Our approach

Responsible Sourcing’s goals reflect Microsoft’s mission to “empower every person and organization on the planet to achieve more.” We implement initiatives that simultaneously span a broad range of work to advance sustainability in our procurement processes and ensure compliance with corporate, state, and federal requirements.

Learn more about our approach

Supplier corporate social responsibility performance

Our customers and investors increasingly request information about our corporate social responsibility (CSR) engagement with suppliers. Understanding our suppliers’ capacity to manage CSR issues and working with suppliers with strong sustainability performance enables us to respond to these requests, increase the resiliency of our operations, and enhance our business performance. This year, we established indirect supplier requirements that leverage existing reports, frameworks, disclosure tools, and assessments. Our approach is efficient and promotes convergence towards best-in-class sustainability performance.

Recognizing that a large proportion of a company’s impacts are embedded in the supply chain, many organizations strive to source more sustainable products and services and prioritize suppliers that demonstrate enterprise-wide environmental, social, and governance (ESG) practices. Organizations managing indirect supply chain impacts often develop customized sustainability engagements, scorecards, surveys, and audits. This results in processes that may be duplicative and are also both time and resource-intensive.

To avoid producing yet another ESG survey for our indirect supply chain, we developed our program to leverage the investor-driven tools designed by ESG research firms to assess hundreds of ESG topics on behalf of investors. We ask our suppliers to provide us with information from ESG frameworks and surveys that already exist instead of creating our own. Through this approach, we aim to improve ESG performance by reducing risk, supplier survey fatigue, and burdens on procurement teams while also facilitating participation.

We sponsored the Committee on Supplier Ratings (COSR) to convene a multi-stakeholder group focused on strategic sustainable procurement. The committee screened ESG research providers and methodologies to determine which assessments would be most appropriate for use in evaluating supply chains. The COSR initiative was formalized and adopted by the NGO Sustainable Purchasing Leadership Council. They used the research to publish a research and qualification tool, a free public resource for use by procurement professionals.

In FY19, we required its top suppliers to provide at least one of the preferred third-party ESG ratings identified by the SPLC. If the supplier is unable to meet the requirement, we request information about priority improvement areas, corrective actions, and a timeline for compliance. More than 100 of our largest suppliers either shared their ESG performance or a corrective action plan. Of the suppliers who shared their assessment, we determined that approximately 80 percent of our spending with these companies is ranked in the top 1/3 of their industry for ESG performance. For FY20, we plan to continue to capture suppliers’ ESG performance and corrective action plans.

In addition to a third-party ESG rating, we required our top suppliers to be rated by the COSR-vetted CDP supply chain program. The CDP supply chain program gathers information from companies regarding emissions, climate-related risks and opportunities, as well as mitigation with customers, suppliers, and other partners. This year, 100 of our top suppliers reported an average of $530 thousand invested in emissions reduction activities, reducing their collective footprint by 5.6 million metric tons of carbon dioxide equivalents (CO2e), and saving a total of $589.5 million. We also engage our suppliers on their water performance and have received a 61 percent response rate. In FY20, we will expand the number of suppliers in the program and deepen our engagement level to ensure that our emissions reductions and water targets are achieved.

We also require qualifying suppliers to provide a link to their sustainability or corporate responsibility report with at least one relevant Global Reporting Initiative (GRI) metric. More than 100 suppliers shared their performance on meeting this requirement.

In addition to requiring information on transparency, climate impact, and sustainability performance, we also have dedicated supplier training and assurance programs related to anti-corruption, privacy, and security. Microsoft is committed to promoting a positive work environment. Accordingly, we expect our suppliers and their employees, agents, and subcontractors to adhere to the same standards of conduct and behavior. Microsoft requires all Suppliers to demonstrate this commitment by complying with our Supplier Code of Conduct (SCoC) and conducting annual employee training on our SCoC. In addition, Microsoft requires all external staff to complete the SCoC training prior to beginning work that requires access credentials.


Procurement category highlights

At Microsoft, we are committed to run our supply chain responsibly. We believe in continuous improvement and we set high standards for responsible business practices across our business. We expect our suppliers to share this commitment and we work hard to help them build a sustainable culture.

Reducing emissions with company cars

Part of the MS Procurement Fleet Team mission is to reduce the emissions associated with company cars. The team started by implementing upper limits on carbon dioxide (CO2) emissions into local car policies. It works with car manufacturers, dealerships, and leasing companies to secure the highest possible discounts on their lowest emission engines by model range.

Business air travel

We are empowering a modern, sustainable workplace with widespread adoption of teams that enables employees to effectively meet with suppliers, customers, and other employees. Our people are increasingly choosing to use technology instead of travel to get their work done, a trend we expect to continue in the years ahead.

Responsible recycle – reducing hazardous waste in landfills

Microsoft extends the life of used electronic equipment by partnering with Microsoft Authorized Refurbishers to rebuild and reuse devices to help people, businesses, and communities around the world embrace sustainable technology. The Responsible Recycle Program manages global removal, reuse, and disposition of Microsoft owned electronic equipment.

Supplier diversity

Microsoft has a strong and long-standing commitment to source from historically disadvantaged groups. Our procurement team is committed to increasing our spending with diverse suppliers as a part of our Supplier Diversity program. In the United States in FY19, Microsoft spent nearly $3 billion with diverse-owned businesses, continuing to place Microsoft in the top 20 companies for diversity spending globally.

Collaboration

We rely on stakeholders to shape our supplier Corporate Social Responsibility programs and extend our overall impact. Through collaboration, we ensure global, scalable, and efficient responsible sourcing practices. In addition, our stakeholders offer us diverse points of view that challenges us to continuously improve.

Following are some of the stakeholders that shape our Responsible Sourcing program:

Our suppliers

Our suppliers are key stakeholders of our programs. We rely on them to execute on our programs and to ensure we have the most positive impact possible.


Sharing best practices

Empowering workers in our supply chain

Microsoft sponsored Reducing Poverty through Employment Toolkit to build on last year’s Impact Sourcing Autism Empowerment Kit. These resources help others understand and engage on opportunities with Impact Workers. We sponsored this in collaboration with the Business for Social Responsibilities.

Learn more about the toolkit

Supporting Seattle Special Olympics USA Games

We teamed up with the 2018 Special Olympics USA Games to help achieve a sustainable and inclusive event. We aspired to create an open-source kit with a legacy to live beyond the Seattle games. As part of this work we published the Sustainability Impact Report and the Sustainability Playbook & Toolkit.

Read the reports


Recognizing suppliers with CSR awards

Microsoft advances sustainable projects with our suppliers that create shared value. We encourage and recognize suppliers who make exceptional impact in social and environmental areas.

Learn about the Supplier Excellence Awards

Industry recognition

We are honored to be recognized for the work we have completed. Following are some of the awards and recognition we have received:

 

  • Awarded the National Corporation of the Year Award by the Northwest Mountain Minority Supplier Development Council for our efforts in support diverse owned businesses (NMSDC).
  • Honored for our consistent partnership with women-owned businesses as one of America’s Top Corporations for Women’s Business Enterprises by the Women’s Business Enterprise National Council (WBENC).
  • Recognized by the Carbon Disclosure Project (CDP) as being in the Top 2 percent of over 3,300 Procurement organizations who are addressing climate change with our suppliers.
  • Awarded the Unsung Contributor Award by Technology Industry Group (TIG).
  • Awarded the 2018 Business Equality Excellence by the Business Equality Network for our commitment to the development and success of lesbian, gay, bisexual, transgender, and queer business community.
  • Awarded the Global Impact Sourcing (GIS) Award by International Association of Outsource Professionals (IAOP) in partnership with the Rockefeller Foundation for our leadership in impact sourcing.
  • Awarded Outstanding Case Study by the Sustainable Purchasing Leadership Council.
  • Awarded the Sustainability award from the Sourcing Industry Group for our leadership on Impact Sourcing.
  • Responsible Business Alliance Implementation award for our Climate Change Leadership Through Collaboration and Capacity Building submission.