Microsoft CSR Report Analysis

Introduction
Microsoft Corporation is an American multinational technology
company that develops, licenses, and sells computer software,
consumer electronics, personal computers, and related services. Its
best-known software products are the Microsoft Windows line of
operating systems, the Microsoft Office suite, and the Internet
Explorer and Edge Web browsers. Most-known hardware products
are Xbox video game consoles and the Microsoft Surface lineup.
(Microsoft 2022)
Microsoft ranked No.14 in the 2022 Fortune 500 rankings of the
largest US corporations by total revenue; it is the world's largest
software maker by revenue as of 2016. (Fortune 2022) It’s one of the
Big Five American information technology companies.
This report analysis will give an overview of the company’s
sustainable/CSR strategy and its efforts toward the SDGs, by
analyzing Microsoft 2021 Environmental Sustainability Report and
Microsoft Annual Report 2021.
Microsoft is well-known for its excellent CSR programs. In both 2016
and 2017, Reputation Institute placed Microsoft 2nd on the top 100
companies with the best CSR. In 2019, it was rated the most
environmentally friendly company by Just Capital. In 2021 Microsoft
was recognized as a top ESG performer by Sustainalytics. (Microsoft,
n.d, Recognition)

Controversies
Like any other big tech company, Microsoft has been caught in some
criticism in the past. The company has been the subject of numerous
lawsuits by several governments and companies for unlawful
monopolistic practice. Problems with ease of use and security of the
company's software are typical targets for critics. They've also been
criticized for the use of permatemp employees, the use of forced
retention tactics, and for overworking their employees.
The most recent scandal involving Microsoft was in 2020, for
practicing tax evasion by being a tax resident in Bermuda.
Externalities.
We can identify some positive externalities of the company: better
education, information, contribution to the global economic network,
R&D, innovation etc.
And some negative externalities: pollution, power consumption,
overuse of the resources like oil and minerals, job export, health
effects on people, can serve as a source of misleading information,
holds monopoly power, privacy issues. (Mikocki, L. 2022)
CSR Strategy
Microsoft is actively combating its externalities by focusing on the
flowing CSR factors:
1. Support inclusive economic opportunity
2. Protect fundamental rights
3. Create a sustainable future
4. Earn trust
( Microsoft 2021 Annual Report)
To fulfill these goals, they have formulated the TCR team. They are
also active through the Bill and Melinda Gates Foundation.
(Microsoft, 2022, Microsoft Impact Summary)

Support inclusive economic opportunity

Since 2017, Microsoft has helped more than 33 million people in
underserved communities globally gain access to affordable
broadband coverage, and they launched pilots in 8 US cities last year
to increase digital equity. (Microsoft 2021 Annual Report)
In the 2021 Annual Report, Microsoft Corp. announced it has helped
over 30 million people in 249 countries and territories gain access to
digital skills and helped 250,000 companies make a skills-based hire.
(Microsoft 2021 Annual Report)
This year, they provided $2.5 billion in donated and discounted
products and services to help 295,000 nonprofits better serve their
communities. Its employees donated an additional $214 million to the
organizations and causes they care about.( Microsoft 2021 Annual
Report)

Protect fundamental rights

Microsoft Corp. continue to stand up for human rights, which
includes taking action to prevent modern slavery and human
trafficking in their business and supply chain and supporting
humanitarian action and emergency response. Since 2016, Microsoft
has had a formal commitment to respect human rights as a signatory
of the UN Global Compact. (Microsoft, 2022, Impact Summary)
Last year, they mobilized resources to respond to the Beirut
explosion, hurricanes in Central America, wildfires in the United
States, and more. To date, they committed cash, technology, and other
resources with a value of more than $410 million to support ongoing
COVID-19 response efforts.( Microsoft 2021 Annual Report)
Microsoft is taking action towards their goal to double the number of
Black and African American and Hispanic and Latinx people
managers, senior individual contributors and senior leaders in the U.S.
by 2025.( Microsoft 2021 Annual Report)
In the employee survey, 92% o stated they feel proud to work at
Microsoft.

Create a sustainable future

There are four areas on which Microsoft Corp. focuses to minimize
the environmental impacts of their operations and maximize the
positive impacts of the technology: carbon, water, waste, and
ecosystems.
Their listed commitments for 2020-2050 are :
2025-Operate with 100% renewable energy. Protect more land than
they use.
2030-Become carbon negative, zero waste, and water positive.
2050-Remove all historical emissions.
(Figure 2) ,(Microsoft, 2022, 2021 Environmental Sustainability
Report.)
Some of this will happen through the completion of specific goals
such as their shift to a 100% electric campus vehicle fleet, their move
away from diesel fuel as a backup energy source, and their waste
reduction improvements due to Circular Centers. Other progress will
happen through the expansion of their renewable energy purchasing
program to cover the energy consumption of their consumer devices,
through advances by their suppliers in reducing their own emissions,
through increased purchasing of new materials, including green steel,
low carbon concrete, and other infrastructure components of a future
net-zero carbon economy. (Microsoft, 2022, 2021 Environmental
Sustainability Report.)
During FY2021, they grew business revenue by 20% while
continuing to reduce their operational emissions, as represented by
Scope 1(Direct emissions created by their activities) and 2(Indirect
emissions from the consumption of the electricity or heat) combined,
with a decrease of approximately 17% through purchasing of
renewable energy. (Microsoft, 2022, 2021 Environmental
Sustainability Report.)
However, as the business has grown and we’ve seen increased use of
devices and cloud services, the total Scope 3 emissions have increased
by about 23% year-over-year. Scope 3 (Indirect emissions from all
other activities in which you ́re engaged) is by far the largest category
of emissions. Upstream examples include supply chain, materials in
buildings, business travel, and manufacturing. Downstream examples
include the electricity customers consume using your products.
(Microsoft, 2022, 2021 Environmental Sustainability Report.)
Despite these Scope 3 increases, Microsoft makes visible progress
towards a more sustainable future:
-Microsoft was one of the first companies to achieve 100% carbon
neutrality in 2012 and commits to being carbon negative by 2030.
-Microsoft claims it’s working to limit indirect emissions during the
design and manufacturing process and by collaborating with suppliers
to encourage them to lower emissions.
-In FY21 and FY22, Microsoft successfully contracted to remove 2.5
million metric tons of carbon, meeting their cumulative two-year goal,
and planning to meet their goal of 1.5 million metric tons of carbon in
2022.
-Air cooling techniques used at Microsoft datacentres result in 90%
lower water consumption.
-Four datacenters are Zero Waste certified.
-They launched the Microsoft Cloud for Sustainability to help
organizations record and reduce their impact.
-3 Circular Centers, and 2 more to be added in 2022.
-They hold their business groups accountable for their carbon
emissions via an internal carbon fee of $15 per metric ton, and the
money collected funds sustainability initiatives like the Circular
Center program.
-Reduced single-use plastics in our product packaging by 18%.
-Allocated $471 million via Climate Innovation Fund to accelerate
their carbon goals, as well as water and waste. They also donated
$100 million to Breakthrough Energy’s Catalyst initiative.
-Through a partnership with Water.org, they provided more than
95,000 people with access to safe water.
-In 2021, Microsoft was awarded the U.S. Water Prize for
Outstanding Private Sector Organization for adopting a water positive
program and committing to being water positive by 2030.
-In FY21, they contracted to protect more than 17,000 acres of land.

Earn trust
For Microsoft, trust is built on privacy, security, digital safety, the
responsible use of AI, and transparency. They plan to invest $20
billion over five years, starting in 2021, to advance security solutions,
including $150 million to help US government agencies upgrade
protection. (Microsoft, 2022, Microsoft Impact Summary)
Last year, Microsoft Security blocked 9 billion threats to devices, 31
billion identity threats, and 32 billion email threats, and used the
insights to inform increased protections.
(Microsoft, 2022, Microsoft Impact Summary)
Transparency is the foundation of trust. Microsoft continues to offer
clear information on how they run their business and work with
customers and partners. (Microsoft 2021 Annual Report)

Alignment and Contribution to SDGs

Microsoft has contributed to the Sustainable Development Goals
since 2015. (Jean-Yves Art & Daniel Akinmade Emejulu, 2021)
A number of Microsoft initiatives are directly and indirectly
advancing progress on all 17 SDGs, but there are 4 SDGs the
company focuses on. (Jean-Yves Art & Daniel Akinmade Emejulu,
2021)

Goal 4- Quality Education

To achieve this goal, Microsoft Philanthropies focus their investments
in three core areas: bringing industry volunteers to secondary schools
in the United States, Canada, and Mexico to teach computer science;
building the capacity of nonprofit organizations and education
providers to scale their impact, and supporting advocacy and
collective action to promote inclusion of computer science in formal
education. (Jean-Yves Art & Daniel Akinmade Emejulu, 2021)

Goal 8- Decent Work and Economic Growth.

Microsoft employs more than 150,000 employees worldwide and is
committed to providing skills training and economic opportunity. The
information mentioned in the “Support inclusive economic
opportunity” section shows their actions towards this goal.

The information in the previous paragraphs and Figure 1 shows their

visible action toward Goal 13- Climate Action.

Goal 16- Peace, Justice and Strong Institutions. To increase trust in

democratic processes and enhance election integrity, Microsoft has
developed an open-source software toolkit, ElectionGuard, that will
be incorporated into Hart InterCivic’s voting systems.
To help nonprofits proactively detect, prevent, and monitor security
risks, the Microsoft Tech for Social Impact team launched the
Security Program for Nonprofits, a
The Microsoft Democracy Forward Initiative -a program that includes
efforts to improve the security of campaigns, elections, and
organizations and institutions that underpin democracy. (Jean-Yves
Art & Daniel Akinmade Emejulu, 2021)

These are just a few examples, Microsoft has multiple partnerships

with profit and non-profit organizations and together they work
towards the same goal.

Conclusion
Looking at Microsoft's environmental proclamations, most of the
targets, although may look ambitious, are not false promises.
Microsoft Corporation has taken the necessary steps for a CSR
strategy that satisfies the interests of its major stakeholders;
Customers, Employees, Communities, Investors, and Governments.
Despite some controversies in the past, compared to other companies,
Microsoft seems to be the most proactive one with the best CSR
strategy. Microsoft implemented a lot of actions to correct what has
been done in the past. Their goals regarding the environment are
highly ambitious but the company seems to be on the right path. We
can place Microsoft on the Sustainability change matrix as a socially
responsible and sustainable company:

Microsoft corporate social responsibility is also an excellent triple

bottom line example, it actively focuses on all factors: proft, planet
and people.

Recommendations
Even if the company has an excellent CRS strategy, there is always
room for improvement. Their regard for materials and production
processes still requires attention and innovative solutions to become
100% sustainable. (Bruce, M. 2021)
Moreover, Microsoft still lacks key certifications, such as LEED in
many of their production sites. (Bruce, M. 2021)
Another idea could be for Microsoft to require the suppliers to reduce
emissions. Also, they could stop selling products to companies that
use them to dig up fossil fuels. Lastly, several components of
Microsoft’s plans are in a large remodeling stage and need more
development.
List of References

Fortune. (2022, April 26). Fortune 500.

https://fortune.com/fortune500/2020/search/?profitable=true&rank=asc

Microsoft. (2022, April 26). Facts About Microsoft. https://news.microsoft.com/facts-about-

microsoft/

Microsoft 2021 Annual Report. (2021, July 29). Microsoft.

https://www.microsoft.com/investor/reports/ar21/index.html#

Microsoft. (2022, April). 2021 Environmental Sustainability Report. Microsoft.

https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4RwfV

Microsoft. (n.d.). Recognition | Microsoft CSR. https://www.microsoft.com/en-us/corporate-

responsibility/recognition

Microsoft. (2022). Achieving more together 2021 Microsoft Impact Summary. Microsoft

Corp. https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4RWAH

Jean-Yves Art & Daniel Akinmade Emejulu. (2021). Microsoft and the United Nations

Sustainable Development Goals 2022. Microsoft.

https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4XHoJ

Bruce, M. (2021, August 3). Is Microsoft’s Sustainability Approach Enough? Impakter.

https://impakter.com/microsoft-sustainability-enough/

Mikocki, L. (2022, March 30). How the tech industry cures and exacerbates market failures.

Medium. https://laramikocki.medium.com/how-the-tech-industry-cures-and-

exacerbates-market-failures-2a6de0734b3d
Appendix

Figure 1: 2021 Progress. Source: Microsoft. (2022, April). 2021

Environmental Sustainability Report.

Figure 2: Microsoft Commitments. Source: Microsoft. (2022, April).

2021 Environmental Sustainability Report.