Overview Carbon Water Waste Ecosystems Appendix 87 Appendix D (continued) Key area Description of work Source location Strategy Resiliency across • A physical and transition risk assessment was conducted on 400 of Microsoft’s most important facilities. * italics denotes new scenarios for Two scenarios were considered in this analysis: 1) a business as usual scenario where the world warms over disclosures not included 4°C above pre-industrial temperatures; and 2) a 2°C aligned scenario. The analysis quantified, in financial terms, in 2020 CDP Response (continued) organizational the top climate-related risks and opportunities. The analysis quantified climate risk in financial terms by: strategy - Integrating climate and business data from multiple sources including governmental, academic, public, and commercial. - Translating this data into consistent formats mapped onto coherent spatial and temporal grids. - Statistically processing data into probability distribution functions at each point, allowing the hazard data to be coupled to econometric models, producing financial impact curves. - Translating this into financial terms to provide decision-relevant information. The software used has global coverage, spans decadal time periods from 2010 to 2100, and is aligned with the TCFD framework*. • The top 400 Microsoft facilities were included in the analysis—facilities selected for highest value and high-energy consuming sites and covering all geographies. The selection included datacenters, retail stores, offices, and executive suites. • The analysis findings revealed that we may experience significant impacts. These findings warrant that we act now to mitigate the risks, build adaptive capacity, maximize our opportunities, and enhance the resilience and equity of our enterprise and the communities where we live and work. • We are currently assessing the adaptive capacity of our most at-risk facilities to the identified climate risks and identifying opportunities to enhance resilience.