microsoft csr case study

An update on Microsoft’s sustainability commitments: Building a foundation for 2030

Mar 10, 2022 | Brad Smith, President and Vice Chair, and Lucas Joppa, Chief Environmental Officer

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Today Microsoft released its annual sustainability report , offering a comprehensive look at our progress in 2021 to becoming a carbon negative, water positive, zero waste company by 2030.

When we announced our climate commitments in January 2020, we also committed to transparency in sharing our learnings. This year’s report includes several important lessons, and our goals remain consistent: we aspire to build a world better than the one we found, and to help our customers and partners do the same.

Progress is not linear

We made progress on a number of our goals. We saw overall reduction in our Scope 1 and Scope 2 emissions of about 17% year over year, through our purchasing of renewable energy.

At the same time, we saw a rise in our Scope 3 emissions, which increased about 23% year over year. We know that Scope 3 emissions (representing the total emissions across a company’s entire value chain) are the most difficult to control and reduce. Our experience this past year has provided us with critical and additional early learning on our path towards our 2030 carbon negative milestone, and we are applying this learning quickly with additional measures to strengthen efforts to reduce our Scope 3 emissions.

Our emissions outputs took place against a backdrop of significant business growth in 2021. In this time period our business revenue grew by 20%. We significantly expanded our global datacenter footprint to meet the increased demand for Microsoft’s cloud business and we saw a growth in devices sales, especially Xbox and associated usage due in part to the pandemic.

Focus on fundamentals

We know this is a long-term effort, and for us to be successful, we need to be clear about the fundamentals that will allow us to meet our climate goals. In the past year we increased our focus on operational discipline, establishing a solid foundation across the company that will help position us to achieve our 2030 goals.

This foundation starts with data – it is essential that we prioritize more accurate and comprehensive data tracking all emissions, especially Scope 3, to inform our actions.

We have adapted the way we set our carbon targets and increased the frequency and scope of our internal reporting, which will bring greater transparency and ability for informed decision making across the company. This is evident in our updated Supplier Code of Conduct , where we require in-scope suppliers to report their emissions. We now have data from more than 87% of these suppliers with the majority included in our carbon accounting reporting.

Last year, we made the world’s largest purchase of carbon removal at 1.4 million metric tons, and this fiscal year we are on track to exceed that by procuring 1.5 million metric tons. Looking ahead, we will set even bolder carbon removal targets, and we will continue to increase our contracted volume year over year through 2030. This has an added impact of helping drive greater market maturation in carbon removal – an advance sorely needed.

Today we are taking new and stronger steps to help us reduce our Scope 3 emissions even as we continue to grow as a company. First, in addition to the absolute carbon emissions cap we’ve set for Microsoft, we are accelerating work to set business-group specific annual carbon intensity targets based on fundamental business drivers. We will connect our performance against these targets with other business review processes, including with the company’s Senior Leadership Team.

In addition, we are restructuring and increasing our internal carbon fee to help incentivize more aggressive measures to reduce Scope 3 emissions and better match the underlying cost of carbon abatement. For example, the Scope 3 business travel fee will increase to $100 per mtCO 2 e in our next fiscal year to better support the purchase of sustainable aviation fuel. To meet our FY30 goals in an increasingly competitive market, we will continue to increase the annual fee at an accelerated rate, which will also help promote energy efficiency and design changes that utilize low carbon materials.

Finally, we are redoubling our efforts on measurement, to help accelerate the maturation and adoption of industry standards for carbon accounting. We did this when dealing with our own numbers, where specified environmental information has been independently reviewed by Deloitte & Touche LLP. But the need for a more holistic focus on measurement goes beyond Microsoft. It was the impetus for the Carbon Call , a new initiative we announced with ClimateWorks Foundation and 20+ other leading organizations. Together we will focus on solving companies’ carbon emissions and removal accounting challenges for a net zero future.

Collaboration and investment

Looking beyond the Carbon Call, we continued this past year to foster additional partnerships and solutions to galvanize greater action. We are investing to advance important climate initiatives, including:

• We made a $100 million grant to Breakthrough Energy Catalyst to accelerate the development of climate solutions the world needs to reach net zero across four key areas: clean hydrogen, direct air capture, long duration energy storage and sustainable aviation fuel.
• Additionally, we have allocated $471 million to date via our four-year, $1 billion Climate Innovation Fund to accelerate the global development of carbon reduction and removal technologies, as well as related climate solutions to reduce water and waste. Recent investments include LanzaJet , BlocPower and Eversource.

We are also investing in product development to help our customers and our partners better manage their own emissions and begin to identify steps toward meaningful change. Last year, we announced the Microsoft Cloud for Sustainability , currently in public preview, to provide comprehensive, integrated, and automated sustainability management for organizations at any stage of the sustainability journey.

As a leading technology provider of sustainable solutions, Microsoft is supporting our customers and partners as they move toward a net zero, environmentally sustainable future. This includes our work with the energy industry. While we will continue to sell commercially available software technology and cloud services to all customers, inclusive of energy customers, we will partner most closely with those energy industry customers who have a net zero-by-2050 goal, in recognition of the transformational role they will play in delivering on the world’s renewable energy needs. You can read more about our energy industry principles here .

This commitment is a priority across every aspect of our business. The Xbox team today shared how they are doing their part to deliver on our goals. As we look forward, it is imperative we continue to build the foundations needed today and do the work that needs to be done to deliver on our commitments in 2030.

It’s what the world needs us all to do.

Tags: Brad Smith , carbon fee , Microsoft Cloud for Sustainability , net zero , sustainability

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Embracing Environmental Sustainability: The Case of Microsoft Corporation

8 Pages Posted: 3 Aug 2021

Ksheeraja Satish

Stella Maris College

Date Written: April 10, 2021

With the expansion of the scope of business responsibility of corporations to include the concept of ‘Environment, Social and Corporate Governance (ESG)’, there is a need for strong sustainable business strategies that causes minimal environmental damage. Microsoft Corporation having launched its first annual Environmentally Sustainability Report, ‘A Year of Action’, this is a case study of the corporation's business strategies that seek to take the growing environmental concerns into account. Their environmental impact reports covering aspects about sustainable actions and solutions, is a way towards mitigating climate change.

Keywords: Microsoft, Environment, Corporate Governance

JEL Classification: M14, K32, Q01, Q54, Q56

Suggested Citation: Suggested Citation

Ksheeraja Satish (Contact Author)

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Microsoft Stakeholders, ESG & CSR

Microsoft’s strategy and programs for corporate social responsibility (CSR) and environmental, social, and governance (ESG) are founded on stakeholder concerns regarding the information technology, consumer electronics, and online service business. In Archie Carroll’s model for corporate social responsibility, these stakeholders and the technology business affect each other. Microsoft’s programs for sustainability and other stakeholder interests affect multiple facets of society. The IT company’s corporate citizenship goals are for a holistic business impact to society. These CSR and ESG programs enhance brand equity and the other business strengths identified in the SWOT analysis of Microsoft . Thus, CSR and ESG programs are significant to the resilience of the IT business.

Microsoft addresses stakeholders’ interests through appropriate corporate citizenship programs based on international standards and guidelines. These standards and guidelines ensure the suitability of CSR and ESG initiatives in multinational IT business operations. The strategic goals of Microsoft’s mission statement and vision statement determine the design of these CSR and ESG programs for sustainability, green technology, and business ethics.

Microsoft’s CSR & ESG Programs

Microsoft strives to address stakeholder interests spanning various aspects of its business and industry. Through its CSR and ESG programs, the company contributes to better quality of life that affects stakeholders. Microsoft’s CSR and ESG programs are:

• Employee empowerment
• Ecosystem support
• Community initiatives
• Public policy engagement
• Hometown investments

Employee Empowerment. Microsoft promotes employees’ involvement in outreach programs. For corporate citizenship, the company provides donations to organizations and causes that employees are interested in, such as sustainability causes and ecological conservation organizations. Also, Microsoft’s organizational culture (work culture) promotes inclusion and support for career development, which is one of the interests of the stakeholder group of employees. Through this culture, the company’s CSR and ESG program provides a work environment that motivates employees in their careers, and provides support for the information technology, consumer electronics, and online service business. Considering outreach activity, job satisfaction, and employee performance, Microsoft’s ESG and CSR program for employee empowerment addresses the following stakeholder groups:

• Communities
• Investors/shareholders

Ecosystem Support. Microsoft’s primary endeavor in this program is responsible sourcing. By improving the supply chain, this program deals with the ecological aspect of the company’s CSR and ESG goals regarding the environmental impact of the business, particularly its consumer electronics and information technology operations. Maintenance effectiveness, cost-effectiveness, and process efficiency achieved through Microsoft’s operations management contribute to corporate citizenship and business sustainability that aligns with the goals of this program for the company’s ESG and CSR. Considering the natural environment and environmental regulations, the following are Microsoft stakeholders addressed through this CSR and ESG program:

• Governments

Community Initiatives. Microsoft TechSpark is a program for the company’s CSR and ESG goals for communities. This program supports digital skills development in local communities. This stakeholder group also benefits from the program’s support for broadband access, as well as local organizations’ information technology adoption that improves cost-effectiveness and sustainability. The impact on residents and organizations indicates that this program addresses the following Microsoft stakeholders:

• Local communities
• Local businesses and nonprofits
• Local governments

Public Policy Engagement. This program involves activities for multiple stakeholder groups and reflects the aim for holism in Microsoft’s CSR and ESG strategy. The company advocates privacy rights, business sustainability, cybersecurity, Internet accessibility and affordability, and digital skills development. These advocacies represent Microsoft’s corporate citizenship goals for carbon neutrality, customers rights, and workers’ rights. These advocacies relate to industry and market trends, such as the political, social, and ecological factors discussed in the PESTLE/PESTEL analysis of Microsoft . With consideration for these trends, the company makes its CSR and ESG programs relevant to stakeholders. Some of these advocacies are included in marketing communications and public relations implemented through Microsoft’s marketing mix (4Ps) . For example, the company promotes its Surface devices with emphasis on privacy and cybersecurity. Considering these advocacies, Microsoft’s ESG and CSR program for public policy engagement addresses the following stakeholders:

• Business partners

Hometown Investments. Microsoft’s hometown, Washington State, is the focus of this program for CSR and ESG goals. The company allocates funds and other resources for affordable housing and environmental conservation, as well as economic opportunities, especially ones related to the information technology industry. These investments illustrate that Microsoft’s CSR and ESG program for Washington State addresses the following stakeholders:

• Communities in Washington State
• Government of the State of Washington

Do Microsoft’s ESG & CSR programs meet stakeholders’ interests?

Microsoft meets stakeholder interests through multiple programs, activities, and advocacies. For example, the company’s public policy engagement meets the interests of all major stakeholder groups. On the other hand, employee empowerment ensures that Microsoft’s CSR and ESG strategy supports the interests of workers and the business organization. Also, ecological and community-focused programs contribute to community development, community and business sustainability, and regulatory compliance.

This corporate citizenship status improves Microsoft’s position against major competitors, including IT and consumer electronics firms, like Apple , Google (Alphabet) , Amazon , IBM , and Samsung , as well as the video game console business of Sony . Through this comprehensive CSR and ESG strategy involving programs that meet stakeholder interests, brand equity and business efficiency are enhanced, and the degree of competition demonstrated in the Five Forces analysis of Microsoft is addressed, providing support for long-term business competitiveness and success in the global market.

• Handayani, M., & Nurzhavira, G. P. (2024). Corporate social responsibility (CSR) as a catalyst for ESG integration in marketing strategies. International Journal of Economics, Business and Innovation Research, 3 (04), 198-211.
• Homer, S. T., Yee, K. V., & Khor, K. S. (2023). Developing a measurement instrument for perceived corporate citizenship using multi-stakeholder, multi-industry and cross-country validations. Quality & Quantity, 57 (1), 277-300.
• Microsoft Corporation – Employee Giving & Corporate Giving Program .
• Microsoft Corporation – Form 10-K .
• Microsoft Corporation – Investments in Washington State .
• Microsoft Corporation – Our Sustainability Journey .
• Microsoft Corporation – Public Policy Engagement .
• Microsoft Corporation – Supply Chain Integrity .
• Microsoft Corporation – TechSpark .
• U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry .
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Helping Microsoft raise the bar on corporate sustainability

How WE told the story of Microsoft’s carbon reduction moonshot

In January 2020, Microsoft was the first major corporation to set a bold goal to be carbon negative — moving beyond carbon neutral — by 2030, and by 2050 to remove all the carbon it has emitted into the atmosphere since its founding in 1975. Microsoft also created the Climate Innovation Fund, committing $1 billion to fund new innovations and climate solutions, including carbon removal. And, the company committed to a high level of transparency so others could learn from what worked and what didn’t.

This initiative was much more ambitious than similar plans at other companies, but in an environment where companies in many industries are making promises about sustainability, sorting through what’s real and what isn’t can be difficult. As such, we knew convincing media, partners and customers to pay attention and view Microsoft’s plan differently would be a challenge. The campaign’s goals were to:

• Help audiences understand the science, math and meaning behind how companies account for carbon and a common understanding of the terms they use.
• Help Microsoft elevate and shift the global carbon conversation to focus on more rigorous and verifiable approaches to tackling carbon emissions.

Climate change continues to be a charged topic, and we knew Microsoft’s plan would spark interest across multiple audience segments. To reach them, the team engaged with a wide array of media outlets, including consumer, business, finance, science, technology and public policy. We needed to educate and provide context for Microsoft’s carbon accounting and science-based plan without losing sight of the initiative as a whole. Centering the message on Microsoft’s “moonshot” helped drive home the magnitude of the commitment.

Timing was critical. The announcement was scheduled for the week before the World Economic Forum’s annual meeting in Davos, Switzerland, where CEOs, government agencies and politicians gather to discuss global issues, with the environment topping the list of this year’s meeting. With the tragic wildfires in Australia continuing to burn and the rise of climate activist influencers, we had the opportunity to position Microsoft’s sweeping initiative as the gold standard for tech companies stepping up to change the world.

Microsoft’s commitment resonated with governments, industry leaders, media and influencers alike. The level of detail, specificity around its plan to go carbon negative, transparency on the inherent challenges and the magnitude of the company’s investment resulted in:

• Global leaders at the WEF in Davos cited Microsoft as the prime example of a large company committed to sustainability
• 2,110 earned media placements globally, including 465 original articles. Highlights include Bloomberg , the BBC , Wall Street Journal , Fast Company and CNN
• 1,834 broadcast hits, reaching more than 9.3M TV viewers and 43.1M weekly radio listeners. Highlights include NPR’s Morning Tech
• 25,000+ Twitter mentions and 100,000 engagements
• Microsoft’s approach is becoming part of the master narrative media use when covering the commitments and plans of other companies, further entrenching it in the broader conversation about addressing critical climate change challenges

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Microsoft Corporate Social Responsibility (CSR): a brief overview

The technology giant won a number of awards and achievements for its responsible behaviour. These include ranking #1 on Corporate Responsibility Magazine’s 100 Best Corporate Citizens 2018, ranking #1 for both, Environment and Social Score which measures corporate performance using more than 200 factors. Moreover, Microsoft’s behavior as a socially responsible company has earned number 2 spot on JUST Capital’s Top 10 Tech Companies.

Microsoft CSR Programs and Initiatives

Microsoft Supporting Local Communities

• Microsoft employees donated USD158 million to non-profits serving its local communities and the world
• The Lagos Solar project in Nigeria uses batteries that are charged by solar panels, along with intelligent inverters connected to Microsoft Azure Internet of Things technology
• International software provider Temenos relies on Microsoft Cloud services to reach people across Myanmar who lack access to banking, giving them opportunities for more financial stability and access to microcredit and other financial services.
• Microsoft’s 4Afrika Initiative provides a set of programs to empower African youth, entrepreneurs, developers and business and civic leaders
• YouthSpark initiative aims to empower 300 million young people around the world with opportunities for education, employment, and entrepreneurship

Microsoft Educating and Empowering Workers

• Microsoft collects employee feedbacks through multiple channels and acts on them. As part of this initiative nearly 85 percent of our more than 117,000 employees responded employee survey
• 92% of surveyed stated they feel proud to work at Microsoft and 87% of employees would recommend Microsoft as a great place to work
• 90% of Microsoft’s employees are eligible for various bonuses

Labour and Human Rights at Microsoft  

• Since 2016, Microsoft has had a formal commitment to respect human rights as a signatory of the United Nations Global Compact
• The technology company adheres to its Global Human Rights Statement
• Microsoft provides health and wellness programs for families, paid vacation, paid sick leave and paid time off for new parents

Employee Health and Safety at Microsoft

• The Microsoft CARES employee assistance program, offers free access to services including personal and family counselling, stress management, and referrals for child/elder care.
• The Microsoft Ergonomics Program offers the workforce ergonomic assessment and training programs and special furniture, equipment, and software for medical needs.
• The company conducts Voice of the Supplier Surveys in an anonymous manner to monitor the adherence to health and safety and other important CSR-related principles.

Microsoft and Gender Equality and Minorities

• The company is one of the first Fortune 500 companies in the world to offer domestic partner benefits for Microsoft LGBT employees
• Since 2016 the company has nearly doubled the number of women corporate vice presidents – both overall and in technical roles
• African American/Black and Hispanic/Latino representation among the workforce reached increased by 33% in 2017
• Microsoft spent USD3 billion with minority, disabled, veteran, and woman owned businesses in FY18

Energy Consumption by Microsoft

• 44% of the electricity used by Microsoft data centres comes from wind, solar, and hydro power electricity
• Air cooling techniques used at Microsoft data centres result in 20-30 percent lower energy consumption
• Microsoft leveraged its corporate campus to help create an analytical software solution that prioritizes maintenance and repairs our 125 Puget Sound buildings based on energy and cost savings potential
• All new data centres of Microsoft have an average 1.125 Power Usage Effectiveness (PUE), which is one-third less than the industry average data centre PUE of 1.7.

Water Consumption by Microsoft

• Air cooling techniques used at Microsoft data centres result in 90% lower water consumption
• In India, the company captures rainwater for irrigation, and on its Hyderabad campus, it treats sewage for use in landscaping, resulting in zero sewer discharge.
• Paris office also uses captured rainwater for irrigation and flushes fixtures.

Waste Reduction and Recycling by Microsoft

• Microsoft Real Estate and Facilities teams around the world implement waste minimization programs, including office supply reuse, recycling, and in many cases, composting
• Company’s Redmond, Washington dining facilities divert 99 percent of the waste from the landfill by recycling, using compostable tableware, and adapting our menu to minimize food waste.

Carbon Emissions by Microsoft

• Since July 1, 2012, Microsoft’s global operations have been carbon neutral.
• The company has purchased more than 14 million megawatt-hours (MWh) of green power and reduced company-wide emissions by more than 9 million metric tons of carbon dioxide equivalent (mtCO2e).
• Microsoft has supported the lives of more than 7 million people in emerging nations through carbon offset community projects.
• Company’s carbon offset project portfolio represents more than 600,000 metric tons of carbon dioxide (CO2) emissions

Microsoft and Sustainable Sourcing 

• The company evaluates the operations of its suppliers against 23 different ethical, social, and environmental risks
• Microsoft’s Device Supply Chain group (DSC) and indirect purchasing group oversee dedicated programs to ensure that its standards are met and to build partnerships with suppliers that advance social and environmental goals
• Company’s Global Procurement Group created a formal responsible sourcing function in 2013 to consolidate and enhance its responsible sourcing activities with our indirect suppliers
• More than 100,000 device and packaging components provided by suppliers have been evaluated for compliance by Microsoft

Microsoft’s other CSR Initiatives and Charitable Donations

• The International Association of Privacy Professionals (IAPP) has recognized Microsoft for having the ‘second largest number of certified privacy professionals (CIPP) of any company.
• Microsoft employs more than 50 people whose primary role is investigating potential breaches of company policy, and an additional 120 people whose primary role is compliance
• Microsoft has launched Office 365 for Nonprofits in 92 countries around the world, providing USD55 million worth of Office 365 subscriptions to nearly 11,500 nonprofits globally
• Microsoft completed the Global Network Initiative (GNI) Phase III Assessment, conducted by an independent assessor, and the GNI Board determined that Microsoft is compliant with the GNI Principles on Freedom of Expression and Privacy
• The company began the audit of its non-hardware suppliers against 23 different ethical, social, and environmental risks by country and by commodity category

Microsoft Corporation Report contains a full analysis of Microsoft corporate social responsibility including Microsoft CSR issues. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Microsoft. Moreover, the report contains analyses of Microsoft leadership, business strategy, organizational structure and organizational culture. The report also comprises discussions of Microsoft marketing strategy and its ecosystem.

• DOI: 10.32535/APJME.V3I1.744
• Corpus ID: 216516585

Corporate Social Responsibility: A Case Study of Microsoft Corporation

• Gaurav Sehgal , D. Kee , +4 authors Farah Almutairi
• Published 21 March 2020

7 Citations

Creating a better competitive edge through environmental sustainability: a case study of panasonic, a corpus-based approach to corporate communication research, key determinants of international retail success: a case of ikea retail, community empowerment in the economic field of fish farmers in the corporate social responsibility program, contributing factors to customers loyalty in gadgets a study on apple brand, sustainability in the food and beverage industry: a comparative study of malaysia, india, and indonesia, the future of biotechnology crime: a parallel delphi study with non-traditional experts, 9 references, corporate social responsibility, beyond the business case for corporate sustainability, lean and green: the move to environmentally conscious manufacturing.

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Reporting governance and approach

Our policies and practices, working together with stakeholders, identifying material issues.

Our reporting describes those topics which we consider to be the most important to stakeholders when evaluating environmental, social, and governance (ESG) issues at Microsoft. Therefore, ESG materiality in our reporting does not directly correspond to the concept of materiality used in securities law.

A listing of what we currently identify and categorize as our top ESG issues can be found below. Microsoft conducted a materiality assessment focused on environmental sustainability, which can be accessed in the  2020 Environmental Sustainability Report .

Climate and Energy

Ethics and Integrity (including governance, responsible competition, responsible AI, responsible policy engagement)

Human Capital (including culture and development, diversity and inclusion, engagement, and well-being)

Human Rights

Natural Resources (water, waste, and ecosystems)

Privacy and Data Security/Cybersecurity

Inclusive Economic Growth (including accessibility, skilling, racial equity)

Responsible Sourcing (including product lifecycle management)

We see the big picture

Ceo and senior leadership, environmental, social, and public policy committee, corporate governance, compliance and ethics.

Reporting our progress

Aligning our values, global standards, principles of united nations global compact (ungc), united nations guiding principles, sustainable development goals.

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