chain became a certified SmartWay® Transport Partner with the U.S. Environmental Protection Agency (EPA). SmartWay® is a public-private initiative involving the EPA, carriers, logistics companies, and manufacturers. The purpose is improving fuel efficiency and environmental performance of supply chains, and accelerating availability and adoption of advanced fuel-efficient technologies and operational practices. This certification will allow us to continue improving the energy and environmental efficiency of freight operations. In addition, the work we do to lessen the size and weight of our products and increase the efficiency of our packaging enables us to both ship more efficiently and improve the sustainability of our products.

Energy efficiency

Microsoft devices comply with the EU Ecodesign Directive for Energy-related Products and its implementing regulations when applicable. Our devices also comply with European Commission Regulation for Standby and Off Mode Power Consumption for Electronic Household and Office Equipment, U.S. Department of Energy (DOE), and U.S. state energy conservation standards when applicable. Products equipped with external power supplies meet U.S. DOE, U.S. California, and other country-specific efficiency requirements.

We are proud of our commitment to sustainability

Compressed material, ready for recycling

Full disclosure

We collect full material disclosures for the components in our products. This helps us verify conformance to our requirements and to gives us greater ability to assess the environmental impact of our products.

Various recyclables being sorted

Knowing the risks

Microsoft screens our non-hardware suppliers against 23 different ethical, social, and environmental risks by country and commodity category.

A young woman works on a laptop

Much-needed time off

In FY16 we began integrating our new procurement standards into the contract renewal process to ensure our suppliers in the U.S. provide their employees who handle our work with at least 15 days of paid leave each year.

View of colorful shipping containers stacked

Where did it come from?

Microsoft works actively with suppliers, industry peers, and other stakeholders to improve traceability.