Overview Carbon Water Waste Ecosystems Appendix 86 Appendix D (continued) Key area Description of work Source location Strategy Climate-related • At a company level, the corporate ES team brings leaders from across the business together to identify which Download risks and short-, medium- and long-term climate risks and opportunities could have substantive financial or strategic here impact on the organization. This is complemented by formal identification and assessment processes. * italics denotes new opportunities • Microsoft Treasury assesses property risks (short-term) annually to value the global property insurance disclosures not included program using industry-standard risk models to estimate the probable impact from hazards like hurricanes, in 2020 CDP Response floods, and fires, each of which may be subject to increasing frequency and severity due to climate change. • The Microsoft Enterprise Business Continuity Management (EBCM) program’s Business Continuity Standard and Service Resilience Standard identify the baseline requirements for implementing business continuity disaster recovery and overall resilience at Microsoft, to help ensure our capability of recovery and preparedness in the event of a major or catastrophic business disruption that affects our ability to meet customer expectations. • At an asset level, business groups within our operating segments have their own processes. • In FY19, we initiated quantitative and qualitative physical (medium-term) and transition (long-term) risk and opportunity assessments for key Microsoft regions. In addition, we are assessing our alignment with the Task Force on Climate-related Financial Disclosures (TCFD) to ensure we are properly managing these risks and opportunities within our business and adequately planning for the future.* Impact of climate- • The ES team brings leaders from across the company together to align on management decisions to related risks and mitigate, transfer, accept, or control the identified climate-related risks and opportunities. To make decisions * italics denotes new on risk, we use our enterprise risk management (ERM) risk prioritization criteria in the context of business disclosures not included opportunities continuity and service resilience, which include the scope of impact (e.g. reputational, regulatory, and cost), in 2020 CDP Response potential return on investment, and time and resources required to implement changes. • The EBCM program works with the ERM program to ensure consistent alignment among risks and risk prioritization criteria and, ultimately, the final risk ratings. • In FY19, we committed to powering our datacenters with 70 percent wind, solar, or hydropower energy by 2023, and in FY20, we extended that commitment companywide and to 100 percent by 2025. • One method we use to respond to climate-related opportunities is our Sustainability Grants program, which drives climate-related energy and technology innovation; this program awarded more than $10 million in FY19 to projects or programs focused on better managing climate-related business activity.*