How can we advance sustainability?

2024 Environmental Sustainability Report Data Fact Sheet

Our environmental data

As part of Microsoft's commitment to disclose information about our environmental footprint, the following sections are a compilation of environmental metrics across greenhouse gas (GHG) emissions, energy, water, waste and circularity, and land. Section 1 presents greenhouse gas emissions in accordance with the GHG Protocol and management's criteria, and select environmental metrics that both reference the Global Reporting Initiative (GRI) Standards and are reported in accordance with management's criteria. Deloitte & Touche LLP performed a review engagement on management's assertion related to the specified information presented in Section 1 of this Environmental Data Fact Sheet as of and for the fiscal year ended June 30, 2023 (FY23) and includes their review report. Information relating to i) periods prior to the year ended June 30, 2023 (FY23), and ii) forward-looking statements, goals, and progress against goals, were not subject to the review and, accordingly, Deloitte & Touche LLP does not express a conclusion or any form of assurance on such information. Section 2 presents additional environmental metrics that show detail and breakdowns and was not subject to Deloitte & Touche LLP's review.

All reported values represent best available data at the time of publication. Data is adjusted to incorporate updated methodology, structural changes, and/or accuracy improvements per our recalculation policy described herein. Microsoft's structural changes policy is to begin including data the year following a merger and/or acquisition. Divestments will be reflected on data associated to the year when they occurred. Additional detail on these changes is included as footnotes where applicable.

03

04

04

05

05

05

06

06

06

06

07

07

07

08

08

08

10

16

20

21

21

21

21

22

22

Environmental data contents

Section 1: Our environmental data

1.1 Greenhouse gas (GHG) emissions


Section 1:

Our environmental data

• 1. For FY20 and FY21, values have been rounded except for Business Travel. Starting in FY22, all reported Scope 3 values are rounded to the nearest thousand mtCO2e.
• 2. Reported emissions for this category now incorporate emissions calculated using the life cycle assessment (LCA) coefficients for the portion associated with the manufacture of Microsoft devices as outlined in Section 1.9. Values for FY22 (previous year), and FY20 (base year) have been adjusted to reflect the following changes: incorporation of LCA methodology and estimation for the Nuance acquisition.
• 3. Reported emissions for this category now incorporate emissions calculated following the Global Logistics Emissions Council (GLEC) Framework for our Devices and Cloud business groups as outlined in Section 1.9. Values for FY22 (previous year), and FY20 (base year) have been adjusted to reflect this change.
• 4. These values reflect market-based emissions. Values rounded to nearest thousand mtCO2e.

1.1 Greenhouse gas (GHG) emissions


Table 1B - GHG emissions by scope (mtCO2e) with management's criteria


• 1. These values reflect market-based emissions.

Table 3 - GHG emissions by region (mtCO2e)



Table 4 - GHG emissions intensity (mtCO2e/revenue $M)


1.2 Energy

Table 6 - Energy consumption within the organization (MWh)


• 2. Reported values represent Microsoft's total renewable energy consumption expressed in MWh from onsite, renewable energy credits, power purchase agreements (PPAs), and green power tariff programs. Values reflect Microsoft's renewable electricity consumption at the time of reporting.

Table 7 - Renewable energy metrics


• 1. Values reflect Microsoft's percentage of renewable electricity consumption at the time of reporting.

Table 8 - Energy intensity (MWh/revenue $M)



1.3 Water


• 1. For FY23, total water withdrawal from areas with water stress was 5,326 megaliters (ML) (41%) and was primarily sourced from third-party water; total water discharge to areas with water stress was 2,045 ML (40%); and total water consumption from areas with water stress was 3,281 ML (42%). Water risk assessment was conducted using WRI's Aqueduct tool for areas in high or extremely high baseline water stress.
• 2. Brackish surface water/seawater and produced water categories are not relevant to Microsoft since there is no direct withdrawal or discharge of water from and to these sources. For withdrawals, data breakdown between 'freshwater' and 'other water' categories, and data for third-party withdrawal sources for areas with water stress is currently unavailable and will be part of data improvements going forward. For the periods presented we are not gathering data around water storage since it is not a significant portion of our water inventory.
• 3. Only discharges to third parties are relevant since water that is not consumed at Microsoft sites is discharged to local municipal treatment plants. Discharges to surface water, groundwater, and seawater, and volume sent for use to other organizations are not applicable. For discharges, data breakdown between 'freshwater' and 'other water' categories is currently unavailable and will be part of data improvements going forward. Primary treatment of water is not relevant because there are no onsite water treatment plants in Microsoft operations, as there is no requirement to conduct onsite primary treatment of discharge by any environmental regulation or standard.
1.4 Waste and circularity

Table 10 - Operational waste generated, diverted, and directed to disposal (metric tons) 1,4


• 1. Data for reuse or other diversion methods besides recycling for hazardous waste, and other disposal operations besides landfilled and incineration for non-hazardous waste is currently not applicable. Reported waste data is mainly directed for disposal offsite.
• 2. Incinerated category under non-hazardous includes incineration with and without energy recovery.
• 3. The 'other' category under hazardous includes landfilled and incinerated with and without energy recovery waste.
• 4. Starting in FY23, reported values incorporate an updated extrapolation approach, only for non-campus workplace locations not providing data, that more accurately reflects waste diversion practices as outlined in Section 1.9.

Table 11 - Product packaging circularity metrics



1.5 Ecosystems

Total acres categorized by the status at the close of the reporting period as either (i) funded or (ii) protected

A description of partnerships for which contributions were made that exist with third parties to protect habitat areas



Since making this commitment in April 2020, Microsoft identified two leading land protection organizations, the National Fish and Wildlife Foundation (NFWF) within the United States and The Nature Conservancy (TNC) globally, to partner with on our land protection journey. A data-informed approach to identify ecosystems most at risk was used, using TNC's last chance ecosystem framework and NFWF's national landscape conservation framework. Within each of the two partnerships the following organizations will hold the conservation easement/own the protected land:

• · The Nature Conservancy: Belize Maya Forest Trust
• · National Fish and Wildlife Foundation: Montana Department of Fish, Wildlife, and Parks; New Mexico Land Conservancy, Rocky Mountain Elk Foundation for the US
• 1. Reported funded acres in FY23 have been updated to reflect Microsoft's final project funding distribution.
1.6 Management's assertion

Management of Microsoft Corporation is responsible for the completeness, accuracy, and validity of the disclosures included in this Section 1 of the Environmental Data Fact Sheet. Management is also responsible for the collection, quantification, and presentation of the specified information included in Section 1 of the Environmental Data Fact Sheet and for the selection or development of the criteria, which management believes provides an objective basis for measuring and reporting on the specified information. Management of Microsoft Corporation asserts that the specified information included in Section 1 of the Environmental Data Fact Sheet as of, and for the fiscal year ended June 30, 2023 (FY23) is presented in accordance with the criteria set forth in Section 1.10, Reporting criteria.

1.7 Description of the company and inventory boundary

Microsoft's environmental sustainability data, which includes GHG emissions, energy, waste, product packaging recyclability and single-use plastics, water, and ecosystem metrics, has been prepared following Microsoft's fiscal year basis as the reporting period covering the timeframe of July 1 to June 30. The Corporate, External and Legal Affairs (CELA) Sustainability team within Microsoft under the leadership of the Chief Sustainability Officer (CSO) holds the responsibility to monitor and report sustainability environmental data. For setting organizational boundaries and for corporate reporting of GHG emissions, energy, waste, product packaging recyclability and single-use plastics, and water metrics in the preceding Tables 1-12, Microsoft uses the operational control approach. This includes global wholly owned and partially owned subsidiaries over which Microsoft has management and operational control, including Microsoft owned and leased real estate facilities and datacenters.

1.8 Information on metrics

Microsoft announced in January 2020 that we will be carbon negative by 2030 and that by 2050 we will remove from the atmosphere an equivalent amount of all the carbon the company has emitted either directly or by our electricity consumption since being founded in 1975. Microsoft plans to achieve this goal by reducing Scope 3 emissions (market-based and management's criteria) by more than half; and by reducing Scope 1 and 2 (marketbased) emissions to near zero by the middle of the decade through energy efficiency work and reaching 100% renewable energy by 2025. The baseline year is 2020, which was the year when the announcement was made. Microsoft has a metrics recalculation policy for historical data (including previous and base year) to ensure consistency whenever year-over-year structural changes, methodology changes, or other accuracy improvements are significant. Structural changes include mergers, acquisitions, and divestitures. Microsoft will begin to include data associated from any merger and/or acquisition the year following the close of such transaction. Divestments will be reflected in data the year when the transaction occurred. Methodology changes include changes in a calculation methodology or new activity types for greater data granularity. Accuracy improvements include the correction of significant errors or cumulative minor errors that together are significant and/or updates to available supplier reported data. Footnotes under each table will highlight when specific adjustments are made. Microsoft's GHG inventory includes five of the seven GHGs addressed by the Kyoto Protocol-carbon dioxide (CO2),

methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), and sulfur hexafluoride (SF6). Microsoft does not currently use or emit perfluorocarbons (PFCs) and nitrogen trifluoride (NF3).

This carbon inventory is what is in scope of our carbon negative commitment.

The following is a more detailed list of activities included in the GHG inventory:

• · Scope 1 direct GHG emissions from onsite fossil fuel combustion (including natural gas, propane, fuel oil, and diesel), executive air travel, ground transportation (Microsoft owned and directly leased), hydrofluorocarbon (HFC) refrigerants, and SF6 used at some facilities.
• · Scope 2 indirect GHG emissions from purchased electricity, chilled water, and steam. The location-based method is based on average emission factors for the electricity grids that provide electricity to our datacenters, buildings, and campuses. The market-based method includes consideration of contractual arrangements under which Microsoft procures power from specific suppliers or sources, such as renewable energy. In the market-based method, we also capture the impact from onsite renewable energy generation, power purchase agreements (PPAs), the purchase of unbundled energy attribute certificates (EACs), and green power products.
• · Scope 3 indirect GHG emissions for the following categories identified as relevant for Microsoft:
• · Category 1 - Purchased Goods & Services
• · Category 2 - Capital Goods
• · Category 3 - Fuel- and Energy-Related Activities (location-based and market-based)
• · Category 4 - Upstream Transportation (reported both under the GHG Protocol and per management's criteria, see Section 1.10)
• · Category 5 - Waste
• · Category 6 - Business Travel (reported both under the GHG Protocol and per management's criteria, see Section 1.10)
• · Category 7 - Employee Commuting
• · Category 9 - Downstream Transportation
• · Category 11 - Use of Sold Products (reported both under the GHG Protocol and per management's criteria, see Section 1.10)
• · Category 12 - End-of-Life of Sold Products
• · Category 13 - Downstream Leased Assets
For carbon removal, the following Microsoft criteria is used to select carbon removal offsets that we contract: Microsoft Criteria for High-Quality Carbon Dioxide Removal. Both third-party certified and uncertified tons are purchased in an effort to help develop the market, and only certified tons are applied to the carbon neutrality scope (Scope 1, Scope 2 market-based, and business air travel). For the certified portion, the following validation and verification bodies have provided the certification: Voluntary Carbon Standard (VCS), American Carbon Registry (ACR), Climate Action Reserve (CAR), and California Air Resources Board (CARB). The reported carbon removal contracted value total also includes future tons that are to be delivered in subsequent years.

Microsoft procures and uses renewable energy from onsite generation, unbundled EACs, power purchase agreements (PPAs), and green power products. The purchases of EACs include renewable energy certificates (RECs) (Green-e certified), guarantees of origin (GO), renewable energy guarantees of origin (REGO), I-RECs, tradable instrument for global renewables (TIGR), J-Credits, Non-Fossil Fuel Certificates (NFCs), large-scale energy certificates (LGC), Green Electricity Certificates (GECs), and PowerPlus. In some cases for unbundled EAC purchases, Microsoft receives the certificates after our inventory has been compiled and assured, due to the timing certificate registry processes follow. Microsoft procures enough renewable electricity to match 100% of our global electricity consumption. To calculate Scope 2 emissions from a market-based approach, Microsoft captures the impact across all renewable electricity purchases and matches that with the market where we operate, aligned with the GHG Protocol. In the case that renewable electricity is not procured in the markets where we operate and to ensure we maintain the 100% renewable electricity commitment, enough renewable electricity from nearby markets is purchased. Finally, Microsoft captures the impact from onsite generation, PPAs, and green power products to support our progress against our commitment to have 100% direct renewable electricity by 2025.

Microsoft's water inventory includes the withdrawal, consumption, and discharge associated with assets under our operational control. These volumes represent global enterprise-wide operations including owned and leased offices, datacenters, labs, and retail. This data supports progress tracking against current water positive program commitments.

For waste and circularity, operational waste and product packaging recyclability and single-use plastics are included. The operational waste inventory includes the mass of waste generated from operations within Microsoft's operational control that are landfilled, incinerated, recycled, reused, and composted for both non-hazardous and hazardous categories, for both owned and leased facilities. This waste inventory supports progress tracking against the commitment of diverting 90% of operational waste at datacenters and campuses. Currently the waste inventory does not include waste from construction and deconstruction activities.

For product packaging, both packaging recyclability and single-use plastics metrics consider all hardware packaging (retail and commercial) and consumer software packaging of the products produced and sold during the reporting year. Similarly, these metrics support our product packaging-related commitments to make fully recyclable product packaging by 2030, and to eliminate single-use plastic in packaging by 2025. The calculations exclude impact from inks, glues, coatings, and label liner material that is removed before a label is applied.

Reported data for ecosystems includes the total area of land that has been funded and protected based on the presented definition in Table 1.10 for reporting criteria. Microsoft's land protection commitment was established in FY20. Reported data represents progress through the end of FY23.

According to Microsoft's structural changes policy previously described in the introduction section, FY23 data across metrics now incorporates impact from the Nuance acquisition which was previously completed in March 2022. Additional details are included as needed in the table footnotes to highlight any prior year adjustments. Structural changes items are part of Microsoft's continuous data improvement activities and will be included and highlighted accordingly in the relevant reporting cycle.

1.9 Methodology and emission factors

Carbon - Scope 1 and 2

Primary data is used to calculate emissions for both Scope 1 and 2 emissions. Estimates are used where primary data is not available. Depending on the type of site, the estimation methodology uses capacity (MW) or floorspace based coefficients to extrapolate emissions for those locations where primary data is unavailable. Activity data is collected internally and stored in an internally developed data platform which then applies the corresponding emission factors to calculate emissions. Microsoft uses the 100-year IPCC Fourth Assessment when it comes to applying global warming potential values.



Emission factors presented in the preceding table apply to current reporting year and are used for location-based accounting. For market-based accounting, Microsoft uses a zero-emission factor for procured renewable electricity. In the locations where Microsoft did not procure renewable electricity, utility-based and residual emission factors were unavailable; therefore we used the average grid factors presented previously.

Carbon - Scope 3

Microsoft calculates and reports Scope 3 emissions for all relevant categories. The following table summarizes which categories are relevant and a description of the methodologies and emission factors used.

Scope

3 category

Emissions calculation methodology

Purchased

Services

Goods and

This category includes emissions from upstream purchasing of goods and services, including direct and indirect goods. Microsoft has been using an ISO 14040 /ISO 14044 compliant life cycle assessment (LCA) approach for many years to track the emissions associated with its devices. In FY23, Microsoft started using its LCAs to calculate the portion of emissions associated with the manufacture of devices Microsoft sold during the reporting year including Xbox devices, Surface devices, HoloLens, keyboards, mice, and other peripherals. Microsoft utilized Makersite and internal software engineering teams in order to automate and scale the modeling of complex electronic products. To ensure a more supply chain specific accounting process, the system analyzes the bill of materials and material composition from full material declarations collected from suppliers, resulting in LCA-based emissions that have increased accuracy, transparency, and representativeness. GWPs are from the IPCC Fourth Assessment Report (AR4), 100-year average. For the rest of the emissions, Microsoft requests carbon emissions data from its suppliers and uses their responses to determine Scope 1, Scope 2, and upstream Scope 3 emission factors (mtCO2e/$ revenue). The latest available responses are used, so this report's inventory considers 2023 submissions (that is, 2022 data). Microsoft estimates emissions for suppliers who submitted data by multiplying their response-derived factor by the annual spend with the supplier. All other spend is mapped to corresponding industry sectors and then multiplied by cradle-to-gate emission factors by sector from UK Defra's 'UK Defra, Table 13 - Indirect emissions from the supply chain. March 2014'-updated per the latest inflation and currency conversion rates. Corporate-wide expense data for all company divisions is obtained from the finance department. Activities already included in Scope 1 and Scope 2 (such as electricity purchases) and other Scope 3 categories (such as capital goods) were removed to prevent double counting. Global warming potentials (GWP) values are derived from the underlying supplier responses and Defra data sources.

Percentage of emissions calculated using supplier data

51%


Scope

3 category

Emissions calculation methodology

Business Travel

This category includes emissions from commercial air travel, hotel night stays, rail travel, reimbursed mileage, rental cars, and taxi/rideshares. For commercial air and rail travel, Microsoft Corporate Travel provides flight/ride-level airport codes and cabin class data. The airport/rail station codes are used to calculate distances to determine whether the flights/rides were short, medium, or long haul. Using the distance-based method, flight distances and cabin class are used to calculate CO2e emissions, using the appropriate tank-to-wake emission factors from 2022 Government GHG Conversion Factors for Company Reporting. For hotel night stays, Microsoft's preferred hotel vendors provided emissions per hotel night stay coefficients. For other hotel chains, emissions were estimated based on nights stayed and the emission factors from the EPA's Greenhouse Gas Inventory Guidance: Indirect Emissions from Events and Conferences (Dec 2018). For rental cars, mileage, fuel, and emission data was provided from each rental car company. For taxi/rideshare and reimbursed mileage, emissions were estimated based on spend using emission factors from EPA Emission Factor Hub. March 2018. GWPs are from the IPCC Fourth Assessment Report (AR4), 100-year average.

Percentage

calculated

of emissions

Percentage

calculated

of emissions

using supplier

data

3 category

Emissions calculation methodology

data

91%

Scope

using supplier

Sustainable

Fuel (SAF)

Aviation

(management's

criteria)

100%

This category includes the emissions associated with Category 4 -

Business Travel with SAFc. For Scope 3 Category 4 emissions with SAFc,

Upstream Transportation and Distribution with SAFc and Category 6 -

the emissions reductions from the volume of SAF associated with SAFc

calculated using the previously stated methodology for Category

purchased for the reporting year is applied against air cargo emissions

4 - Upstream Transportation and Distribution to derive the reported

the emissions reductions from the volume of SAF associated with SAFc

annual emissions figure. For Scope 3 Category 6 emissions with SAFc,

purchased for the reporting year is applied against air travel emissions

Business Travel, inclusive of well-to-tank and tank-to-wake emissions,

calculated using the previously stated methodology for Category 6 -

using the appropriate factors from Defra's 2022 Government GHG

emissions figure. The total emissions reductions from the volume of SAF

Conversion Factors for Company Reporting to derive the reported annual

associated with SAFc purchased for the reporting year are allocated

by management on where the SAFc should be applied. Management's

between Category 4 and Category 6 based on an internal determination

methodology for reporting SAFc in these categories was informed by the

Fuel Certificate Emissions Accounting and Reporting Guidelines (WEF

approach outlined in the World Economic Forum Sustainable Aviation

Accounting and Reporting Guidelines). This guideline informed both the

as how to attribute the benefits associated with SAFc for corporate travel

approach for calculating and reporting the well-to-wake emissions as well

and air freight shipments. The SAF certificates we purchase are required

custody, and third-party certification. SAF certificates, which are certified

to include details about the SAF characteristics, origin and chain-of-

prior to delivery to Microsoft, must be certified by an independent

recognized sustainability certification scheme such as the International

third party that they align with the requirements of an internationally

Sustainability & Carbon Certification scheme or the Roundtable on

These SAFc requirements were also informed by the WEF Accounting and

Sustainable Biomaterials including batch number and fuel/material type.

Reporting Guidelines.

Percentage



Energy

As part of our carbon negative goal, Microsoft set a target to procure enough direct renewable electricity to cover 100% of our electricity usage by 2025, meaning that we will have power purchase agreements (PPAs) or other long-term contracts for green power products for 100% of carbon-emitting electricity consumed by all our datacenters, buildings, and campuses. To calculate this percentage of direct renewable electricity, Microsoft developed a methodology which considers the total direct renewable electricity consumption divided by the total electricity consumption. The total direct renewable electricity consumption is the sum of renewable electricity the entity directly produced, renewable electricity purchased via renewable PPAs and/or green power products, and the renewable portion of the electricity grid mix. Primary data is used to represent the contracted renewable electricity based on reports produced and submitted by the contracted assets in our portfolio. The renewable portion of the electricity grid mix is the amount of renewable electricity that is on the power grid in the region of the Microsoft facility that can be claimed as going into the electricity that our operations consume. The renewable portion of the electricity grid mix used in the calculation is based on publicly available data for regions in which we have determined the region's grid mix has defensible claims, which is defined as regions where either (1) EACs are retired by a utility or government entity on behalf of all utility/grid ratepayers, or (2) no EAC or customer-specific claims exist. For geographies where publicly available data is incomplete or nonexistent, we apply assumptions based on historical data or trends, and/or assume zero renewable electricity by default in their grid mix. Microsoft uses an internally developed renewable grid mix policy to support and govern the process for determining the renewable energy grid mix that can be counted toward our commitment. To calculate our percentage of direct renewable electricity, we take the total direct renewable electricity consumption, divide it by our total electricity consumption, and multiply by 100.

Additionally, as part of our carbon neutral (as defined in Table 5) target, Microsoft plans to achieve 100% renewable electricity each year through a combination of considering not only direct renewable energy but also the purchase of unbundled EACs. For this metric, the renewable portion of the electricity grid mix is excluded from the calculation. The unbundled EACs included are listed in Section 1.8 of this fact sheet. To calculate the percent of renewable electricity, we add up the various forms of renewable electricity and then divide it by Microsoft's total electricity consumption, and multiply by 100. Standard conversion factors are used for all energy metrics.

Water

Primary data is used to calculate water withdrawal, discharge, and consumption where Microsoft operates. Estimates are used where primary data is not available. Water withdrawals are based on data from utility bills from our largest sites and, in some cases, estimations. A water withdrawal estimation methodology was internally developed for sites where primary data is unavailable that considers square footage, electricity consumption, and datacenter cooling technology type. Where discharges and consumption are not metered, amounts are estimated annually as part of the global water inventory aggregation process. Most of our sites do not currently have discharge meters. For office buildings without discharge meters, water consumption is assumed to be 10% of withdrawals unless they have landscaping that requires irrigation. For datacenters, the cooling technology

type is used to drive the estimation. It is estimated that discharge equals the difference between withdrawals and consumption.

Microsoft continues to work on improvements for water data collection, including data on the sources of our water withdrawals. This will allow us to know if water is coming directly from freshwater sources (groundwater and surface water), or from alternative water sources (reclaimed water procured from a water utility or harvested rainwater). Knowing the source of water withdrawals helps us incentivize the use of alternative water sources through our replenishment and reduction targets.

Waste and circularity

Primary data is used to calculate waste generation where Microsoft operates. Operational waste mass (including e-waste) is based on data from invoices and/or vendor and third-party reports. In the absence of actual data, there is an extrapolation methodology. Depending on the type of site, the methodology uses capacity (MW) based coefficients by region or attendance to extrapolate waste for those locations where primary data is unavailable. The extrapolation excludes e-waste, and all extrapolated waste is assumed to be landfilled in cases where the disposal or diversion method is unknown. Starting in FY23, we have updated the extrapolation approach only for non-campus workplace locations not providing data in our portfolio. Under this approach we apply an attendancebased global operational waste mass coefficient, as well as recycling and compost diversion rates from applicable reported workplace data (derived from actuals). Since most of the non-campus workplace sites are leased spaces within a larger building, obtaining actual waste data can be challenging. This updated approach represents an improvement that more accurately reflects waste diversion practices that are in place at non-campus workplace sites.

Product packaging recyclability and the single-use plastics metrics are used to track our progress against our zero waste program commitments. The design of all Microsoft product packaging are to be 100% recyclable in OECD (Organization for Economic Cooperation and Development) countries by 2030; and contain 0% single-use plastic by 2025. In both cases, primary data is used from the bill of materials associated to the product packaging units in scope. For product packaging recyclability, at the product packaging unit level, an end of life (EOL) scoring is assigned to each packaging component based on publicly available information regarding the existing recovery infrastructure in the OECD markets. Currently our methodology is primarily based on publicly available information from the United States which is one of our biggest markets. Scores indicate relative acceptance of materials to recycling, and range from 1 to 5, where a score of 1 means up to 20% recyclable (not generally accepted) and a score of 5 is 100% recyclable (widely accepted to be recycled). A recyclability percentage is computed for each packaging unit by adding the product of each component's weight and EOL scores and dividing by the maximum score value of 5. The reported enterprise-wide level metric is the simple average of all product packaging recyclability percentages in scope. For the single-use plastics metric, the percentage by weight of single-use plastics is calculated for each packaging unit. The enterprise-wide level metric is the simple average of all single-use plastics percentages for each product packaging in scope.

1.10 Reporting criteria

The following summary table defines the criteria for each specified metric included in Section 1 of the Environmental Data Fact Sheet. Management is responsible for the selection of the criteria or the development of the criteria ('management's criteria'), which management believes provide an objective basis for measuring and reporting on the specified information referenced in this table.

Microsoft has reported the information cited in this GRI content index for the fiscal year ended June 30, 2023 (FY23) with reference to the GRI Standards using GRI 1: Foundation 2021.


17




1.11 Independent accountant's review report



Deloitte & Touche LLP 1015 Second Avenue Suite 500 Seattle, WA 98104-1126 USA

To the Board of Directors of Microsoft Corporation

We have reviewed management of Microsoft Corporation's (the 'Company') assertion that the specified information included in Section 1 of the 2023 Environmental Data Fact Sheet ('Fact Sheet') as of and for the fiscal year ended June 30, 2023 is presented in accordance with the criteria set forth in Section 1.10, Reporting criteria in the Fact Sheet. The Company's management is responsible for its assertion. Our responsibility is to express a conclusion on management's assertion based on our review.

Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA) in AT-C Section 105, Concepts Common to All Attestation Engagements, and AT-C Section 210, Review Engagements. Those standards require that we plan and perform the review to obtain limited assurance about whether any material modifications should be made to management's assertion in order for it to be fairly stated. The procedures performed in a review vary in nature and timing from and are substantially less in extent than, an examination, the objective of which is to obtain reasonable assurance about whether management's assertion is fairly stated, in all material respects, in order to express an opinion. Accordingly, we do not express such an opinion. Because of the limited nature of the engagement, the level of assurance obtained in a review is substantially lower than the assurance that would have been obtained had an examination been performed. We believe that the review evidence obtained is sufficient and appropriate to provide a reasonable basis for our conclusion.

We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements in accordance with the AICPA Code of Professional Conduct. We applied the Statements on Quality Control Standards established by the AICPA and, accordingly, maintain a comprehensive system of quality control.

The procedures we performed were based on our professional judgment. In performing our review, we performed analytical procedures, inquiries, and other procedures as we considered necessary in the circumstances. For a selection of the specified information included in the Fact Sheet, we performed tests of mathematical accuracy of computations, compared the specified information to underlying records, or observed the data collection process.

The preparation of the specified information included in the Fact Sheet requires management to establish and interpret the criteria, make determinations as to the relevancy of information to be included, and make estimates and assumptions that affect the reported information. Measurement of certain amounts includes estimates and assumptions that are subject to substantial inherent measurement uncertainty, including for example, the accuracy and precision of conversion factors or estimation methodologies used by management. Obtaining sufficient appropriate review evidence to support our conclusion does not reduce the inherent uncertainty in the specified information included in the Fact Sheet. The selection by management of different but acceptable measurement methods, input data, or assumptions, may have resulted in materially different amounts for the specified information being reported.

Information outside of the specified information included in Section 1 of the 2023 Environmental Data Fact Sheet was not subject to our review and, accordingly, we do not express a conclusion or any form of assurance on such information. Further, any information relating to: i) periods prior to the year-ended June 30, 2023 or ii) information relating to forward looking statements, targets, goals, and progress against goals, was not subject to our review and, accordingly, we do not express a conclusion or any form of assurance on such information.

Based on our review, we are not aware of any material modifications that should be made to management of Microsoft Corporation's assertion that the specified information included in Section 1 of the 2023 Environmental Data Fact Sheet as of and for the fiscal year ended June 30, 2023 is presented in accordance with the criteria set forth in Section 1.10, Reporting criteria in the Fact Sheet, in order for it to be fairly stated.


Section 2:

Additional environmental metrics

• 2. For a breakdown on renewable electricity by technology type, see our latest CDP Climate Change response.


Table 13 - Other emissions (metric tons)



Table 14 - Electricity consumption by region (MWh)



Table 15 - Renewable electricity consumption by region (MWh) 1,2




Table 18 - Verification/assurance

FY20

FY21-FY23

Data for this period of time was third-party verified by APEX using a limited level of assurance. Following please find the criteria used to measure the carbon, energy, and water information:

For carbon and energy

World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol, Corporate Accounting and Reporting Standard, revised edition, including Scope 2 Guidance amendment (Scope 1 & 2); WRI/WBCSD Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Scope 3).

For water

CDP Water Security Reporting Guidance

The scope of the verification included GHG emissions for Scope 1, Scope 2, Scope 3 business air travel, total energy consumption, total electricity consumption, total renewable electricity consumption, total offsets purchased, total water withdrawals, total water consumption, and total water discharges. For FY20, the rest of Scope 3 category emissions identified as relevant were also included. Latest data adjustments highlighted in this report made to historic data were outside of the scope of these previous years' review.

Any revisions made to FY20 reported values on this report were outside of the limited assurance review done by APEX.

This fact sheet is for informational purposes only and includes estimates, projections, and other 'forwardlooking statements' within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words 'believe,' 'project,' 'expect,' 'anticipate,' 'estimate,' 'intend,' 'strategy,' 'future,' 'opportunity,' 'plan,' 'may,' 'should,' 'will,' 'would,' 'will be,' 'will continue,' 'will likely result,' and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. Microsoft describes risks and uncertainties that could cause actual results and events to differ materially in our reports filed with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Microsoft obtains limited thirdparty assurance for the most recent year (FY23) prior to the issuance of the Environmental Data Fact Sheet. The limited assurance reviews performed by Deloitte & Touche LLP in FY21 and FY22 do not contemplate the re visions to the prior year metrics and therefore Deloitte & Touche LLP provides no assurance related to the revisions consistent with our policies disclosed in Section 1.8



Stay up to date on our progress

Learn more about our sustainability journey and sign up for news and updates here.

Data Fact Sheet Microsoft Environmental Sustainability Report 2024