Overview Carbon Water Waste Ecosystems Appendix 19 Carbon negative (continued) Reducing Scope 3 emissions Scope 3 Further improving energy efficiency of We are reducing our Scope 3 emissions by more than devices and software half by 2030. While we do not have direct control over In our devices and software, we are continuing to the majority of emissions in the Scope 3 category, they 8.9% reduce carbon emissions and environmental impact represent the bulk of our emissions and we are from design to manufacturing. For further information addressing them in our carbon negative commitment Our Scope 3 carbon see the Devices Sustainability Report. by the following methods: emissions related to Surface devices was reduced The Surface Pro X uses less power than the Surface Pro 6, Improving supplier emissions data tracking by 8.9 percent (-524K In 2020, as reported to us by CDP, our top suppliers mtCO e) from a 2017 while providing similar high performance. Estimated reduced their collective carbon footprint by 21 million 2 total energy consumption for the Surface Pro X is 13.1 base year. kWh/year, compared with 18.2 kWh/year for the Surface metric tons of carbon dioxide equivalents (CO e). 2 Pro 6, equivalent to a 28 percent reduction. Our Devices team built an Audit Management System using Microsoft Power BI to embed compliance and Xbox sustainability into our business. Now, we can track Xbox recently added Regulatory Standby Plus (RS+) as a performance and enable continuous supply chain new power mode. At a high level, RS+ will provide the improvements by tracking supplier maturity in social power savings and environmental benefits of RS with the and environmental accountability. benefits of keeping the user’s OS and content up to date. Improving supplier emissions reporting This can reduce power from 15W to less than 2W during In 2020, we updated our Supplier Code of Conduct to standby mode. now require a greenhouse gas emission disclosure. This Windows is a first step to increase transparency and enable us to In May 2020, we launched the Windows Software work collaboratively with our suppliers to help reduce Sustainability Initiative. It aims to reduce the carbon their emissions. footprint of Windows software and will establish a set In 2021, this data will become an explicit aspect of our Extending the carbon fee to Scope 3 emissions of best practices for energy-efficient Windows app procurement processes for our supply chain, including We established our internal carbon fee in 2012 to fund development. We will build on this in FY21, aiming to informing buying decisions. We will continue working our carbon neutrality commitment. In 2019, we raised reduce the energy consumption of the top 20 most-used with our suppliers to on-board them to our new the fee to $15 per ton, which we charged to each Windows experiences, which together represent 90 approach and ensure compliance. business group across Microsoft based on their Scope 1 percent of active Windows energy usage. and 2 carbon emissions and business air travel. In 2020, we expanded the fee to cover each business Find out group’s Scope 3 emissions. While we’ve initially set the more here fee at a lower rate for Scope 3, it will ramp up over time until there is one single fee across our entire emissions portfolio. We are already seeing results, with accelerated investments in the energy efficiency of our software and hardware. Above left: Surface Pro X Above: Xbox