2. Organizational Profile...... 4/299 Name GRI 2.1...... 4/299 Primary Brands, Services GRI 2.2...... 5/299 Screens−General...... 6/299 Screens−Animals...... 8/299 Involvement (EIRIS)...... 9/299 Renewable Energy Dev...... 10/299 Electricity Fossil...... 11/299 Screens−Environment...... 12/299 Biological Fuels...... 13/299 Operational Structure GRI 2.3...... 14/299 Headquarters GRI 2.4...... 15/299 Countries/Operation...... 16/299 Countries Subsidiaries...... 18/299 Countries of Operation GRI 2.5...... 20/299 Legal Form GRI 2.6...... 22/299 Markets Served GRI 2.7...... 23/299 Scale of Organization GRI 2.8...... 24/299 Significant Changes GRI 2.9...... 25/299 Awards Received GRI 2.10...... 26/299 Quality Award...... 27/299

3. Report Parameters...... 28/299 Report Profile...... 28/299 Reporting Period GRI 3.1...... 28/299 Previous Report GRI 3.2...... 29/299 Reporting Cycle GRI 3.3...... 30/299 Contact Point GRI 3.4...... 31/299 Report Scope and Boundary...... 32/299 Define Report Content GRI 3.5...... 32/299 Boundary of Report GRI 3.6...... 33/299 Limit on Report Scope GRI 3.7...... 34/299 Basis for Reporting GRI 3.8...... 35/299 Data Measurement &Calculations GRI 3.9...... 36/299 Restatements GRI 3.10...... 37/299 Changes from Previous GRI 3.11...... 38/299 GRI Content Index GRI 3.12...... 39/299 Assurance...... 40/299 Assurances Practices GRI 3.13...... 40/299

4. Governance, Commitments, and Engagement...... 41/299 Governance...... 41/299 Structure, Committees GRI 4.1...... 41/299 Governance Compliance...... 43/299 Indep Committees...... 44/299 Director Relationships...... 45/299 Table of Contents

4. Governance, Commitments, and Engagement Chair/CEO Separation GRI 4.2...... 46/299 Board Members GRI 4.3...... 47/299 Communicate with Board GRI 4.4...... 48/299 Compensation Linkage GRI 4.5...... 50/299 Compensation Report...... 51/299 Conflicts of Interest GRI 4.6...... 52/299 Manager Oversight...... 53/299 Code of Ethics...... 54/299 Board Qualifications GRI 4.7...... 55/299 Economic, Environmental, Social Values GRI 4.8...... 56/299 Economic, Environmental, Social Oversight GRI 4.9...... 57/299 Board Evaluation GRI 4.10...... 58/299 Commitments to External Initiatives...... 59/299 Precautionary Approach GRI 4.11...... 59/299 Principles Endorsed GRI 4.12...... 60/299 Memberships GRI 4.13...... 61/299 Risk Considerations...... 62/299 Risk Management...... 63/299 SEE Risks...... 64/299 Risk Report...... 65/299 Quality Certification...... 66/299 Vendor Standards...... 67/299 Human Rights Endorsements...... 68/299 Stakeholder Engagement...... 69/299 Stakeholders Engaged GRI 4.14...... 69/299 CSR Report...... 70/299 Identify Stakeholder GRI 4.15...... 71/299 Stakeholder Engagement GRI 4.16...... 72/299 Engagement Result GRI 4.17...... 74/299 Community Engagement...... 75/299 Stakeholder Political...... 76/299

5. Management Approach and Performance Indicators...... 77/299 Economic...... 77/299 Economic (Optional)...... 77/299 Economic (Optional)...... 77/299 Economic: Disclosure on Management Approach...... 78/299 Economic Disclosure on Management Approach GRI EC...... 78/299 Charitable Giving...... 79/299 Charitable Information...... 80/299 Foundation Report...... 81/299 Economic Performance Indicators...... 82/299 Aspect: Economic Performance...... 82/299 Economic Value Generated GRI EC1...... 82/299 Climate Change Financial Risk GRI EC2...... 83/299 RDExpenditures...... 84/299 Benefit Plan Coverage GRI EC3...... 85/299 Governmental Financial Assistance GRI EC4...... 86/299 Revenue by Region...... 87/299 Contractor Location...... 88/299 Table of Contents

5. Management Approach and Performance Indicators Supplier Stan (EIRIS)...... 89/299 Aspect: Market Presence...... 92/299 Entry Wage Ratios GRI EC5...... 92/299 Local Supplier Use GRI EC6...... 93/299 Local Hiring GRI EC7...... 94/299 Aspect: Indirect Economic Impacts...... 95/299 Total Donations...... 95/299 Local Investment Impact GRI EC8...... 96/299 Indirect Economic Impacts GRI EC9...... 97/299 Environmental...... 98/299 Environmental (Optional)...... 98/299 Environmental (Optional)...... 98/299 Environmental: Disclosure on Management Approach...... 99/299 Environmental Disclosure on Management Approach GRI EN...... 99/299 Climate Change Assess...... 100/299 Environmental Policy...... 101/299 Environmental Policy Adherence...... 102/299 Climate Position...... 103/299 Timber Products...... 104/299 Environmental Performance Indicators...... 105/299 Aspect: Materials...... 105/299 Timber Sourcing...... 105/299 Hazardous Chemicals...... 106/299 Ozone Depleting Chem...... 107/299 Materials Used GRI EN1...... 108/299 Use of Recycled Input GRI EN2...... 109/299 Aspect: Energy...... 110/299 Energy Consumption...... 110/299 Direct Energy Use GRI EN3...... 111/299 Indirect Energy Use GRI EN4...... 112/299 Energy Use Reduction...... 113/299 Energy Saved GRI EN5...... 114/299 Product Energy Saved GRI EN6...... 115/299 Reduce Indirect Energy GRI EN7...... 116/299 Aspect: Water...... 117/299 Water Use Factored...... 117/299 Water Withdrawal GRI EN8...... 118/299 Water Sources Affected GRI EN9...... 119/299 Water Reused GRI EN10...... 120/299 Aspect: Biodiversity...... 121/299 UN Protected Areas...... 121/299 Biodiverse Land GRI EN11...... 122/299 Impact on Biodiversity GRI EN12...... 123/299 Biodiversity in EIAs...... 124/299 Restored Habitats GRI EN13...... 125/299 Biodiversity Program...... 126/299 Biodiversity Action...... 127/299 Biodiversity Strategy GRI EN14...... 128/299 Endangered Species GRI EN15...... 129/299 Aspect: Emissions, Effluents, and Waste...... 130/299 Table of Contents

5. Management Approach and Performance Indicators Direct, Indirect Greenhouse Gas GRI EN16...... 130/299 Other Indirect Greenhouse Gas GRI EN17...... 131/299 Climate Strategy...... 132/299 GHG Verification...... 134/299 Greenhouse Gas Reductions GRI EN18...... 135/299 Refrigerant Phaseout...... 136/299 Ozone−Depleting Emissions GRI EN19...... 137/299 NOx, SOx &Other Air Emissions GRI EN20...... 139/299 Air Emission Reduction...... 140/299 Water Discharge GRI EN21...... 141/299 Total Waste GRI EN22...... 142/299 Water Emission Data...... 145/299 Water Pollution...... 146/299 Significant Spills GRI EN23...... 147/299 Hazardous Waste GRI EN24...... 148/299 Hazardous Waste Reduction...... 149/299 Water Discharge Impact GRI EN25...... 150/299 Aspect: Products and Services...... 151/299 Mitigate Product Impact GRI EN26...... 151/299 Product Design...... 152/299 Beneficial Products...... 154/299 Eco−Efficiency Data...... 156/299 Product Contributions...... 157/299 Sold Products Packaging Reclaimed GRI EN27...... 158/299 Sustainable Forestry...... 159/299 Green Tariff...... 160/299 Environmental Liability...... 161/299 Aspect: Compliance...... 162/299 Environmental Law Non−compliance GRI EN28...... 162/299 Aspect: Transport...... 163/299 Transport Impact GRI EN29...... 163/299 Aspect: Overall...... 164/299 Environmental Protection Expenditures GRI EN30...... 164/299 Environmental Responsibility...... 165/299 EMS...... 167/299 EMS Certification...... 169/299 Overall Monitoring...... 170/299 Environmental Training...... 171/299 Eco−Efficiency Rate...... 172/299 Environmental Report...... 173/299 Labor Practices and Decent Work...... 175/299 Labor (Optional)...... 175/299 Labor (Optional)...... 175/299 Labor Practices and Decent Work: Disclosure on Management Approach...... 176/299 Vendor Policy...... 176/299 Labor Practices Disclosure on Management Approach GRI LA...... 177/299 Labor Policy...... 178/299 HSFocus...... 179/299 HSPolicy...... 180/299 Equal Opp Policy...... 181/299 Table of Contents

5. Management Approach and Performance Indicators Eliminate Discrimination...... 182/299 Diversity Management...... 183/299 Women's Diversity...... 184/299 Labor Practices and Decent Work Performance Indicators...... 185/299 Aspect: Employment...... 185/299 Total Workforce GRI LA1...... 185/299 Turnover Rates...... 186/299 Employee Turnover GRI LA2...... 187/299 Stock Option Statistics...... 189/299 Cash Profit Sharing...... 190/299 Pension Plan...... 191/299 Work/Life Balance...... 192/299 Employee Benefits GRI LA3...... 194/299 Employee Satisfaction...... 195/299 Aspect: Labor/Management Relations...... 196/299 Union Representation...... 196/299 Collective Bargaining Coverage GRI LA4...... 197/299 Strikes/Unions...... 198/299 Notice Operational Changes GRI LA5...... 199/299 Labor Participation...... 200/299 Employee Involvement...... 201/299 Unfair Labor...... 202/299 Aspect: Occupational Health and Safety...... 203/299 HSReporting...... 203/299 HSTargets...... 204/299 OSHA Participation...... 205/299 HSAwards...... 206/299 Health &Safety Committees GRI LA6...... 207/299 Injury Fatality Rates GRI LA7...... 208/299 Disease Education Programs GRI LA8...... 210/299 HSViolations...... 211/299 Trade Union Health &Safety GRI LA9...... 212/299 Aspect: Training and Education...... 213/299 Training Information...... 213/299 Average Hours Training GRI LA10...... 214/299 Skills Management Program GRI LA11...... 215/299 Formal Review GRI LA12...... 216/299 Aspect: Diversity and Equal Opportunity...... 217/299 EEO−1 Report...... 217/299 Minority Diversity...... 218/299 Disabled Diversity...... 219/299 Diversity Partnershp...... 220/299 Same Sex Benefits...... 221/299 Diversity Purchasing...... 222/299 Purchasing Tracking...... 223/299 EEO/Disc Class Action...... 224/299 Diversity Awards...... 225/299 Management Diversity...... 226/299 Diversity Indicators GRI LA13...... 227/299 Female to Male Salary Ratio GRI LA14...... 228/299 Table of Contents

5. Management Approach and Performance Indicators Human Rights...... 229/299 Human Rights (Optional)...... 229/299 Human Rights (Optional)...... 229/299 Human Rights: Disclosure on Management Approach...... 230/299 Human Rights Disclosure on Management Approach GRI HR...... 230/299 Human Rights Policy...... 231/299 Human Rights Policy Issues...... 232/299 Human Rights (EIRIS)...... 233/299 Human Rights Management...... 234/299 Human Rights Initiatives...... 235/299 Supply Chain Human Rights Policy...... 236/299 Child Labor Policy...... 238/299 Forced Labor Policy...... 239/299 Community Policy...... 240/299 Community Affairs Dept...... 241/299 Community Activities...... 242/299 Volunteerism...... 243/299 Human Rights Performance Indicators...... 244/299 Aspect: Investment and Procurement Practices...... 244/299 Agreements w/ Human Rights Clauses GRI HR1...... 244/299 Poor HumRghts Rcrd...... 245/299 Human Rights Compliance...... 246/299 Compliance Frequency...... 247/299 Compliance Issues...... 248/299 Supplier Screening GRI HR2...... 249/299 Human Rights Training Time GRI HR3...... 250/299 Aspect: Non−Discrimination...... 251/299 Discrimination Incidents GRI HR4...... 251/299 Aspect: Freedom of Association and Collective Bargaining...... 252/299 Collective Bargaining Risk GRI HR5...... 252/299 Aspect: Child Labor...... 253/299 Child Labor Risk GRI HR6...... 253/299 Aspect: Forced and Compulsory Labor...... 254/299 Forced Labor Risk GRI HR7...... 254/299 Aspect: Security Practices...... 255/299 Security Training GRI HR8...... 255/299 Aspect: Indigenous Rights...... 256/299 Indigenous People Violations GRI HR9...... 256/299 Society...... 257/299 Society (Optional)...... 257/299 Society (Optional)...... 257/299 Society: Disclosure on Management Approach...... 258/299 Ethical Management...... 258/299 Ethical Monitoring...... 259/299 Community Programs...... 261/299 Society Disclosure on Management Approach GRI SO...... 262/299 Anti−Bribery Measures...... 263/299 Donations−Political...... 265/299 Society Performance Indicators...... 266/299 Aspect: Community...... 266/299 Table of Contents

5. Management Approach and Performance Indicators Impacts On Community GRI SO1...... 266/299 Aspect: Corruption...... 267/299 Corruption Risk GRI SO2...... 267/299 Anti−Corruption Training GRI SO3...... 268/299 Bribery Risk Countries...... 269/299 Government Contracts...... 270/299 Insider Trading...... 271/299 Corruption Response GRI SO4...... 272/299 Aspect: Public Policy...... 273/299 Public Policy Position GRI SO5...... 273/299 Political Contribution GRI SO6...... 276/299 Lobbying Expenses...... 277/299 Trade Associations...... 278/299 Aspect: Anti−Competitive Behavior...... 279/299 Fraud Litigation...... 279/299 Monopoly Litigation GRI SO7...... 280/299 Aspect: Compliance...... 281/299 Tax Disputes...... 281/299 Non−Compliance w/ Law Fines GRI SO8...... 282/299 Product Responsibility...... 283/299 Product (Optional)...... 283/299 Product (Optional)...... 283/299 Product Responsibility: Disclosure on Management Approach...... 284/299 Product Stewardship...... 284/299 Product Responsibility Disclosure on Mgmt. Approach GRI PR...... 285/299 Satisfaction/Customer...... 286/299 Quality Management...... 287/299 Customer Feedback...... 288/299 Product Responsibility Performance Indicators...... 289/299 Aspect: Customer Health and Safety...... 289/299 Bioengineering...... 289/299 Product Safety Assess GRI PR1...... 290/299 Product Health &Safety Non−compliance GRI PR2...... 291/299 HSProduct Recalls...... 292/299 Aspect: Product and Service Labeling...... 293/299 Product Information Labeling GRI PR3...... 293/299 Labeling Non−compliance GRI PR4...... 294/299 Customer Satisfaction GRI PR5...... 295/299 Aspect: Marketing Communications...... 296/299 Marketing Law Programs GRI PR6...... 296/299 Marketing Non−compliance GRI PR7...... 297/299 Aspect: Customer Privacy...... 298/299 Customer Privacy Breach GRI PR8...... 298/299 Aspect: Compliance...... 299/299 Total Non−compliance Fines GRI PR9...... 299/299 1. Strategy and Analysis CEO Statement GRI 1.1

1. Strategy and Analysis / CEO Statement GRI 1.1 Statement from the most senior decision−maker of the organization (e.g., CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy. Microsoft is committed to being a responsible industry partner, working with businesses, communities, and governments to help advance social and economic well−being and to enable people around the world to realize their full potential. Over the past three decades, we have expanded our business from the United States into more than 104 other countries, and we now employ nearly 91,259 people globally. While Microsoft, by many measures, could be considered the world's most successful software company, it is also a local company and a neighbor in every country and community where Microsoft employees live, work, and do business.

As a successful global corporation, we have a responsibility to use our resources and influence to make a positive impact on the world and its people. At Microsoft, our passion to do well is matched by our desire to do good. We believe the best way to achieve those parallel goals is to align our business and global citizenship strategies. To achieve that goal, we consulted with our employees, and with people in government and industry from many parts of the world, because we wanted to create a citizenship framework that would both reflect and enhance the other aspects of our business.

At Microsoft, our Global Citizenship Initiative is organized around three pillars, or strategic concepts, which form the foundation of our citizenship activities worldwide:

• Demonstrating Responsible Business Practices: Ensure integrity and transparency in all of our business practices, with emphasis on strong governance, legal and antitrust compliance, support for industry standards, respect for intellectual property, interoperability of our products, and commitment to openness in our technology practices.

• Improving Security and Internet Safety: Address the societal challenges of information and communications technology (ICT)—such as security, privacy, children's online safety, and spam—through investments in security technology; partnering with industry, governments, and law enforcement to combat cyber crime; and broadly distributing information to help customers make their systems more secure.

• Advancing the Knowledge Economy: Partner with governments and communities around the world to help strengthen local economies—through digital inclusion initiatives, innovation, and programs that stimulate growth of the local technology industry—while contributing to the vitality of the global economy through ongoing technology innovation that leads to job creation and overall economic growth.

Each of these pillars is fundamental to our business. We organize our Global Citizenship Initiative this way to help ensure our business strategies fully support our commitment to corporate governance, business ethics, and global citizenship.

Supporting Documentation: Citizenship − Global Citizenship at Microsoft Page #: View Citizenship − Global Citizenship Initiative Organization Page #: View

Generated from OneReport 1/299 Microsoft Corporation Key Impacts, Risks, Opportunities GRI 1.2

1. Strategy and Analysis / Key Impacts, Risks, Opportunities GRI 1.2 Description of key impacts, risks, and opportunities.

Generated from OneReport 2/299 Microsoft Corporation Main Issues

1. Strategy and Analysis / Main Issues What are the main social and environmental issues for your company/industry? How do you plan to meet these challenges? Companies often report frustration with the exceptionally short time−frames of financial analysts. If you could recommend one or a few social or environmental issues you would like those analysts to consider as relevant, over a longer timeframe of 5−10 years for your company/industry, what would they be? Please answer the above questions below, and upload relevant documents. As an industry leader and the world's largest software company, Microsoft has a responsibility to act as a good corporate citizen all around the world. Whether it is complying with local laws and regulations, demonstrating ethical business standards, mitigating risks to the environment, or protecting human rights, Microsoft is committed to being a global leader in corporate social responsibility.

Corporate citizenship is also core to the Microsoft business strategy and the way that we interact with customers, partners, governments, and employees. It is a way of doing business that recognizes the effect that Microsoft has on society and the effect that society has on our business.

The Microsoft corporate citizenship mission is simple: to serve the public good through innovative technologies and partnerships and to deliver on our business responsibilities of growth and value to our customers, shareholders, and employees. This mission not only guides our work as a corporate citizen, but also provides a framework through which our business addresses new markets, technologies, and business models.

Unlimited Potential

Thirty years ago, Microsoft began with a dream of a computer on every desk and in every home. Today, for the more than 1 billion people we’ve reached, life has changed profoundly. Information is available instantaneously. Personal and professional connections are made easily. Products and services are sold conveniently. Progress is achieved more readily. But for more than 5 billion people, the opportunity to learn, connect, create, and succeed remains elusive.

Several barriers stand in the way of effectively reaching these underserved communities, including environmental or infrastructural obstacles, localization issues, the need for personalized solutions, and the prohibitive cost of technology.

To better serve these people, Microsoft Unlimited Potential combines advanced technologies and strong partnerships with governments, international organizations, nongovernmental organizations (NGOs), educational institutions, and technology and service partners. Ultimately our mission is to enable sustained social and economic opportunity for those at the middle and bottom of the world’s economic pyramid—the next 5 billion people.

In the short term, Unlimited Potential aims to reach the next 1 billion people by 2015 by exploring solutions in three key interrelated areas. Each is crucial to developing sustained economic opportunity:

Transforming education Fostering local innovation Enabling jobs and opportunities

In these three areas, Microsoft Unlimited Potential can create the greatest possible impact in building a virtuous cycle of sustained social and economic development. This cycle drives communities; helps build connections to form new communities; is fueled by local and global partnerships; and, most importantly, ultimately becomes locally sustainable. Sustainability is a key indicator of effective programs and activities, and is our long−term measure of success.

Environmental Sustainability

In addition, Microsoft actively strives to be a good steward for the environment by adhering to sound environmental principles and business practices. Microsoft also partners with respected organizations to drive environmental sustainability in computing and supports extensive internal and external research. Research supported by Microsoft is reducing the carbon footprint of the computing industry through software innovation and realizing the potential of software to address larger global environmental issues.

We truly honor our position as an industry leader, a global citizen, and an active partner to thousands of governments, businesses, and community organizations around the world. We bring the same spirit of innovation to global citizenship that we have always applied to our business. Our success has given us the opportunity—and the responsibility—to use our resources and influence to help make the world a better place for all who inhabit it.

Generated from OneReport 3/299 Microsoft Corporation 2. Organizational Profile Name GRI 2.1

2. Organizational Profile / Name GRI 2.1 Name of the organization. Microsoft Corporation

Generated from OneReport 4/299 Microsoft Corporation Primary Brands, Services GRI 2.2

2. Organizational Profile / Primary Brands, Services GRI 2.2 Primary brands, products, and/or services. Primary brand, product, or Percent of total revenues Nature of company's role in providing this product or Degree of service (%) service outsourcing (%)

No Data Provided because: Other

Supporting Documentation: Microsoft − Annual Report Page #: View Microsoft − SEC filings Page #: View

Additional Comments We generate revenue by developing, manufacturing, licensing, and supporting a wide range of software products for many computing devices. Our software products include operating systems for servers, personal computers (PCs), and intelligent devices; server applications for distributed computing environments; information worker productivity applications; business solutions; and software development tools. We provide consulting and product support services, and we train and certify system integrators and developers. We sell the Xbox video game console and games, PC games, and peripherals. Online communication services and information services are delivered through our MSN portals and channels around the world.

We also research and develop advanced technologies for future software products. Delivering breakthrough innovation and high−value solutions through our integrated platform is the key to meeting customer needs and to our future growth.

Detailed information on Microsoft's revenue by product segment can be found within the Annual Report. Additional information and about Microsoft products and technologies can be found within the Annual 10−K Report available under the SEC filings portion of the company Web site.

Generated from OneReport 5/299 Microsoft Corporation Screens−General

2. Organizational Profile / Screens−General Please provide the information requested below regarding Microsoft Corporation's involvement with a certain range of products and/or services. Type of Company names % of % of % of Company involvement and ownership revenues revenues revenues contact for interest (%) 2007 2006 2005 further info

Tobacco production None 0 0 0

Tobacco distribution None 0 0 0

Tobacco retail None 0 0 0

Alcohol production None 0 0 0

Alcohol distribution None 0 0 0

Alcohol retail None 0 0 0

Pornography/adult None 0 0 0 entertainment

Gambling/gaming operations None 0 0 0

Firearms/ammunition None 0 0 0 (civilian use) production

Firearms/ammunition None 0 0 0 (civilian use) retail

U.S. DOD contracts U.S. DOD is a C17 customer

Other military contracts for U.S. DOD is a 0 0 0 armaments, supplies, or customer security forces

Contracts or subcontracts for U.S. DOD is a 0 0 0 weapons or weapons systems customer

Nuclear weapons None 0 0 0

Subcontracts with defense Defense C21 subcontractors subcontractors may be customers.

Design of nuclear plants None 0 0 0

Production of components None 0 0 0 for nuclear power

Nuclear power generation None 0 0 0

Generated from OneReport 6/299 Microsoft Corporation Mining or enrichment of None 0 0 uranium

Contraceptive products None 0 0

Abortifacients None 0 0

Genetically modified None 0 0 organisms or genetic engineering C17 Microsoft Corporation reports its revenue by product segment in its Annual Report. Due to the global nature of its business and clients Microsoft Corporation does not provide information concerning sales or revenue by geographic region. Information on US and International revenue is available in the Notes to the Financial Statements section of the Annual Report. C21 Microsoft Corporation reports its revenue by product segment in its Annual Report. Due to the global nature of its business and clients Microsoft Corporation does not provide information concerning sales or revenue by geographic region. Information on US and International revenue is available in the Notes to the Financial Statements section of the Annual Report.

Generated from OneReport 7/299 Microsoft Corporation Screens−Animals

2. Organizational Profile / Screens−Animals Please provide the information requested below regarding Microsoft Corporation's (including subsidiaries and affiliates) involvement with animals. Please upload relevant policies and documentation describing such operations. Type of involvement % of revenue 2007 % of revenue 2006 % of revenue 2005

Factory farming (raising animals for slaughter)

Animal slaughter and processing

Purchase of animal meat

Purchase of other animal products

Sale of pork or pork products

Fur production

Fur retail

Leather retail

Animals or animal products for genetic engineering Animals or animal products for research Animals or animal products for xenotransplantation

Selling animals as pets

Keeping live animals for entertainment

No Data Provided because: Not Applicable

Generated from OneReport 8/299 Microsoft Corporation Involvement (EIRIS)

2. Organizational Profile / Involvement (EIRIS) Please indicate below any of the industries/activities from which Microsoft Corporation derives more than 15% of its annual revenue. Provide brief details for any boxes checked in Additional Comments. Oil and gas producers Oil equipment, services and distribution

Mining

Construction and materials

Electricity Gas, water, and multi−utilities

Tropical forest clearing for purposes such as mining, plantation development, or construction

Real estate (not real estate investment trusts)

Travel and leisure (not airlines)

Mobile telecommunications services Fixed−line telecommunications services

Electronic and electrical equipment

Software and computer services (not Internet, software) Technology, hardware and equipment (not electronic office equipment, semiconductors)

Pharmaceuticals and biotechnology

Industrial metals

Chemicals

Support services (not business training and employment agencies, financial administration)

Household goods (not durable or nondurable household products, furnishings)

General industrials

Industrial engineering (notcommercial vehicles and trucks)

Aerospace and defense

Supporting Documentation: Microsoft − Annual Report Page #: View

Additional Comments Microsoft does not report revenue by industry segment. For additional information regarding operations and revenue for fiscal year 2008, please see the 2008 Annual Report per the link referenced above.

Generated from OneReport 9/299 Microsoft Corporation Renewable Energy Dev

2. Organizational Profile / Renewable Energy Dev Please provide the details requested below regarding Microsoft Corporation's development or use of renewable energy (excluding purchase of renewable energy), e.g. provision of renewable energy; supply/manufacture of components; RD use of renewable energy in developments, etc. Please also provide information regarding the types of renewable energy and details of involvement. Types of renewable energy Details of involvement

Solar energy Microsoft's SIlicon Valley campus generates 480 kilowatts of power from 2,228 solar panels on its roof.

Wind energy OUr new data center in San Antonio, Texas includes significant use of wind energy.

Biomass energy

Geothermal energy

Hydrogen and fuel cells

Hydroelectric power For this reporting year, 23.3% of our total electricity purchased came from hydroelectricity.

Wave energy

Other

Revenue/Investment in renewable Absolute value % of company Details energy total

Revenue

Profits

Capital investment

Generated from OneReport 10/299 Microsoft Corporation Electricity Fossil

2. Organizational Profile / Electricity Fossil Please provide information below about Microsoft Corporation's provision of electricity.

Please check Guidance Notes. Company generates electricity from fossil fuels % of 0 Details: company revenue:

Company derives revenue from extracting, refining, or distributing fossil fuels (coal, oil, or gas, including % of 0 Details: liquified petroleum gas (LPG)) company revenue:

Company derives revenue from one or more of the following industries: brick and tile manufacturers, % of 0 ceramics manufacturers, ready mixed concrete and aggregates, concrete producers, pre−cast concrete company manufacturers, glass industry, mining and quarrying, industrial chemical manufacturers, forging industry, revenue: iron founders, steel producers, paper and board manufacturers

Generated from OneReport 11/299 Microsoft Corporation Screens−Environment

2. Organizational Profile / Screens−Environment Please provide the information requested below regarding Microsoft Corporation's involvement with a certain range of products and/or services. Type of % of revenue 2007 % of revenue 2006 % of revenue 2005 involvement

Mining Not Applicable

Timber extraction and Not Applicable sourcing

Persistent organic Not Applicable pollutants (POPs)

Pesticides Not Applicable Pesticide product names and Pesticide product names and Pesticide product descriptions descriptions names and descriptions

Fertilizers Not Applicable Fertilizer product names and Fertilizer product names and Fertilizer product descriptions descriptions names and descriptions

Ozone−depleting Not Applicable Ozone−depleting chemical Ozone−depleting chemical Ozone−depleting chemicals product names and descriptions product names and descriptions chemical product names and descriptions

Generated from OneReport 12/299 Microsoft Corporation Biological Fuels

2. Organizational Profile / Biological Fuels Is Microsoft Corporation involved in the development or use of biological/alternative fuels (e.g. ethanol (alcohol based), biodiesal (made of animal and vegetable fats)? Please provide details requested below, and upload supporting documentation. Absolute value % of company total Details

Volume produced/used

Revenue

Capital investment

Additional Comments Microsoft provides grease from its on−campus cafeterias in Puget Sound as feedstock to a local biodiesel refiner.

Generated from OneReport 13/299 Microsoft Corporation Operational Structure GRI 2.3

2. Organizational Profile / Operational Structure GRI 2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures. Microsoft does business almost everywhere in the world. We have offices in more than 104 countries. We have operational centers in Dublin, Ireland; Humacao, Puerto Rico; Reno, Nevada, USA; and Singapore. The operational centers are responsible for licensing, manufacturing, and operations and logistics, although not every center performs all of these functions.

Supporting Documentation: Microsoft − Annual Report Page #: View Microsoft − SEC filings Page #: View

Additional Comments More information on the operational structure of Microsoft Corporation can be found within the Annual Report and the Annual 10−K Report available under the SEC filings portion of the company Web site.

Generated from OneReport 14/299 Microsoft Corporation Headquarters GRI 2.4

2. Organizational Profile / Headquarters GRI 2.4 Location of the organization's headquarters. Microsoft Corporation One Microsoft Way Redmond, WA 98052−7329 USA

Generated from OneReport 15/299 Microsoft Corporation Countries/Operation

2. Organizational Profile / Countries/Operation Please give details where Microsoft Corporation has a 20%+ stake (5% for oil, gas and mining companies) in a subsidiary that is incorporated in any of the listed countries. Please provide as much information as possible. Azerbaijan % No. of Revenue Assets (specify stake Employees (specify currency) currency)

Afghanistan

Algeria

Angola

Azerbaijan

Belarus

Burma (Myanmar)

Burundi

Cameroon

Chad

PR China (excluding Hong Kong)

Colombia

DR Congo (Zaire)

Cote d'Ivoire

Cuba

Egypt

Eritrea

Ethiopa

Equatorial Guinea

Haiti

Iran

Iraq

Kazakhstan

Laos

North Korea

Lebanon

Libya

Generated from OneReport 16/299 Microsoft Corporation Nepal

Nigeria

Pakistan

Russia

Rwanda

Saudi Arabia

Somalia

Sudan

Swaziland

Syria

Togo

Turkmenistan

Uganda

Uzbekistan

Vietnam

Zimbabwe

Does the company's combined presence in the countries listed Yes above involve employing more than 1000 employees or assets or annual revenue greater than $175 million?

Consultation with local, independent, non−employee stakeholders Yes in at least one of the countries above

Generated from OneReport 17/299 Microsoft Corporation Countries Subsidiaries

2. Organizational Profile / Countries Subsidiaries Please list all the countries in which Microsoft Corporation owns at least a 20% voting or equity stake in a subsidiary, associate, or joint venture incorporated in that country. Afghanistan (AFGN) Albania (AL01) Algeria (LV) Argentina (AR) Armenia (B5AR) Australia (AU) Austria (AT) Azerbaijan (B411) Bahrain (MV) Baltics (BA) Bangladesh (P0) Belarus (BY01) Belgium (BE) Bolivia (BO) Bosnia and Herzegovina (BH01) Brazil (BR) Brunei (SEA3) Bulgaria (BG) Canada Caribbean (MC) Chile (CL) China (CN) Colombia (CO) Costa Rica (CR) Croatia (HR) Cyprus (ND) Czech Republic (U6) Denmark (DK) Dominican Republic (D2) East Africa (EA) Ecuador (EC) Egypt (EG) El Salvador (EL) Estonia (TX) Finland (FI) France (FR) Georgia (GE01) Germany (GM) Greece (GR) Guatemala (GT) Haifa (HA) Honduras (HD) Hong Kong (HK) Hungary (8J) Iceland (AB) India SC (IN) Indian Ocean Islands (IO) Indonesia (ID) Iraq (MG01) Ireland (KZ) Israel (IL) Italy (IT) Japan (JP) Jordan (NK) Kazakhstan (E0) Korea (KO) Kuwait (X8) Latin America HQ (RL) Latvia (V0) Latvia_USD (WO) Lebanon (X9) Libya (K701)

Generated from OneReport 18/299 Microsoft Corporation Lithuania (TI) Lithuania_USD (WR) Luxembourg (Q8) Macedonia (FYROM) (KG) Malaysia (MY) Malta (OE) Mexico (MX) Moldova (RO) Montenegro (MTNG) Morocco (MA) NA,EM & P CENTRAL (NEPC) Namibia (ZL) Netherlands (NL) New Zealand (NZ) Nigeria (NI) Norway (NO) Oman (MU) Pakistan (LW) Panama (PA) Paraguay (MP) Peru (PE) Philippines (PH) Poland (PO) Portugal (PT) Puerto Rico (PM) Qatar (N7) Romania (E5RO) Russia (RU) Saudi Arabia (SA) Serbia & Montenegro (YUM) (5H) Serbia (SM01) Singapore (SG) Slovakia (UO) Slovenia (TZ) Slovenia_SIT (SV) South Africa (ZA) South Cone (RX) Spain (ES) Sri Lanka (OZ) Sweden (SE) Switzerland (CH) Taiwan (TW) Thailand (TH) Trinidad & Tobago (H5TT) Tunisia (TU) Turkey (TR) Ukraine (D0) United Arab Emirates (OM) United Kingdom (UK) United States Uruguay (UY) Venezuela (VE) Vermeer (VR) Vietnam (VN) West and Central Africa (WA) Zimbabwe (SS)

Generated from OneReport 19/299 Microsoft Corporation Countries of Operation GRI 2.5

2. Organizational Profile / Countries of Operation GRI 2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. Afghanistan (AFGN) Albania (AL01) Algeria (LV) Argentina (AR) Armenia (B5AR) Australia (AU) Austria (AT) Azerbaijan (B411) Bahrain (MV) Baltics (BA) Bangladesh (P0) Belarus (BY01) Belgium (BE) Bolivia (BO) Bosnia and Herzegovina (BH01) Brazil (BR) Brunei (SEA3) Bulgaria (BG) Canada Caribbean (MC) Chile (CL) China (CN) Colombia (CO) Costa Rica (CR) Croatia (HR) Cyprus (ND) Czech Republic (U6) Denmark (DK) Dominican Republic (D2) East Africa (EA) Ecuador (EC) Egypt (EG) El Salvador (EL) Estonia (TX) Finland (FI) France (FR) Georgia (GE01) Germany (GM) Greece (GR) Guatemala (GT) Haifa (HA) Honduras (HD) Hong Kong (HK) Hungary (8J) Iceland (AB) India SC (IN) Indian Ocean Islands (IO) Indonesia (ID) Iraq (MG01) Ireland (KZ) Israel (IL) Italy (IT) Japan (JP) Jordan (NK) Kazakhstan (E0) Korea (KO) Kuwait (X8) Latin America HQ (RL) Latvia (V0) Latvia_USD (WO) Lebanon (X9) Libya (K701)

Generated from OneReport 20/299 Microsoft Corporation Lithuania (TI) Lithuania_USD (WR) Luxembourg (Q8) Macedonia (FYROM) (KG) Malaysia (MY) Malta (OE) Mexico (MX) Moldova (RO) Montenegro (MTNG) Morocco (MA) NA,EM & P CENTRAL (NEPC) Namibia (ZL) Netherlands (NL) New Zealand (NZ) Nigeria (NI) Norway (NO) Oman (MU) Pakistan (LW) Panama (PA) Paraguay (MP) Peru (PE) Philippines (PH) Poland (PO) Portugal (PT) Puerto Rico (PM) Qatar (N7) Romania (E5RO) Russia (RU) Saudi Arabia (SA) Serbia & Montenegro (YUM) (5H) Serbia (SM01) Singapore (SG) Slovakia (UO) Slovenia (TZ) Slovenia_SIT (SV) South Africa (ZA) South Cone (RX) Spain (ES) Sri Lanka (OZ) Sweden (SE) Switzerland (CH) Taiwan (TW) Thailand (TH) Trinidad & Tobago (H5TT) Tunisia (TU) Turkey (TR) Ukraine (D0) United Arab Emirates (OM) United Kingdom (UK) United States Uruguay (UY) Venezuela (VE) Vermeer (VR) Vietnam (VN) West and Central Africa (WA) Zimbabwe (SS)

Supporting Documentation: Microsoft − Worldwide Operations Page #: View Microsoft − Annual Report Page #: View Microsoft − SEC filings Page #: View

Additional Comments Information concerning Microsoft Corporation's worldwide locations and subsidiares can be found via the supporting documentation listed above.

Generated from OneReport 21/299 Microsoft Corporation Legal Form GRI 2.6

2. Organizational Profile / Legal Form GRI 2.6 Nature of ownership and legal form. Microsoft Corporation (MSFT) is publically traded on the Nasdaq stock exchange. Microsoft was incorporated in the state of Washington on June 25, 1981; reincorporated in the state of Delaware on September 19, 1986; and reincorporated in the state of Washington on November 1, 1993.

Supporting Documentation: Microsoft − Annual Report Page #: View

Additional Comments More detailed information on the nature of ownership of Microsoft Corporation can be found within the Annual Report.

Generated from OneReport 22/299 Microsoft Corporation Markets Served GRI 2.7

2. Organizational Profile / Markets Served GRI 2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries). Microsoft Corporation is the worldwide leader in software, services and solutions that help people and businesses realize their full potential. Microsoft does business almost everywhere in the world. As of June 30, 2008 we had offices in more than 104 countries.

Supporting Documentation: Microsoft − Annual Report Page #: View Microsoft − SEC filings Page #: View

Additional Comments Information on the types of products and services offered by Microsoft and on the specific locations of Microsoft's operations is available in the Annual Report and Annual 10−K Report.

Generated from OneReport 23/299 Microsoft Corporation Scale of Organization GRI 2.8

2. Organizational Profile / Scale of Organization GRI 2.8 Scale of reporting organization, including: − Number of employees; − Net sales (for private sector organizations) or net revenues (for public sector organizations); − Total capitalization broken down in terms of debt and equity (for private sector organizations); and − Quantity of products or services provided. As of June 30, 2008, Microsoft employed 91,259 people worldwide.

Detailed information regarding sales, revenues, products and services for the reporting period may be found within the Annual Report and the Annual 10−K Report available under the SEC filings portion of the company web site.

Supporting Documentation: Microsoft − Annual Report Page #: View Microsoft − SEC filings Page #: View

Generated from OneReport 24/299 Microsoft Corporation Significant Changes GRI 2.9

2. Organizational Profile / Significant Changes GRI 2.9 Significant changes during the reporting period regarding its size, structure, or ownership including:

− The location of, or changes in operations, including facility openings, closings, and expansions; and

− Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organizations). For information on changes to Mirosoft's business operations during the most recent fiscal year, please refer to the Annual Report. Detailed listings of the company's operation centers and subsidaries can be found on the company Web site at http://www.microsoft.com/presspass/inside_ms.mspx.

Supporting Documentation: Microsoft 2008 10K Page #: View Microsoft − PressPass Page #: View

Generated from OneReport 25/299 Microsoft Corporation Awards Received GRI 2.10

2. Organizational Profile / Awards Received GRI 2.10 Awards received in the reporting period. For a complete list of Citizenship and/or Corporate Social Responsibility awards and recognition for the Microsoft fiscal year 2008, please see the attached supporting document entitled, "FY2008 Awards and Recongnition" included below.

Supporting Documentation: FY2008 Awards and Recognition Page #: View Citizenship − Awards Received Page #: View

Generated from OneReport 26/299 Microsoft Corporation Quality Award

2. Organizational Profile / Quality Award Has Microsoft Corporation or a subsidiary received any awards for quality, or applied for the Malcolm Baldrige National Quality Award? Award Company Unit Date

BCLC 2007 Corporate Stewardship—Large Business Award Corporate Affairs 11/7/2007

(Applied for) Malcolm Baldrige Award Corporate Affairs 2007

Additional Comments For additonal information on this award and presentation, please visit: http://www.uschamber.com/bclc/resources/newsletter/0711_awards.htm

Generated from OneReport 27/299 Microsoft Corporation 3. Report Parameters Report Profile

Reporting Period GRI 3.1

3. Report Parameters / Report Profile / Reporting Period GRI 3.1 Reporting period (e.g., fiscal/calendar year) for information provided.

Start date July 1, 2007

End date June 30, 2008

Type of reporting period Fiscal year

Additional Comments Microsoft Corporation's fiscal year begins on July 1st and ends on June 30th each year.

Generated from OneReport 28/299 Microsoft Corporation Previous Report GRI 3.2

3. Report Parameters / Report Profile / Previous Report GRI 3.2 Date of most recent previous report (if any). January 3, 2008

Additional Comments

Generated from OneReport 29/299 Microsoft Corporation Reporting Cycle GRI 3.3

3. Report Parameters / Report Profile / Reporting Cycle GRI 3.3 Reporting cycle (annual, biennial, etc.). Microsoft follows an annual reporting cycle−− reporting data for each fiscal year. Each fiscal year begins July 1st and ends June 30th.

Generated from OneReport 30/299 Microsoft Corporation Contact Point GRI 3.4

3. Report Parameters / Report Profile / Contact Point GRI 3.4 Contact point for questions regarding the report or its contents. Name: Steve Lippman C1

Title:

Phone: 425−703−3127

Email: [email protected] C1 Project Manager, Legal and Corporate Affairs

Additional Comments At Microsoft, we appreciate frank and honest stakeholder feedback, both positive and negative, because it helps us improve. We invite you to offer your observations and suggestions about this report as well as Microsoft's global citizenship activities.

Generated from OneReport 31/299 Microsoft Corporation Report Scope and Boundary

Define Report Content GRI 3.5

3. Report Parameters / Report Scope and Boundary / Define Report Content GRI 3.5 Process for defining report content, including:

− Determining materiality; − Prioritizing topics within the report; and − Identifying stakeholders the organization expects to use the report. In selecting indicators to report on using the OneReport and GRI framework, Microsoft sought to provide information that is material to our key business operations, of interest to key stakeholders, and available for collection and reporting in an accurate way.

Our citizenship reporting reflects the structure of our Global Citizenship Initiative and related activities because we want our stakeholders − employees, customers, partners, shareholders, and others − to be able to compare our program goals and objectives with our results.

The online portion of this report includes references to applicable Global Report Initiative (GRI) performance indicators to assist stakeholders in their review and assessment of our Global Citizenship Initiative. (More information about the GRI performance indicators is available at http://www.globalreporting.org) The function of the GRI performance indicators is to provide information about the economic, environmental, and social impacts of organizations in a way that enhances comparability between reports and organizations. In addition, both the print and online components of the report provide key links to more detailed information on Microsoft.com, the Microsoft corporate Web site.

Reporting Period: This report focuses on Microsoft's fiscal year 2008 (which began July 1, 2007 and ended June 30, 2008). All data are for that period unless otherwise noted.

Generated from OneReport 32/299 Microsoft Corporation Boundary of Report GRI 3.6

3. Report Parameters / Report Scope and Boundary / Boundary of Report GRI 3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary Protocol for further guidance. Our citizenship reporting reflects the structure of our Global Citizenship Initiative and related activities because we want our stakeholders − employees, customers, partners, shareholders, and others − to be able to compare our program goals and objectives with our results.

Reporting Period: This report focuses on Microsoft's fiscal year 2008 (which began July 1, 2007 and ended June 30, 2008). All data are for that period unless otherwise noted.

Currency: All money figures in this report are in U.S. dollars unless otherwise noted.

Terminology: The terms Global Citizenship and Corporate Citizenship, which are used throughout this report, are interchangeable with similar terms such as Corporate Social Responsibility and Corporate Sustainability.

Joint Ventures: Joint venture company data are not included in this report.

Generated from OneReport 33/299 Microsoft Corporation Limit on Report Scope GRI 3.7

3. Report Parameters / Report Scope and Boundary / Limit on Report Scope GRI 3.7 State any specific limitations on the scope or boundary of the report. none

Generated from OneReport 34/299 Microsoft Corporation Basis for Reporting GRI 3.8

3. Report Parameters / Report Scope and Boundary / Basis for Reporting GRI 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations. PRINCIPLES OF CONSOLIDATION The financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which we exercise significant influence but do not control and are not the primary beneficiary are accounted for using the equity method. Investments in which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method.

For Microsoft's latest reporting information on situations that can significantly affect comparability from period to period and/or between reporting organizations please refer to the company's Investor Relations Web site.

Supporting Documentation: Microsoft 2008 10K Page #: View Microsoft − Quarterly Earnings Page #: View

Generated from OneReport 35/299 Microsoft Corporation Data Measurement &Calculations GRI 3.9

3. Report Parameters / Report Scope and Boundary / Data Measurement &Calculations GRI 3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Microsoft Corporation has applied GRI principles and protocols in the preparation of this report where applicable to the nature of its business practices, and reporting policies.

Generated from OneReport 36/299 Microsoft Corporation Restatements GRI 3.10

3. Report Parameters / Report Scope and Boundary / Restatements GRI 3.10 Explanation of the effect of any restatements of information provided in earlier reports, and the reasons for such restatement (e.g., mergers/acquisitions, change of base years/periods, nature of business measurement methods).

Generated from OneReport 37/299 Microsoft Corporation Changes from Previous GRI 3.11

3. Report Parameters / Report Scope and Boundary / Changes from Previous GRI 3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report. There are no significant changes from previous years in the measurement methods applied to key economic, environmental, and social information.

Generated from OneReport 38/299 Microsoft Corporation GRI Content Index GRI 3.12

3. Report Parameters / Report Scope and Boundary / GRI Content Index GRI 3.12 Table identifying the location of the Standard Disclosures in the report.

Generated from OneReport 39/299 Microsoft Corporation Assurance

Assurances Practices GRI 3.13

3. Report Parameters / Assurance / Assurances Practices GRI 3.13 Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s). At Microsoft, individuals and groups responsible for citizenship activities participate in a formalized strategic planning and evaluation process collecting data on social outcomes as well as business impact in specific areas. Materials published in either the print or online version of the Citizenship Report go through an extensive internal review and approval process to assure accuracy, completeness and reliability of information included in the report.

Generated from OneReport 40/299 Microsoft Corporation 4. Governance, Commitments, and Engagement Governance

Structure, Committees GRI 4.1

4. Governance, Commitments, and Engagement / Governance / Structure, Committees GRI 4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight. Governance Structure: One−Tier Two−Tier System (board System of directors) (supervisory board)

Two−Tier System

Supervisory Board Non−executive 1 Independent 8 Employee 1 directors (excl. directors: representatives (if independent not applicable, directors): please leave the field empty):

Management Number of senior Board/Executive executives: Management

Combined total of board 10 members (both boards):

One−Tier or Two−Tier System

Committee Function Name of Committee Formal Board Number of Executives Number of Number of Responsibility? Non−Executives connected NEDs

Audit/Accounting Audit Committee 0 3 0

Strategy C11

Remuneration/ Compensation 0 3 0 Compensation Committee

Nomination Governance & 0 2 0 Nominating Committee

Worldwide Labor Policies and Practices

Human Rights Issues

Diversity and Employment Equity

Supply Chain Social Responsibility

Generated from OneReport 41/299 Microsoft Corporation Corp. Social Responsibility, Corp. Citizenship, Sustainable Development

Health and Safety

Environmental Issues

Risk Management

Ethics Issues

Political Involvement

Customer Service and Quality

Community and Public Relations

Charitable Giving

Other Finance Finance Committee 0 4 0

Other Antitrust Antitrust 0 3 0 Compliance Compliance Committee

Other

Other C11 For the entire listing of Microsoft Corporation's Executive Officers please see the Annual Report.

Supporting Documentation: Microsoft − Board of Directors Page #: View Microsoft − Senior Leadership Team Page #: View Microsoft Board Committees Page #: View Microsoft − Proxy Statement on Microsoft.com Page #: View

Generated from OneReport 42/299 Microsoft Corporation Governance Compliance

4. Governance, Commitments, and Engagement / Governance / Governance Compliance Does Microsoft Corporation comply with the relevant corporate governance code in the country of listing? Yes, in full Please specify:

Yes, but not in full Please specify:

Supporting Documentation: Microsoft − 2008 Proxy Statement Page #: View

Generated from OneReport 43/299 Microsoft Corporation Indep Committees

4. Governance, Commitments, and Engagement / Governance / Indep Committees Does Microsoft Corporation have different Board Committees independent of Executive Managers? (e.g. Remuneration Committee, Audit Committee, Nomination Committee). If yes, please upload any documents describing this independence, and fill out the table below describing the proportion of each committee that is independent. Independent? Proportion of Independence

Remuneration Committee yes 100% independent

Audit Committee yes 100% independent

Nomination Committee yes 100% independent

Other: yes

Supporting Documentation: Microsoft Board Committees Page #: View Microsoft − 2008 Proxy Statement Page #: View

Generated from OneReport 44/299 Microsoft Corporation Director Relationships

4. Governance, Commitments, and Engagement / Governance / Director Relationships Please provide information below about Microsoft Corporation's board directors who are considered independent. Name of Family Current Employee Executive Former Business Executive Major Receives Ten Board relationship employee? representative? of a employee? relationship? director shareholder or company years or Member with an subsidiary? family representative grants? more executive member who of a major on director of has a shareholder board? the business (3% or more company? relationship? equity)?

Dr. Cash yes yes yes yes yes yes yes yes yes yes

Mr. yes yes yes yes yes yes yes yes yes yes Gilmartin

Mr. yes yes yes yes yes yes yes yes yes yes Hastings

Mr. yes yes yes yes yes yes yes yes yes yes Marquardt

Mr. Noski yes yes yes yes yes yes yes yes yes yes

Dr. Panke yes yes yes yes yes yes yes yes yes yes

Mr. yes yes yes yes yes yes yes yes yes yes Shirley

Ms. yes yes yes yes yes yes yes yes yes yes Dublon

yes yes yes yes yes yes yes yes yes yes

Supporting Documentation: Microsoft − Board of Directors Page #: View Microsoft − 2007 Proxy Statement Page #: View

Generated from OneReport 45/299 Microsoft Corporation Chair/CEO Separation GRI 4.2

4. Governance, Commitments, and Engagement / Governance / Chair/CEO Separation GRI 4.2 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization's management and the reasons for this arrangement). Roles of Chairman and Chief Executive (or their Please indicate when this approach was adopted: equivalents) are separate

Chairman is non−executive and independent Please indicate when this approach was adopted:

Role of CEO and Chairman is split and former If role of CEO and Chairman is Mr. Gates/ CEO−Chairman is now Chairman split and former CEO−Chairman is Chairman/ Mr. now Chairman, and an independent Gilmartin/ Lead lead director is appointed, please Independent indicate name: Director

Role of Chairman and CEO is joint If role of Chairman and CEO is joint, and an independent lead director is appointed, please indicate name:

Chairman is an executive director

Supporting Documentation: Microsoft − Board of Directors Page #: View Microsoft − Corporate Governance Guidelines Page #: View Microsoft − 2007 Proxy Statement Page #: View

Generated from OneReport 46/299 Microsoft Corporation Board Members GRI 4.3

4. Governance, Commitments, and Engagement / Governance / Board Members GRI 4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non−executive members. Number of Board members

Board members with executive functions 1

Non−executive directors (excluding Independent directors) 1

Independent non−executive directors on the Board 8

Total board 10

Supporting Documentation: Microsoft − Corporate Governance at Microsoft Corporation Page #: View Microsoft − Corporate Governance Committees Page #: View Microsoft − Corporate Governance Fact Sheet Page #: View Microsoft − Board of Directors Page #: View Microsoft − 2007 Proxy Statement Page #: View

Generated from OneReport 47/299 Microsoft Corporation Communicate with Board GRI 4.4

4. Governance, Commitments, and Engagement / Governance / Communicate with Board GRI 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. An email and postal mail mechanism is an available for shareholders to provide recommendations or direction to the Board:

CONTACT THE BOARD OF DIRECTORS Microsoft shareholders who want to communicate directly with the Company's Board of Directors, any committee of the Board, or any individual director may submit their questions by:

• Sending an e−mail message to: [email protected]

• Mailing a letter to: Attn: Board of Directors Microsoft Corporation One Microsoft Way Redmond, WA 98052−6399 USA

Each communication should specify the applicable addressee or addressees to be contacted, as well as the general topic of the communication. The Company will initially receive and process communications before forwarding them to the addressee. Communications may also be referred to other departments within the Company. The Company generally will not forward to the Board any communication that it determines to be primarily commercial in nature, that relates to an improper or irrelevant topic, or that requests general information about the Company.

NOMINATION OF DIRECTORS The Governance and Nominating Committee annually reviews with the Board the applicable skills and characteristics required of Board nominees in the context of current Board composition and Company circumstances. In making its recommendations to the Board, the Governance and Nominating Committee considers, among other things, the qualifications of individual director candidates. The Committee retains any search firms and approves payment of their fees. The Governance and Nominating Committee works with the Board to determine the appropriate characteristics, skills, and experiences for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, education, and public service. Characteristics expected of all directors include independence, integrity, high personal and professional ethics, sound business judgment, and the ability and willingness to commit sufficient time to the Board. In evaluating the suitability of individual Board members, the Board takes into account many factors, including general understanding of marketing, finance, and other disciplines relevant to the success of a large publicly−traded company in today’s business environment; understanding of the Company’s business and technology; educational and professional background; personal accomplishment; and geographic, gender, age, and ethnic diversity. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the Company’s business and represent shareholder interests through the exercise of sound judgment using its diversity of experience. In determining whether to recommend a director for re−election, the Governance and Nominating Committee also considers the director’s past attendance at meetings, participation in and contributions to the activities of the Board, and the results of the most recent Board self−evaluation. The Governance and Nominating Committee will consider shareholder recommendations for candidates for the Board. The name of any recommended candidate for director, together with a brief biographical sketch, a document indicating the candidate’s willingness to serve, if elected, and evidence of the nominating shareholder’s ownership of Company stock should be sent to the attention of the Deputy General Counsel, Finance and Operations, of the Company. If a shareholder wishes to formally nominate a candidate, he or she must follow the procedures described in Section 1.12 of the Company’s Bylaws.

1.12 Advance Notice of Shareholder Proposals and Director Nominations Shareholders may nominate one or more persons for election as directors at the annual meeting of shareholders or propose business to be brought before the annual meeting of shareholders, or both, only if (i) such business is a proper matter for shareholder action under the WBCA and (ii) the shareholder has given timely notice in proper written form of such shareholder's intent to make such nomination or nominations or to propose such business.

To be timely, a shareholder's notice relating to the annual meeting shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 120 or more than 180 days prior to the first anniversary (the "Anniversary") of the date on which the Corporation first mailed its proxy materials for the preceding year's annual meeting of shareholders. However, if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the Anniversary of the preceding year's annual meeting, then notice by the shareholder to be timely must be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 15th day following the day on which public announcement of the date of such meeting is first made.

To be in proper form a shareholder's notice to the Secretary shall be in writing and shall set forth (i) the name and address of the shareholder who intends to make the nomination(s) or propose the business and, as the case may be, of the person or persons to be nominated or of the business to be proposed, (ii) a representation that the shareholder is a holder of record of stock of the Corporation, that the shareholder intends to vote such stock at such meeting and, in the case of nomination of a director or directors, intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (iii) in the case of nomination of a director or directors, a description of all arrangements or understandings between the shareholder and each nominee or any other person or persons (naming such person or persons) pursuant to which the

Generated from OneReport 48/299 Microsoft Corporation nomination or nominations are to be made by the shareholder, (iv) such other information regarding each nominee or each matter of business to be proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to Regulation 14A promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), had the nominee been nominated, or intended to be nominated, or the matter been proposed, or intended to be proposed, by the Board of Directors of the Corporation and (v) in the case of nomination of a director or directors, the consent of each nominee to serve as a director of the Corporation if so elected.

The Chairman of a meeting of shareholders may refuse to acknowledge the nomination of any person or the proposal of any business not made in compliance with the foregoing procedures. The business to be conducted at a special meeting of shareholders shall be limited to the business set forth in the notice of meeting sent by the Corporation.

Notwithstanding the foregoing provisions of this Section 1.12, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 1.12. Nothing in this Section 1.12 shall affect any rights of shareholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a−8 under the Exchange Act nor grant any shareholder a right to have any nominee included in the Corporation’s proxy statement.

Supporting Documentation: Microsoft − Contact the Board of Directors Page #: View Microsoft − Bylaws of Microsoft Corporation Page #: 1.12 View Microsoft − Corporate Governance at Microsoft Corporation Page #: View Microsoft − Corporate Governance FAQ's Page #: View Microsoft − 2007 Proxy Statement Page #: View

Generated from OneReport 49/299 Microsoft Corporation Compensation Linkage GRI 4.5

4. Governance, Commitments, and Engagement / Governance / Compensation Linkage GRI 4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization's performance (including social and environmental performance). Financial Environmental Social Corporate Governance

Senior management compensation linkage linkage linkage linkage C2

Executive compensation linkage linkage linkage linkage

Board member compensation linkage linkage linkage linkage

Please explain policies and programs related to compensation linkage and upload relevant documents: C2 See pgs. 17−19 of the 2008 proxy statement

Supporting Documentation: Microsoft − 2008 Proxy Statement Page #: See pgs. 13−29 View

Generated from OneReport 50/299 Microsoft Corporation Compensation Report

4. Governance, Commitments, and Engagement / Governance / Compensation Report Does Microsoft Corporation externally communicate or publish corporate governance information on the remuneration/compensation, including bonuses, of executives (e.g. CEO) and board of director members? Please upload any documents and/or indicate web address.

If not applicable, please indicate in the No Data section and explain in Additional Comments. Yes, for the CEO only Yes, on individual level of each board member and CEO and additional highest paid senior executives Yes, on individual level of each board member and CEO Yes, on an aggregated level for non−executive directors AND on aggregated level for executive directors Yes, on aggregated level of board/supervisory board Yes, by individually banded compensation ranges No

Supporting Documentation: Microsoft − 2008 Proxy Statement Page #: See pgs. 9−11 for the Board and 13−29 for executives View

Generated from OneReport 51/299 Microsoft Corporation Conflicts of Interest GRI 4.6

4. Governance, Commitments, and Engagement / Governance / Conflicts of Interest GRI 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We are a global software company with extensive operations in the U.S. and many foreign countries. In fiscal year 2007 we purchased over $10 billion of goods and services from third parties. We have over 79,000 employees and the authority to purchase goods and services is widely dispersed. Because of these far−reaching activities, we encounter transactions and business arrangements with businesses and other organizations in which one of our directors, executive officers, or nominees for director, or their immediate families, or a greater than 5% owner of our stock, may also be a director, executive officer, or investor, or have some other direct or indirect material interest. We will refer to these relationships generally as related−party transactions.

Related−party transactions have the potential to create actual or perceived conflicts of interest between Microsoft and its directors and executive officers or their immediate family members. The Audit Committee has established a written policy and procedures for review and approval of related−party transactions. If a related party transaction subject to review directly or indirectly involves a member of the Audit Committee (or an immediate family member or domestic partner), the remaining Committee members will conduct the review. In evaluating a related−party transaction involving a director, executive officer, or their immediate family members, the Audit Committee considered, among other factors:

• goods or services provided by or to the related party, • the nature of the transaction and the costs to be incurred by Microsoft or payments to Microsoft, • the benefits associated with the transaction and whether comparable or alternative goods or services are available to Microsoft from unrelated parties, • the business advantage Microsoft would gain by engaging in the transaction, • the significance of the transaction to Microsoft and to the related party, and • management’s determination that the transaction is in the best interests of the Company.

To receive Audit Committee approval, related party transactions must have a Microsoft business purpose and be on terms that are fair and reasonable to Microsoft, and as favorable to the Company as would be available from non−related entities in comparable transactions. The Audit Committee also requires that the transaction meets the same Company standards that apply to comparable transactions with unaffiliated entities.

Supporting Documentation: Microsoft − 2007 Proxy Statement Page #: 25 View

Generated from OneReport 52/299 Microsoft Corporation Manager Oversight

4. Governance, Commitments, and Engagement / Governance / Manager Oversight Please indicate below the most senior corporate manager responsible for implementing policies in the indicated areas. Name Position or Title Organizational Reporting Line Level from Board

Overall Responsibility for Pamela Passman Corporate Vice Reports to General Counsel Corporate Social Responsibility President and Management

Human Resources Lisa Brummel Senior Vice President Reports to Steve Ballmer, CEO

Health and Safety Lisa Brummel Senior Vice President Reports to Steve Ballmer, CEO

Diversity and Employment Equity Gwen Houston General Manager Reports to Lisa Brummel

Community and Public Relations Communit Sr. Director Community Reports to Pamela Passman, Relations − Akhtar Affairs Corporate Vice President Badsah

Customer Service and Quality Kevin Turner COO Reports to Steve Ballmer, CEO

Environmental Issues Rob Bernard General Manager, Reports to Scott Charney, Environmental Corporate Vice President Sustainabilit

Issue/Reputation Management Mich Mathews Senior Vice President Reports to Kevin Turner, COO

* Risk Management

Supply Chain Social Responsibility

Charitable Giving Akhtar Badsah Sr. Director Community Reports to Pamela Passman, Affairs Corp. Vice President

Ethics Issues Odell Guyton Chief Ethics Officer Reports to John Frank, Corporate Vice President

Training Scott Pitasky Corporate Vice Reports to Lisa Brummel, President Sr. Vice President

Human Rights Issues

Job creation and security J. Ritchie Corporate Vice Reports to Lisa Brummel, President Sr. Vice President

* Privacy Policy Implementation Scott Charney Corporate Vice Reports to Craig Mundie, President Chief Research and Technology Officer

Generated from OneReport 53/299 Microsoft Corporation Code of Ethics

4. Governance, Commitments, and Engagement / Governance / Code of Ethics Does Microsoft Corporation have its own social policy, code of ethics, or code of business conduct that sets out company values and governs the conduct of its employees, and to which segments of Microsoft Corporation's operations does the policy or code apply? Please upload a copy of the code or policy and select all that apply below. Social policy, code of ethics, or code of business conduct exists:

Yes C2 Yes, in development, to be implemented by (date) Please specify: No

Existing policy/code applies to:

All operations and/or locations C4 Domestic operations OECD countries only All employees Board only Managers only Other Please specify:

Demonstrated commitment to the code of ethics by the board of directors through:

Signing of the policy C6 Statement in the annual report Other Please specify: Endorsement The board has not demonstrated a formal commitment C2 Microsoft's Standards of Business Conduct summarize the regulatory requirements and business practices that guide our decision making and business activities. The Standards contain basic information about our policies as well as information about how to obtain guidance regarding a particular business practice or compliance concern. C4 All Microsoft employees are responsible for understanding and complying with the Standards of Business Conduct, applicable government regulations, and Microsoft's policies. C6 The Microsoft Standards of Business Conduct and the Business Conduct and Compliance Program are endorsed by formal Board of Directors Resolutions and have the full support of Microsoft’s Board of Directors and Management.

Supporting Documentation: Microsoft − Standards of Business Conduct Page #: View

Generated from OneReport 54/299 Microsoft Corporation Board Qualifications GRI 4.7

4. Governance, Commitments, and Engagement / Governance / Board Qualifications GRI 4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization's strategy on economic, environmental, and social topics. See section 3 of the Microsoft Corporation Corporate Governance Guidelines: Board Membership Criteria. The Governance and Nominating Committee works with the Board on an annual basis to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education, and public service. Characteristics expected of all directors include independence, integrity, high personal and professional ethics, sound business judgment, and the ability and willingness to commit sufficient time to the Board. In evaluating the suitability of individual Board members, the Board takes into account many factors, including general understanding of marketing, finance, and other disciplines relevant to the success of a large publicly traded company in today's business environment; understanding of the Company's business and technology; educational and professional background; personal accomplishment; and geographic, gender, age, and ethnic diversity. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the Company's business and represent shareholder interests through the exercise of sound judgment, using its diversity of experience. In determining whether to recommend a director for re−election, the Governance and Nominating Committee also considers the director's past attendance at meetings, participation in and contributions to the activities of the Board, and the results of the most recent Board self−evaluation.

Supporting Documentation: Microsoft − Corporate Governance Guidelines Page #: section 3 View

Generated from OneReport 55/299 Microsoft Corporation Economic, Environmental, Social Values GRI 4.8

4. Governance, Commitments, and Engagement / Governance / Economic, Environmental, Social Values GRI 4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation. As a global corporation with offices in more than 100 countries and regions, Microsoft is committed to responsible leadership and to accountability for the social consequences of its actions. Whether we are helping rebuild a community after a natural disaster, erecting new energy−saving buildings at our corporate facilities, or working to create a stronger framework for human rights, Microsoft demonstrates responsible leadership through policies and programs that are supported by a foundation of responsible and ethical business practices.

Please refer to the link in "Additional Info" for details regarding Microsoft's policies, principles, programs and products in reference to responsible leadership.

Supporting Documentation: Citizenship − Responsible Leadership Page #: View

Generated from OneReport 56/299 Microsoft Corporation Economic, Environmental, Social Oversight GRI 4.9

4. Governance, Commitments, and Engagement / Governance / Economic, Environmental, Social Oversight GRI 4.9 Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Governance and Nominating Committee . The principal responsibilities of the Governance and Nominating Committee includes reviewing the Company’s policies and programs that relate to matters of corporate responsibility, including public issues of significance to the Company and its stakeholders.

Supporting Documentation: Microsoft − Governance and Nominating Committee Charter Page #: See 'Role' View

Generated from OneReport 57/299 Microsoft Corporation Board Evaluation GRI 4.10

4. Governance, Commitments, and Engagement / Governance / Board Evaluation GRI 4.10 Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance. Please see section 22 of the Company's corporate governance guidelines:

22. Board and Committee Self−Evaluation. The Governance and Nominating Committee is responsible for conducting an annual evaluation of the performance of the Board and each of its members. In addition, each committee is responsible for conducting an annual performance evaluation. Evaluation results are reported to the Board. The Governance and Nominating Committee's report should generally include an assessment of the Board's compliance with the principles set forth in these guidelines, as well as identification of areas in which the Board could improve its performance. Each committee's report generally should include an assessment of the committee's compliance with the principles set forth in these guidelines, the committee's charter, and identification of areas in which the committee could improve its performance.

Please see items 1 and 12 of the Governance and Nominating Committee Charter:

1. Annually evaluate and report to the Board on the performance and effectiveness of the Board to facilitate the directors fulfilling their responsibilities in a manner that serves the interests of Microsoft Corporation shareholders.

12. Annually review the Company's policies and programs that relate to corporate responsibility.

Supporting Documentation: Microsoft − Corporate Governance Committees Page #: GovNom Charter #1 &12 View Microsoft − Corporate Governance Guidelines Page #: Item 22 View

Generated from OneReport 58/299 Microsoft Corporation Commitments to External Initiatives

Precautionary Approach GRI 4.11

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Precautionary Approach GRI 4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization. Microsoft is committed to phasing out the use of substances in its consumer hardware electronic products that pose a risk or threatened risk to human health or the environment. We try to restrict the use of such substances and that is why our starting point is the precautionary principle. The precautionary principle was defined in the UN Rio declaration as “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost−effective measures to prevent environmental degradation.” We believe acting preventatively to reach a sustainable use of natural resources and a sound environment creates better products.

Generated from OneReport 59/299 Microsoft Corporation Principles Endorsed GRI 4.12

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Principles Endorsed GRI 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. UN Global Compact, November 22, 2006 Electronic Industry Code of Conduct, November 10, 2004 UN Millenium Development Goals

Generated from OneReport 60/299 Microsoft Corporation Memberships GRI 4.13

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Memberships GRI 4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization:

− has positions in governance bodies;

− participates in projects or committees;

− provides substantive funding beyond routine membership dues;

− views membership as strategic. As a worldwide leader in software products and service Microsoft is involved in a large number of local, national and international industry and business associations globally. Some of those specific to CSR & Environment include: − Business for Social Responsibility − Business in Society − Boston College − Center for Corporate Citizenship − Net Impact − GRI − World Economic Forum: Gloabl Citizenship Initiative

Generated from OneReport 61/299 Microsoft Corporation Risk Considerations

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Risk Considerations Which statement below best describes Microsoft Corporation's board or executive level consideration of significant Social, Environmental and Ethical (SEE) risks? Please upload those risks that have been identified and/or assessed. Please indicate which statement best describes the Company's board or executive level SEE risks have not been considered by the consideration of significant SEE risks: board Risks are generally assessed, but not SEE risks specifically SEE risks have been considered, but none identified SEE risks have been identified, but not considered material SEE risks have been identified

Please indicate which statement best describes the Company's consideration of potential Liabilities and future expenditure are not liabilities and future expenditure linked to SEE challenges, risks, and opportunities: quantified Liabilities and future expenditure are quantified in a general or summary way Liabilities and future exependitures are quantified in a detailed way

Supporting Documentation: Page #: Microsoft 2008 10K View 13−18

Generated from OneReport 62/299 Microsoft Corporation Risk Management

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Risk Management Which of the following does the Microsoft Corporation's Social, Environmental and Ethical (SEE) risk management system include? Please upload any additional details. If SEE risks are considered within the company's general risk management system, please give details Microsoft considers Social, Environmental and Ethical (SEE) risk management a critical part of conducting business. As such, Microsoft has a range of policies in place for managing risk, select individuals charged with implementing various policies, as well as a Governance Committee in place to oversee ongoing tracking and management. The company's SEE risk management system and its policies are referenced throughout this report. If the company has separate corporate policies and procedures for specifically managing SEE risk, please give details: Please see the following: http://www.microsoft.com/About/CorporateCitizenship/US/SecurityPrivacy.mspx

http://www.microsoft.com/About/CorporateCitizenship/US/ResponsibleLeadership.mspx If the company conducts regular assessments of SEE risks (e.g. scale, probability), please give details: If the company conducts internal audits or external verification of SEE issues, please give details:

Supporting Documentation: Microsoft − Security and Privacy Page #: View Responsible Leadership Page #: View

Generated from OneReport 63/299 Microsoft Corporation SEE Risks

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / SEE Risks Please provide the following details concerning Microsoft Corporation's SEE (social, environmental, and ethical) challenges, risks, and opportunities. Are the details of social, environmental, and other ethical (SEE) risks included in the latest annual report? No

If the board of directors regularly reviews SEE issues, please give details. The Governance Committee of the Board of Directors receives regular updates on our Citizenship activities. The Committee's Charter includes the following: The Governance and Nominating Committee's role is to determine the slate of director nominees for election to the Company's Board of Directors, to identify and recommend candidates to fill vacancies occurring between annual shareholder meetings, to review, evaluate and recommend changes to the Company's Corporate Governance Guidelines, and to review the Company's policies and programs that relate to matters of corporate responsibility, including environmental sustainability and public issues of significance to the Company and its stakeholders.

If the board of directors receives training explicitly on SEE issues, please give details:

Generated from OneReport 64/299 Microsoft Corporation Risk Report

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Risk Report Please outline the relevance/significance and potential liabilities of the following SEE (Social, Environmental, Ethical) issues. Relevance and Estimated Liability significance Liability Details

Compliance with impending or potential laws/regulations

Product quality or product recall issues

Product−related litigation (e.g. asbestos, fatty foods)

Reputational issues linked to supply chains

Reputational issues linked to NGO/community campaigns

Reputational issues linked to human rights

Bribery/corruption issues

Occupational health and safety issues

Attraction and retention of skilled employees

Risk of major negative environmental events (such as spillages)

Impact on workforce of HIV/AIDS

Risks or opportunities from future carbon emissions restrictions (e.g. trading)

Risks or opportunities from developing sustainable products/processes

Supporting Documentation: Responsible Leadership Page #: View Microsoft − Security and Privacy Page #: View

Additional Comments Microsoft considers Social, Environmental and Ethical (SEE) risk management a critical part of conducting business. As such, Microsoft has a range of policies in place for managing risk, select individuals charged with implementing various policies, as well as a Governance Committee in place to oversee ongoing tracking and management. The company's SEE risk management system and its policies are referenced throughout this report.

Please see links above within "Supporting Documents" for additional information.

Generated from OneReport 65/299 Microsoft Corporation Quality Certification

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Quality Certification Does Microsoft Corporation have any quality certifications? Please provide the information requested below, and upload relevant information. Certification # facilities certified % certified

ISO 9000 series

Six Sigma

QS 9000

TQM

Other externally developed system:

Other internally developed system:

No Data Provided because: Not Known

Generated from OneReport 66/299 Microsoft Corporation Vendor Standards

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Vendor Standards Please supply the following information: Latest FY: Previous FY:

% of company's global suppliers meeting ISO 9000 series and/or TQM standards NA NA C2

Number of regular suppliers/contractors/vendors 35,000 35,000 C3 C2 Not available at this time. C3 Approximate number. With regards to compliance, a smaller population of 'risk targetted' suppliers is used as the basis of answers to this OneReport compliance update.

Generated from OneReport 67/299 Microsoft Corporation Human Rights Endorsements

4. Governance, Commitments, and Engagement / Commitments to External Initiatives / Human Rights Endorsements Please select from the list below the charters, frameworks or other voluntary codes or agreements that Microsoft Corporation has signed, endorsed, explicitly supports or otherwise has publicly acknowledged adherence to. If there are others, please specify and explain in Additional Comments. UN Declaration of Human Rights ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy OECD Guidelines for Multinational Enterprises UN Global Compact Global Sullivan Principles SA 8000 Ethical Training Initiative Fair Labor Association UN Draft Norms on the Responsibility of Transnational Corporations and Other Business Enterprises with Regard to Human Rights Other national charters related to labor practices/basic rights issues (e.g. based on above Please Global Network Initiative; UN mentioned guidelines), please specify and explain in Additional Comments and upload specify: Millenium Development Goals documentation

Generated from OneReport 68/299 Microsoft Corporation Stakeholder Engagement

Stakeholders Engaged GRI 4.14

4. Governance, Commitments, and Engagement / Stakeholder Engagement / Stakeholders Engaged GRI 4.14 List of stakeholder groups engaged by the organization. At Microsoft, we believe that constructive stakeholder engagement improves our business decision−making processes and helps us anticipate and address the changing expectations of society. We understand that our reputation outside the company is a direct reflection of how we demonstrate our corporate values. Engagement with customers, partners, shareholders, NGOs, governments, and other stakeholders are essential in helping us identify and manage key issues that will test how successfully we live our values. Microsoft frequently engages with a large number of stakeholder groups including human rights advocates, consumer groups, environmental organizations, privacy groups, and a wide range of governmental and non−govt organizations.

Supporting Documentation: Community Engagement and Investment Page #: View

Generated from OneReport 69/299 Microsoft Corporation CSR Report

4. Governance, Commitments, and Engagement / Stakeholder Engagement / CSR Report How does Microsoft Corporation provide information about its corporate social responsibility (CSR)? Please upload document and/or Web address. Company produces a separate social, environment, sustainability, or CSR report

Company uses the GRI guidelines

Company reports 'in accordance with' the GRI guidelines

Company integrates a section about CSR in the annual report

Generated from OneReport 70/299 Microsoft Corporation Identify Stakeholder GRI 4.15

4. Governance, Commitments, and Engagement / Stakeholder Engagement / Identify Stakeholder GRI 4.15 Basis for identification and selection of stakeholders with whom to engage. At Microsoft, we believe that constructive stakeholder engagement improves our business decision−making processes and helps us anticipate and address the changing expectations of society. We understand that our reputation outside the company is a direct reflection of how we demonstrate our corporate values. Engagement with customers, partners, shareholders, NGOs, governments, and other stakeholders will be essential in helping us identify and manage key issues that will test how successfully we live our values.

Generated from OneReport 71/299 Microsoft Corporation Stakeholder Engagement GRI 4.16

4. Governance, Commitments, and Engagement / Stakeholder Engagement / Stakeholder Engagement GRI 4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

Also please indicate the principles formulated at corporate level that guide your company's stakeholder engagement at site level. Please attach/provide supporting documents or indicate website. A priori examination of costs, opportunities and risks involved in a particular stakeholder engagement * Identification of key stakeholders, that can affect or are affected by your company's activities, for input into strategy, risk management * Development of a common understanding of issues relevant to the underlying problem, such as technical terms Mutual agreement on the type of engagement (type of meetings such as group meetings, one−on−ones, frequency of meetings, exchange of information, roles of each party, etc.) * Feedback from stakeholders to board/supervisory board and/or senior directors and/or compliance and/or communication department * Results of the engagement process are reported to the stakeholders involved * Results of the engagement process are publicly available, please indicate website Please specify: * Other Please specify: Percentage of sites with implemented stakeholder engagement process Please specify: * No principles at corporate level defined, but at more than half of the sites a stakeholder engagement process is implemented

Banking industry companies answer the questions between the two gray bars below (please refer to Guidance Notes for other industries' direction):

Periodic identification of key stakeholders, that can affect or are affected by your company's activities (direct or indirect), for input into corporate strategy, risk, issue management Systematic identification of materiality of issues/stakeholder expectations (e.g. in terms of impact on bottom line, reputation) at least once a year Identified issues/stakeholder expectations communicated to board/supervisory board, e.g. Audit Committee Identified issues/stakeholder expectations communicated to executive management/management board * Identified issues/stakeholder expectations/engagement used embedded in risk, issue/reputation management Please specify: * Identified issues/stakeholder expectations/engagement used or embedded in product development process Value added from stakeholder engagement quantified, e.g. avoidance of litigation, increase in market share due to improved products credibility, corporate reputation Others: Please specify:

Responsibility of systematic stakeholder engagement approach is centralized at the corporate level: Please specify: Responsibility of systematic stakeholder engagement approach is decentralized at business units level

Systematic stakeholder engagement is implemented in all business units, e.g., from sustainability department, risk management department to front offices Systematic stakeholder engagement is implemented in a majority of business units Systematic stakeholder engagement is implemented in a decentralized approach, all relevant business units covered

Generated from OneReport 72/299 Microsoft Corporation No stakeholder engagement approach

Generated from OneReport 73/299 Microsoft Corporation Engagement Result GRI 4.17

4. Governance, Commitments, and Engagement / Stakeholder Engagement / Engagement Result GRI 4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Microsoft engages a variety of customers, partners and related industry groups for each of its different product offerings and services which is managed locally by product segment and/or subsidiary offices. The key issues and concerns raised during stakeholder consultations are used to guide appropriate adjustments to Microsoft's products, policies and business practices.

Generated from OneReport 74/299 Microsoft Corporation Community Engagement

4. Governance, Commitments, and Engagement / Stakeholder Engagement / Community Engagement Does Microsoft Corporation have formal programs for engagement and/or consultation with affected community stakeholders, such as community advisory panels, or action boards, NGOs, government agencies or other community entities? Please select all that apply below and describe or provide evidence of these programs in Additional Comments, including a list of NGOs and other agencies, organizations with which Microsoft Corporation cooperates. Process for identifying stakeholders Has formal programs for engagement/consultation with affected communities Performance objectives and/or benchmarks Consults local communities Builds relationships with NGOs Community involvement projects independently assessed Mechanisms for integrating community feedback into corporate practices

Supporting Documentation: Community Engagement and Investment Page #: View

Generated from OneReport 75/299 Microsoft Corporation Stakeholder Political

4. Governance, Commitments, and Engagement / Stakeholder Engagement / Stakeholder Political Is Microsoft Corporation involved in any stakeholder dialogue concerning political donations or involvement? Please describe. Yes. Microsoft has been developing a code of conduct for corporate political spending and transparency around trade associate dues in conjunction with Walden Asset Management, Calvert, and the Center for Political Accountability.

Generated from OneReport 76/299 Microsoft Corporation 5. Management Approach and Performance Indicators Economic

Economic (Optional)

5. Management Approach and Performance Indicators / Economic / Economic (Optional) / Economic (Optional) This optional data request is provided to allow Microsoft Corporation to report data or information regarding Economic issues that is not specifically requested by research firms. You may add introductory or summary information, or cover specific items not addressed by research firms. A 2007 IDC study documents that the IT industry—and, specifically, Microsoft ecosystem—play a key role in driving local economies in 82 countries around the world. This study showcases, by country, the economic impact of the partner ecosystem—including job creation and employment, taxes generated, and technological investments in the country.

The 2007 study shows the economic impact of IT, software, and the Microsoft partner community on individual economies worldwide, including job creation, tax revenues, new business development, and increased IT spending.

For detailed information, please refer to: https://partner.microsoft.com/40048080

Supporting Documentation: IDC Global Economic Impact Study Page #: View

Generated from OneReport 77/299 Microsoft Corporation Economic: Disclosure on Management Approach

Economic Disclosure on Management Approach GRI EC

5. Management Approach and Performance Indicators / Economic / Economic: Disclosure on Management Approach / Economic Disclosure on Management Approach GRI EC DISCLOSURE ON MANAGEMENT APPROACH Provide a concise disclosure on the Management Approach items outlined below with reference to the following Economic Aspects:

• Economic Performance; • Market Presence; and • Indirect Economic Impacts.

A 2007 IDC study documents that the IT industry—and, specifically, Microsoft ecosystem—play a key role in driving local economies in 82 countries around the world. This study showcases, by country, the economic impact of the partner ecosystem—including job creation and employment, taxes generated, and technological investments in the country.

Impacting Local Economies

Highlights

Jobs developing, distributing, installing, and servicing software account for approximately 50 percent of IT employment, globally. During the next four years, spending on software is projected to create almost 4.5 million of the 7.1 million anticipated new IT−related jobs worldwide. Forty−two percent of global IT employment in 2007 stems from the Microsoft ecosystem.

Projected Partner Impact

Partners—most of them operating in individual economies—will earn an estimated $7.79 for every revenue dollar Microsoft earns worldwide. Of the 35 million people working for IT vendors or in IT departments of customer organizations, more than 40 percent work with Microsoft products or services, or with products and services that run on Microsoft platforms. Through 2011, IT spending is projected to grow six percent annually—about twice the global (average) rate of GDP.

In 2007, the Microsoft ecosystem will generate more than US$420 billion in revenues. Total investment by that ecosystem for 2007 and 2008—most of which will be invested locally—will be nearly US$200 billion.

For more information, or to read the study, please visit: https://www.one−report.com/report/qedit.html?categoryid=289;qid=2262

Supporting Documentation: IDC Global Economic Impact Study Page #: View

Generated from OneReport 78/299 Microsoft Corporation Charitable Giving

5. Management Approach and Performance Indicators / Economic / Economic: Disclosure on Management Approach / Charitable Giving Does Microsoft Corporation have a formal charitable giving program and/or a corporate foundation for philanthropic purposes? Check all that apply below and provide details in Additional Comments. Formal charitable giving program Corporate foundation (affiliated non−profit) Company is committed to gifts in kind to communities or charitable projects Information is available at website: Please http://www.microsoft.com/about/corporatecitizenship/citizenship/giving/ specify:

Supporting Documentation: Microsoft − Community Affairs Puget Sound Grants Program and... Page #: View Community Engagement and Investment Page #: View NGO Connection Page #: View

Generated from OneReport 79/299 Microsoft Corporation Charitable Information

5. Management Approach and Performance Indicators / Economic / Economic: Disclosure on Management Approach / Charitable Information Does Microsoft Corporation publish information giving details on its charitable giving grants, donations, volunteer programs, etc.? Please provide details below and upload supporting details and documentation. The company publishes examples of grants, donations, volunteer programs and other community involvement projects

This information is available in the Annual Report

This http://www.microsoft.com/About/CorporateCitizenship/US/CommunityInvestment/CommunityTechSkills.mspx#MicrosoftUnlimitedPotential information is available at website:

This information is provided as supporting documentation

Supporting Documentation: Employee Engagement Page #: View Unlimited Potential − Community Technology Skills Program Page #: View

Generated from OneReport 80/299 Microsoft Corporation Foundation Report

5. Management Approach and Performance Indicators / Economic / Economic: Disclosure on Management Approach / Foundation Report Does Microsoft Corporation publish a foundation report, charitable giving report, or community involvement report? If so, please upload, and explain below how often this report is published.

If this information is included in a comprehensive social responsibility or citizenship report, please explain below. The information is available online at www.Microsoft.com/citizenship

Generated from OneReport 81/299 Microsoft Corporation Economic Performance Indicators

Aspect: Economic Performance

Economic Value Generated GRI EC1

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Economic Value Generated GRI EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. Currency: most recent reporting year

[report in Value Value Value millions] generated distributed retained

Country, region, Revenues Operating Wages & Payments to Payments to Community (generated or market level costs benefits providers of govts investmts less capital distributed)

Generated from OneReport 82/299 Microsoft Corporation Climate Change Financial Risk GRI EC2

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Climate Change Financial Risk GRI EC2 Financial implications and other risks and opportunities for the organization's activities due to climate change. Risks and/or opportunities (e.g. financial, regulatory, physical) faced as a result of climate change:

have been assessed, and are publicly available (please upload Web address/documents) have been assessed, but are not publicly available have not been assessed

Details of financial implications, risks, and opportunities faced as a result of climate change: Microsoft is exposed to general risks related to climate change in the same way that other companies and individuals are—rising energy costs, changes in weather disrupting company operations, new regulatory requirements being among them.

However, Microsoft continues to be a large global corporation in an industry which grows and expands to meet consumer demands and incorporate new technologies. Microsoft believes the intersection of business and the environment is and will continue to be a critical issue, facilitating our own ability to create business strategies related to climate change. Environmental stewardship has always been central to Microsoft’s business and will continue to play an increasingly important role in the future for all of our stakeholders, both internal and external. We design our software and hardware to comply with worldwide environmental regulations and work proactively to improve energy efficiency of our products and integrate Design for Environment best practices in the development of our new products.

According to a recent Gartner study, the ICT sector accounts for 2% of global greenhouse gas emissions. Microsoft is focused on helping reduce the energy consumed by technology. For instance, • We made Windows Vista our most energy efficient operating system to date, through significant enhancements to power management infrastructure, functionality, and default settings. A senior scientist in the U.S. estimated that if the majority of U.S. computer owners use the enhanced energy saving features in Windows Vista, it could prevent 3 million tons of carbon emissions from electric power plants. • Microsoft serves on the board of the Climate Savers Computing Initiative, which brings together industry leaders to design more efficient computing systems and promote the use of advanced power management settings. By 2010, our goal is to reduce global computer CO2 emissions by 54 million tons per year, equivalent to the annual output of 11 million cars or 10−20 coal−fired power plants. • We also aim to bring dramatically higher energy efficiency to data centers through work in the Green Grid industry partnership and by demonstrating the possibilities in our own operations. Microsoft’s new data center opening in Dublin in 2009 will use outside air to cool the facility and will be around 50% more efficient than similarly sized facilities. • Microsoft Research is supporting cutting edge research projects to advance energy efficiency in computing.

We also see great opportunities to use ICT solutions to reduce the 98% of greenhouse gas emissions from other sectors. We’re not alone in that belief. A recent climate report by the World Wildlife Fund noted “There is probably no other sector where the opportunities through the services provided holds such a reduction potential as for the IT industry.”

The Smart 2020 analysis conducted by McKinsey & Company and published by The Climate Group and Global e−Sustainability Initiative (GeSI) identified ways that effective use of IT can reduce global greenhouse gas emissions 15 percent by 2020 through applications including teleworking, e−commerce, smart building design and use, smart logistics, smart electricity grids, and smart industrial motor systems. The use of these applications could deliver energy efficiency savings to global businesses worth US$800 billion and would eliminate emissions equivalent to 7.8 Giga−tonnes of carbon dioxide. That reduction is greater than the current annual emissions of either the U.S. or China and five times greater than ICT’s own projected carbon footprint in 2020.

Microsoft is working in partnership with customers, government agencies, environmental groups, industry groups, and leading environmental scientists and academics to drive global action on climate change. As other examples:

• Microsoft partnered with the Clinton Foundation to develop a suite of technology tools that will enable cities to accurately monitor, compare and reduce their greenhouse gas emissions to provide a global standard for cities in their climate change accounting, mitigation and communications efforts. • Our collaborative and videoconferencing technology Microsoft Office Live Meeting and Roundtable, can help businesses greatly reduce travel needs. Volvo estimates that the Microsoft collaboration products alone save enough travel to eliminate 900 tons of carbon−dioxide emissions per month. • We are working with our business customers and platform partners on creative consumer solutions. For example, our “EcoDrive” collaboration with Fiat uses an in−car USB stick tool that analyzes the users’ driving style and provides recommendations on more energy efficient driving. Our ClearFlow feature in Live Maps enables drivers in over 70 cities to find routes based on the least traffic, reducing travel time and pollution. • Microsoft Research is collaborating with some of the world’s leading climate scientists and is working to advance environmental sustainability broadly by 1) Redefining the role of geo−spatial technology in environmental research 2) Leading, enabling and accelerating fundamental advances in science and 3) Realizing the potential of software to reduce the environmental impact of individuals.

Generated from OneReport 83/299 Microsoft Corporation RDExpenditures

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / RDExpenditures Please provide the information requested in the table below regarding Microsoft Corporation's expenditures on research and development, and revenues from new products. % of revenue the company spent on R&D in current reporting year: 14% C1

Compared to the industry, the comapny's R&D expenditures are: Below Average Average Above Average

% of revenue the company derived from new products introduced in the last three years: C1 During the 2006 fiscal year we invested $6.5 billion in research and development expense with revenue of $44.3 billion.

Supporting Documentation: Microsoft 2008 10K Page #: 8 View

Additional Comments Innovation is a key factor affecting Microsoft’s growth. Our model for growth is based on broad adoption of innovation, willingness to enter new markets, and embracing and acting on disruptive trends. We continue our long−term commitment to research and development, including advanced work aimed at innovations, in a wide spectrum of technologies, tools, and platforms; communication and collaboration; information access and organization; entertainment; business and e−commerce; and devices. Increasingly, we are taking a global approach to innovation. While our main research and development facilities are located in Redmond, Washington, we also operate research facilities in other parts of the United States and around the world, including China, Canada, Denmark, England, India, Ireland, and Israel. This global approach will help us remain competitive in local markets and attract top talent wherever it resides. More information on the specific use of RDinvestments and product development can be found in the company's 10K.

Generated from OneReport 84/299 Microsoft Corporation Benefit Plan Coverage GRI EC3

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Benefit Plan Coverage GRI EC3 Coverage of the organization's defined benefit plan obligations. Structure of employee retirement plan: Defined benefit plan Other types of benefits

For defined benefit plans, obligations to pay pensions are to be met: Directly by the organization's general resources Through a fund held and maintained separately from the resources of the organization Not applicable

Where the plan's liabilities are met by the organization's general resources, report the estimated value of those liabilities:

Where a separate fund exists to pay the plan's pension liabilities, please report 1) the extent to which the scheme's liabilities are estimated to be covered by the assets that have been set aside to meet them; 2) the basis on which the estimate has been arrived at; and 3) when that estimate was made:

Where a fund set up to pay the plan's pension liabilities is not fully covered, explain the strategy, if any, adopted by the employer to work towards full coverage, and the timescale, if any, by which the employer hopes to achieve full coverage:

Percentage of salary contributed by: Employer Please specify: Employee Please specify: Not applicable

Calculate plan coverage in accordance with the regulations and methods for relevant jurisdictions (e.g., countries), and report aggregated totals:

Additional Comments Partial data provided. Not applicable.

Generated from OneReport 85/299 Microsoft Corporation Governmental Financial Assistance GRI EC4

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Governmental Financial Assistance GRI EC4 Significant financial assistance received from government. Currency: 2007 2006 2005

Tax relief/credits:

Subsidies:

Investment grants, research and development grants, and other relevant types of grants:

Awards:

Royalty holidays:

Financial assistance from Export Credit Agencies (ECAs):

Financial incentives:

Other financial benefits received or receivable from any government for any operation:

Government is present in the shareholding structure:

Generated from OneReport 86/299 Microsoft Corporation Revenue by Region

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Revenue by Region Please provide a breakdown of sales or revenue by country or geographic region, as a percentage. Please also provide the total percentage of sales from non−US operations. % in sales 2007

United States C2

Canada/Mexico

Western Europe

Eastern Europe

Africa

Middle East

Latin America

China

Japan

Total Non−US sales C2 US amounts include shipments to customers in the US and lisensing to certain OEMs and multinational organizations.

No Data Provided because: Business Sensitive

Supporting Documentation: Microsoft 2008 10K Page #: 76 View

Additional Comments Microsoft Corporation reports its revenue by product segment in its Annual Report. Due to the global nature of its business and clients Microsoft Corporation does not provide information concerning sales or revenue by geographic region. Information on US and International revenue is available in the Notes to the Financial Statements section of the Annual Report.

Generated from OneReport 87/299 Microsoft Corporation Contractor Location

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Contractor Location Please indicate the countries/regions in which Microsoft Corporation's major suppliers/contractors are located and what percentage of the product sourced comes from each country/region. Key supply chain partners are located in Asia/Pacific region. Approximately 85% of consumer electronics products originate from these suppliers.

Generated from OneReport 88/299 Microsoft Corporation Supplier Stan (EIRIS)

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Economic Performance / Supplier Stan (EIRIS) Please provide information below as it applies to the following country groups:

High Income OECD Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Korean Republic, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK, US

Other High Income Andorra, Aruba, Bahamas, Bahrain, Barbados, Bermuda, Brunei, Cayman Islands, Channel Islands, Cyprus, Faero Islands, French Polynesia, Greenland, Guam, Hong Kong, Isle of Man, Israel, Kuwait, Liechtenstein, Macao, Malta, Monaco, Netherlands Antilles, New Caledonia, Puerto Rico, Qatar, San Marino, Singapore, Slovenia, Taiwan, United Arab Emirates, Virgin Islands A. Yes If No, skip to F Involved in sourcing, selling, or retailing any of the following: − cane sugar, coffee, tea, cocoa, tropical fruit, fresh vegetables, flowers, tobacco − clothing, accessories, footwear, and toys − consumer electronics or office electronic equipment, including mobile phones − other consumer products (examples include bed linen, towels, jewellry) − consumer electronic components (components for consumer electronic products or office electronic equipment)

B. No If Yes, skip to F Sources these products (in A above) solely from high income OECD and/or other high income countries:

C. Entertainment & Devices division hardware products. The following products are sourced from countries not included in the lists above:

D. China, Thailand, Philippines, Malaysia Countries where the products listed in C above are sourced:

Generated from OneReport 89/299 Microsoft Corporation E. Amount of Turnover (indicate currency) Please % of Turnover specify: Products

cane sugar, coffee, tea, cocoa, % tropical fruit, fresh vegetables, flowers, tobacco

clothing, accessories, footwear, % and toys

consumer electronics or office not available % electronic equipment, including cellular phones

other consumer products %

consumer electronic components not available %

F. Yes If Yes, please upload Supply chain labor standards document/website in policy exists for suppliers and Supporting sub−contactors: Documentation If No, end here

I. Please explain how: Supply chain labor standards are contractual obligations and fully integrated Supply chain labor standards into supplier qualification and supplier management processes. policy is integrated with the procurement process

J. Ethical Trading Initiative Company is a member of or has Social Accountability endorsed the following supply International chain−related initiatives: Fair Labor Association Other Please specify: Electronics Industry Citizenship Coalition

K. Yes If No, skip to M Management systems to implement supply chain labor standards policy exists:

L. Details examples, statistics, or documentation Management system element

Communication of policy to Policy is communicated via Procurement manager and compliance team suppliers (please indicate how supplier communications, and regular awareness trainings alongside EICC the policy is communicated and industry group supplier events. to what proportion of suppliers)

Generated from OneReport 90/299 Microsoft Corporation Communication of policy to THis is done primarily to supplier compliance and account management and supplier employees factory management representatives. As EICC industry trainings are available for supplier 'workers' we will make such opportunities available.

Internal monitoring of Microsoft conducts 3rd party internal monitoring of all sites considered 'high' compliance risk, and all new suppliers sites considered for business. Additionally some of our 'medium' risk suppliers undergo 3rd party audits. This 3rd party auditing is conducted using the EICC Audit Questionnaire.

Internal auditing/visiting of In addition to the 3rd Party auditing based on the EICC Audit Questionnaire, suppliers to assess compliance Microsoft compliance and procurement teams visit suppliers during and in follow up of audit corrective actions as needed. All findings are tracked to completion and are validated as closed by a follow up audit.

External auditing/visiting of Yes, as noted above, we conduct 3rd party audits based on EICC Audit suppliers to assess compliance questionnaire, on approximately 2/3's of contracted suppliers.

Procedures for remedying Microsoft has an in−region subject matter expert team and a management non−compliance escalation process that ties performance to ongoing business.

Employee training on supply All hardware procurement and factory manager teams have been trained by the chain labor standards (please list compliance team, additional training is currently being developed by the EICC the groups of employees trained) which will be shared and utilized broadly by the industry, Microsoft teams will be further trained with this standard training. Compliance team members have daily interactions with procurement teams.

Training or assistance for Microsoft provides regular trainings to suppliers and sub contractors, and suppliers and sub−contractors actively led an EICC−GeSI Audit Preparation training in July in Shenzhen for over 90 suppliers.

Additionally Microsoft is rolling out 1:1 supplier trainings as a function of the supplier engagement process.

Senior responsibility for supply Operations Compliance (General Manager) chain labor standards (please Manufacturing & Operations Vice President indicate reporting level from Finance Operations Vice President CEO) Entertainment & Devices President Steve Ballmer (CEO)

Provide evidence of management E−TASC Self Assessment Questionnaire is being rolled out to add to our systems targeted to "high risk" internal risk management, to further engage and have discussions with 'high suppliers risk' suppliers to identify training opportunities.

Provide evidence of 50% of contracted sites are audited. comprehensive system coverage (e.g. % of suppliers audited)

Provide information on any links This is currently manual. to procurement management systems

M. No Please upload document/website in Publicly reports on supply chain Supporting performance Documentation

Generated from OneReport 91/299 Microsoft Corporation Aspect: Market Presence

Entry Wage Ratios GRI EC5

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Market Presence / Entry Wage Ratios GRI EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation 2007 2006 2005

Distribution of the ratio of the entry level wage to the minimum wage:

Definition used for "significant locations":

Indicate whether a local minimum wage is absent or variable in significant locations of operations. If necessary, explain which minimum wage is being used:

Generated from OneReport 92/299 Microsoft Corporation Local Supplier Use GRI EC6

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Market Presence / Local Supplier Use GRI EC6 Policy, practices, and proportion of spending on locally−based suppliers at significant locations of operation. Geographic definition of "local": Within the same country as the Microsoft hiring subsidiary.

Have a policy or common practices for preferring locally based suppliers either organization−wide or for specific locations. Do not have a policy or common practices for preferring locally based suppliers either organization−wide or for specific locations.

2007 2006 2005

Percentage of procurement budget spent on local suppliers at significant locations of operations: 88.5 88

Factors that influence supplier selection (e.g., costs, environmental and social performance) in addition to their geographic location:

Additional Comments data for 2006 is FY07 data (July 2006 − June 2007) data for 2007 is FY08 data (July 2007 − June 2008) regional breakdown for 2007 Americas 96% Asia 92% EMEA 91% US 75%

Generated from OneReport 93/299 Microsoft Corporation Local Hiring GRI EC7

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Market Presence / Local Hiring GRI EC7 Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation. Have a global policy or common practices for granting preference to local residents when hiring in significant locations of operation. Do not have a global policy or common practices for granting preference to local residents when hiring in significant locations of operation.

Proportion of senior management in significant locations of operation from the local community:

Definition of 'senior management' used:

Generated from OneReport 94/299 Microsoft Corporation Aspect: Indirect Economic Impacts

Total Donations

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Indirect Economic Impacts / Total Donations Donations to community, civil society, and other groups broken down in terms of cash and in−kind donations &sponsorships* per type of group. See Guidance Notes. Currency: USD 2007 Cash 2007 2007 2006 2006 2006 2005 2005 2005 In−Kind Sponsorships* Cash In−Kind Sponsorships* Cash In−Kind Sponsorships*

Education

Hygiene, Health, Nutrition

Cultural/Arts

Research Projects

Local Infrastructure

Housing

Sports

Reproductive Issues

Other Social Services

Environment

Other:

Total U.S. donations 62500000 222800000 53000000 218000000

Total Non−U.S. 47800000 99500000 16000000 100000000 donations

Total Global 110300000 322300000 432600000 69000000 318000000 66000000 315000000 Donations

Employee volunteering during paid working hours

Product or service donations, projects/partnerships or similar. (Cost or tax valuation)

Total donations as a .55% 1.6% 1.93% 2.09% % of pretax profit/EBIT

Generated from OneReport 95/299 Microsoft Corporation Local Investment Impact GRI EC8

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Indirect Economic Impacts / Local Investment Impact GRI EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in−kind, or pro bono engagement. Please explain the extent of development (e.g., size, cost, duration) of significant investments and support, and the current or expected impacts (positive or negative) on communities and local economies. Please indicate whether these investments and services are commercial, in−kind, or pro bono engagement. Opening new worlds for everyone Thirty years ago, Microsoft began with a dream of a computer on every desk and in every home. Today, for the more than 1 billion people we’ve reached, life has changed profoundly. Information is available instantaneously. Personal and professional connections are made easily. Products and services are sold conveniently. Progress is achieved more readily. But for more than 5 billion people, the opportunity to learn, connect, create, and succeed remains elusive.

Transforming education Fostering local innovation Enabling jobs and opportunities In these three areas, Microsoft Unlimited Potential can create the greatest possible impact in building a virtuous cycle of sustained social and economic development. This cycle drives communities; helps build connections to form new communities; is fueled by local and global partnerships; and, most importantly, ultimately becomes locally sustainable. Sustainability is a key indicator of effective programs and activities, and is our long−term measure of success.

For more information, please visit: http://www.microsoft.com/unlimitedpotential/default.mspx

Has a community needs assessment been conducted?

Results of the community needs assessment:

Supporting Documentation: IDC Global Economic Impact Study Page #: View Microsoft − Unlimited Potential Page #: View

Generated from OneReport 96/299 Microsoft Corporation Indirect Economic Impacts GRI EC9

5. Management Approach and Performance Indicators / Economic / Economic Performance Indicators / Aspect: Indirect Economic Impacts / Indirect Economic Impacts GRI EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts. Activities undertaken to understand the indirect economic impacts At Microsoft, we employ a low−cost, the organization has at the national, regional, or local level: high−volume business model that supports local economic development. From the beginning, we have built our business by creating inexpensive software that millions of customers can use without extensive training, services, and support. This approach enables local economies to harness technology sooner and compete globally. Our easy−to−use software also makes it possible for nontechnical workers to start employing a wide range of technology productively without specialized training.

Examples of indirect economic impacts, both positive and negative (see Indicator Protocol for examples):

Significance of the impacts in the context of external benchmarks and stakeholder priorities, such as national and international standards, protocols, and policy agenda:

Supporting Documentation: Citizenship − Global Citizenship at Microsoft Page #: View IDC Global Economic Impact Study Page #: View

Additional Comments For more information on how Microsoft works to mitigate the indirect economic, environmental and social impacts of our business please see the corresponding sections of the online Global Citizenship Report.

Generated from OneReport 97/299 Microsoft Corporation Environmental

Environmental (Optional)

5. Management Approach and Performance Indicators / Environmental / Environmental (Optional) / Environmental (Optional) This optional data request is provided to allow Microsoft Corporation to report data or information regarding Environmental issues that is not specifically requested by research firms. You may add introductory or summary information, or cover specific items not addressed by research firms. Microsoft actively strives to be a good steward for the environment by adhering to sound environmental principles and business practices. Microsoft also partners with respected organizations to drive environmental sustainability in computing and supports extensive internal and external research. Research supported by Microsoft is reducing the carbon footprint of the computing industry through software innovation and realizing the potential of software to address larger global environmental issues.

A broad range of information about our environmental initiatives, partnerships, and performance is available on the frequently updated website www.microsoft.com/environment.

Generated from OneReport 98/299 Microsoft Corporation Environmental: Disclosure on Management Approach

Environmental Disclosure on Management Approach GRI EN

5. Management Approach and Performance Indicators / Environmental / Environmental: Disclosure on Management Approach / Environmental Disclosure on Management Approach GRI EN DISCLOSURE ON MANAGEMENT APPROACH Provide a concise disclosure on the Management Approach items outlined below with reference to the following Environmental Aspects:

• Materials; • Energy; • Water; • Biodiversity; • Emissions, Effluents, and Waste; • Products and Services; • Compliance; • Transport; and • Overall.

At Microsoft, we are committed to software and technology innovations that help people and organizations around the world improve the environment. Our goal is to reduce the impact of our operations and products, and to be a leader in environmental responsibility.

We actively strive to be a good steward for the environment by adhering to sound environmental principles and business practices. Microsoft also partners with respected organizations to drive environmental sustainability in computing and supports extensive internal and external research. Research supported by Microsoft is reducing the carbon footprint of the computing industry through software innovation and realizing the potential of software to address larger global environmental issues.

Microsoft follows strict policies to ensure that the company remains in full compliance with international environmental regulations and the specific environmental requirements of each country/region where we do business. Microsoft actively works to protect our natural resources by doing the following:

Conserving, reusing, and recycling. Where feasible, Microsoft conserves natural resources by using recycled materials and supplies, efficiently using energy, and participating in recycling programs for Microsoft products after they have served their useful life. Microsoft encourages and supports the sustainable use of renewable natural resources.

Reducing and disposing of waste. Microsoft reduces and where possible eliminates waste through source reduction and recycling at company facilities. All waste is safely and responsibly handled and disposed of.

Developing safe and sustainable products. Microsoft develops, manufactures, and markets products that are safe for their intended use. Our environmental policies and practices aim to protect, conserve, and sustain the world's natural resources as well as to protect Microsoft customers and the communities in which we live and operate.

Making environmental stewardship part of our business relationships. At Microsoft, we strive to incorporate our environmental principles into our business relationships. We seek similar commitments to the environment from our major suppliers. We participate in industry groups to set industry standards on environmental practices. We strive to keep our customers informed about our efforts, and we welcome their feedback.

Continually improving our performance. We set objectives and targets to ensure continuous improvement in our environmental performance. Microsoft values employee contributions to our environmental initiatives. We regularly review our business activity and assess our environmental programs, practices, and goals to evaluate progress and to identify areas in which further improvements can be made.

Demonstrating responsibility to our stakeholders. We engage our stakeholders about our objectives and targets, and we periodically communicate our progress to the Board, our shareholders, our customers, and members of the public.

Generated from OneReport 99/299 Microsoft Corporation Climate Change Assess

5. Management Approach and Performance Indicators / Environmental / Environmental: Disclosure on Management Approach / Climate Change Assess Please indicate if Microsoft Corporation has assessed the risks and/or opportunities (e.g., financial, regulatory, physical) faced as a result of climate change. Attach relevant Web addresses and/or documents. Risks and/or opportunities (e.g. financial, regulatory, physical) faced as a result of climate change have been assessed, and are publicly available Risks and/or opportunities (e.g. financial, regulatory, physical) faced as a result of climate change have been assessed, but are not publicly available Risks and/or opportunities (e.g. financial, regulatory, physical) faced as a result of climate change have not been assessed

Additional Comments This information is presented in our Carbon Disclosure Project responses at http://www.cdproject.net/company−homepage.asp?id=1152.

Generated from OneReport 100/299 Microsoft Corporation Environmental Policy

5. Management Approach and Performance Indicators / Environmental / Environmental: Disclosure on Management Approach / Environmental Policy Does Microsoft Corporation have an environmental policy, whether stand alone or integrated into a broader policy statement? Please provide information below and upload the policy and/or indicate website. Yes

Date first issued Please February 2006 specify: Date last updated Please specify: It is part of another policy/code Please specify: It is regularly updated/subject to periodic review Please specify: It is binding for all subsidiaries worldwide It is approved by the relevant board It is publicly available It applies to the company's own operations It applies to direct environmental impacts/risks of own business activities * It applies to indirect environmental impacts/risks of offered products and services * It covers identification of indirect environmental impacts/risks at the customer level * It covers identification/mapping of key environmental exposures of own activities (indirect, direct) at industry level (e.g. affecting the competitive environment) * It covers regular reporting of environmental issues to executive management and/or board of directors It applies to environmental impacts/risks stemming from suppliers and service providers (e.g. contractors) It applies to other key business partners (e.g. suppliers, non−managed operations, JV partners, etc.) Please Suppliers and specify: business partners It applies to what percentage of the company's operations by what factor Please specify: Policy is in development and will be implemented in how many months Please specify:

Supporting Documentation: Citizenship − Environmental Principles Page #: View

Generated from OneReport 101/299 Microsoft Corporation Environmental Policy Adherence

5. Management Approach and Performance Indicators / Environmental / Environmental: Disclosure on Management Approach / Environmental Policy Adherence Does Microsoft Corporation adhere to, sign, or have a membership in any of the following internationally recognized environmental codes of conduct, charters, declarations or sector initiatives? Please select all that apply, and upload details of any others to which Microsoft Corporation subscribes or adheres. International Chamber of Commerce (ICC) Business Charter for Sustainable Development CERES Natural Step Responsible Care Others Please specify: UN Global Compact OECD Guidelines for Multinational Enterprises

Generated from OneReport 102/299 Microsoft Corporation Climate Position

5. Management Approach and Performance Indicators / Environmental / Environmental: Disclosure on Management Approach / Climate Position Please provide information below regarding Microsoft Corporation's public position on the Kyoto Protocol and/or other national or international frameworks for GHG/CO2 emission reductions. Public position on the Kyoto Protocol and/or other national or Microsoft adopted the follwoing Policy internation frameworks for GHG/CO2 emission reductions (please Statement on Climate Change in the upload document/website): summer of 2008:

Microsoft recognizes that climate change is a serious challenge that requires a comprehensive and global response from all sectors of society. To address it, we are committed to measuring, transparently reporting, and reducing the carbon footprint of our own operations. We are also pursuing opportunities with our partners to increase the energy efficiency of computing. While energy efficiency is important, long−term solutions to climate change will require dramatic innovations to transition the world to a sustainable low−carbon economy while expanding the number of people who have access to electricity substantially. Microsoft believes software will play a key role in enabling this transformation. We are working to apply information technology innovation to help people and businesses around the world address climate change and protect the environment. We are also supporting research efforts on this topic being conducted by leading environmental groups, scientists, and governments around the world.

We see an important role for governments to provide the frameworks that spur the transition to a low−carbon economy, including:

1) Direct funding for basic research into renewable and sustainable low−carbon energy sources

2) Market−based mechanisms that are stable and predictable over the long−term and incent the private sector to invest in the transition to sustainable low−carbon energy sources and technologies

3) Regulatory systems that support innovation and eliminate barriers to the adoption of sustainable low−carbon technologies

Generated from OneReport 103/299 Microsoft Corporation Timber Products

5. Management Approach and Performance Indicators / Environmental / Environmental: Disclosure on Management Approach / Timber Products Does Microsoft Corporation have a policy(ies) regarding sustainable forestry practices, the sourcing of sustainable timber, and paper sourcing? Please upload documents/website. Company has a policy on sustainable forestry practices and/or sourcing sustainable timber

Company has a policy on sourcing paper

Generated from OneReport 104/299 Microsoft Corporation Environmental Performance Indicators

Aspect: Materials

Timber Sourcing

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Materials / Timber Sourcing Please use the table below to provide information on Microsoft Corporation's involvement in timber extraction and sourcing. Please upload related policies or other documents, such as details of sustainable timber trade group memberships, if relevant. Nature of activity Volume (cub. metres of Wood Raw Details Material Equivalent (WRME) or similar measurement:

Extraction/harvesting of timber from forests Part of company/business division:

Processing of timber (e.g. to make paper/furniture) Part of company/business division:

Retail or wholesale of timber or timber products Part of company/business division

Use of timber (e.g. in construction, shipbuilding) Part of company/business division

Timber used in construction

What are the company's source locations and types (e.g. plantation, native Source location and type: forest, etc.) if known?

Company is aware of allegations/campaigns against it or its suppliers Please provide details: related to logging in High Conservation Value Forests

Company is aware of allegations or campaigns against it or its suppliers Please provide details: related to illegal logging

Company is aware of allegations or campaigns against it or its suppliers related to logging of high−risk timber species

Please list the main tree species involved in company's supply chain, if Main tree species: known:

Company declares that none of the species involved in its timber If not declared, please provide supply chain are classified on the IUCN Red List of Threatened details: Species as vulnerable, endangered or critically endangered

Company is a member of a sustainable timber trade group (e.g. WWF Please provide details: Forest and Trade Network)

No Data Provided because: Not Applicable

Generated from OneReport 105/299 Microsoft Corporation Hazardous Chemicals

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Materials / Hazardous Chemicals Please provide information below regarding Microsoft Corporation's manufacture, use and/or sale of the listed chemicals. Company can confirm that none of the chemicals listed Yes below are manufactured in or supplied by any of the company's global operations

United Nations Environment Program (UNEP) 12 Aldrin, Chlordane, DDT, Dieldrin, Dioxins & Furans Chemicals (also on the OSPAR list), Endrin, Hexachlorobenzene, Heptachlor, Mirex, Polychlorinated Biphenyls (PCBs, also on the OSPAR list), Toxaphene

Convention for the Protection of the Marine Environment Alkylphenols & ethoxylates, Brominated flame of the North East Atlantic (OSPAR) Priority List retardants (polybrominated diphenyl ethers, (Chemicals also identified by UNEP are not included.) polybrominated biphenyls), Cadmium, Clotrimazole, Dicofol, 4−(dimethylbutylamino) diphenylamine, Endosulfan, Hexachlorocyclohexane (HCH) isomers, Hexamethyldisiloxane, Lead and Organic lead compounds, Mercury and organic mercury compounds, Methoxychlor, Neodecanoic acid, Ethenyl ester (organic ester), Organic tin compounds, Pentachlorophenol, PFOS (perfluorooctanyl sulphonic acid and its salts), Phthalates, Polyaromatic hydrocarbons, Polychlorinated naphthalenes, Short chained chlorinated paraffins, Synthetic musk (e.g., musk xylene, polycyclic, nitro−musks), Trichlorobenzene, Trifluralin (organohalogen), 2,4,6−tri−tert−butylphenol

Ozone Depleting Chemicals Carbon tetrachloride, chlorofluorocarbons (CFCs), halons, hydrochlorofluorocarbons (HCFCs), methyl bromide and 1,1,1−trichloroethane (methyl chloroform)

Other Chemicals Of Concern Bisphenol A, Parabens, Perfluorooctanyl sulfonate (PFOS), PVC, Triclosan

Generated from OneReport 106/299 Microsoft Corporation Ozone Depleting Chem

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Materials / Ozone Depleting Chem The following chemicals deplete the ozone layer and are subject to phase out, although schedules differ by country. Please summarize in the table below Microsoft Corporation's position in regard to these chemicals. Does the company manufacture or No supply ozone−depleting substances in any of its global operations?

Does the company manufacture No products containing ozone depleting substances in any of its global operation?

Chemical group Nature of activity Annual Domestic Global Programs to research, (e.g. manufacture, volume phase out phase out test or develop sale date, if any date, if any alternatives?

CFCs

HCFCs

1,1,1−Trichloro−ethane

Methyl bromide

Carbon tetrachloride

Halons

Generated from OneReport 107/299 Microsoft Corporation Materials Used GRI EN1

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Materials / Materials Used GRI EN1 Materials used by weight or volume. See Indicator Protocol for guidance on calculation. Unit 2007 2006 2005

Non−renewable materials

Direct materials used

No Data Provided because: Other

Additional Comments All manufacturing of Microsoft hardware devices (e.g. Microsoft Xbox) are contracted to 3rd parties with locations around the world. We do not currently track their use of materials.

Generated from OneReport 108/299 Microsoft Corporation Use of Recycled Input GRI EN2

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Materials / Use of Recycled Input GRI EN2 Percentage of materials used that are recycled input materials 2007 2006 2005

% of recycled input materials used

Additional Comments In our hardware products, we integrate and specify the use of recycled plastic in certain products; however, we do not track overall usage at this time. (See e.g., https://www.transparentcontainer.com/TC.nsf/DI/News−Packaging_Digest_Cover_Story.)

In building construction, Microsoft strives to use recycled content materials where cost effective for both new construction and retrofit projects. The company follows the USGBC's LEED Guidelines for new or owned construction projects.

Generated from OneReport 109/299 Microsoft Corporation Aspect: Energy

Energy Consumption

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Energy Consumption Please complete the following table concerning Microsoft Corporation's energy consumption. Report in Giga Joules (GJ). Please explain trends and performance against target. Indicate alternative unit of energy: mWh

% of operations covered: Targets made public Indicate unit (ie, sites) Covered owned buildings/facilities

2007 2006 2005 2004 Target for Year

Total energy use/consumption 694,055 631,810 472,613 436,740 C4

% of energy consumed that is derived from renewable sources 37% (wind, solar, hydro, biomass)

Energy consumption factored against a base figure (e.g. kW/staff, kW/production unit) C4 2006 amount represents total mWh from data center energy consumption inclusive of US and International data centers both owned and leased, previous amounts represent Puget Sound region only

Generated from OneReport 110/299 Microsoft Corporation Direct Energy Use GRI EN3

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Direct Energy Use GRI EN3 Direct energy consumption by primary energy source. Unit (joules or mulitples of joules): 2007 2006 2005

Biofuels

Ethanol

Hydrogen

Total direct consumption of renewable primary energy

Coal

Natural gas C10

Fuel distilled from crude oil

Total direct consumption of non−renewable primary energy

Total direct consumption of primary energy C10 Natural gas usage in joules

No Data Provided because: Not Applicable

Generated from OneReport 111/299 Microsoft Corporation Indirect Energy Use GRI EN4

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Indirect Energy Use GRI EN4 Indirect energy consumption by primary source. Unit (joules or kWh/year 2007 2006 2005 multiples of joules):

Renewable Indirect Total used Corresponding Total Corresponding Total Corresponding Sources primary energy used primary energy used primary energy consumed in its consumed in its consumed in production production its production

Solar 2,102,400

Wind

Geothermal

Hydro energy 254,763,914

Biomass−based intermediate energy

Hydrogen−based intermediate energy

Non−Renewable Indirect Sources

Electricity 437,158,948

Heating and cooling

Steam

Nuclear energy

Additional Comments These figures apply to Microsoft's owned buildings and facilities where we control purchase of electricity, and not to Microsoft's leased office space.

Generated from OneReport 112/299 Microsoft Corporation Energy Use Reduction

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Energy Use Reduction Please indicate whether or not Microsoft Corporation has programs and/or targets to reduce energy use. Upload details as appropriate. Corporate energy use Fleet energy use Product energy use Energy use reduction targets Other Please specify:

Specify objectives and expected date of goal attainment: Microsoft constantly evaluates new technology and retrofits energy consuming systems in our operations and our products.

Please specify any improvements and implemented measures with respect to energy use up to now: Microsoft has implemented a variety of energy conservation measures to save energy.

Since 2004, Microsoft has completed retrofit measures in the Puget Sound campus that have saved a cumulative 9 million kWh/year. These measures include: − Lighting fixture retrofits (office & parking garages) − Chiller plant optimization and pumping system retrofits − HVAC system optimization and retrofits − Solar generation system installation

Among ways we promote more energy efficient products: − We made Windows Vista our most energy efficient operating system to date, through significant enhancements to power management infrastructure, functionality, and default settings. A senior scientist in the U.S. estimated that if the majority of U.S. computer owners use the enhanced energy saving features in Windows Vista, it could prevent 3 million tons of carbon emissions from electric power plants. −Microsoft serves on the board of the Climate Savers Computing Initiative, which brings together industry leaders to design more efficient computing systems and promote the use of advanced power management settings. By 2010, our goal is to reduce global computer CO2 emissions by 54 million tons per year, equivalent to the annual output of 11 million cars or 10−20 coal−fired power plants. − We also aim to bring dramatically higher energy efficiency to data centers through work in the Green Grid industry partnership and by demonstrating the possibilities in our own operations. Microsoft’s new data center opening in Dublin in 2009 will use outside air to cool the facility and will be around 50% more efficient than similarly sized facilities. − Microsoft Research is supporting cutting edge research projects to advance energy efficiency in computing.

Generated from OneReport 113/299 Microsoft Corporation Energy Saved GRI EN5

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Energy Saved GRI EN5 Energy saved due to conservation and efficiency improvements. Unit (in joules or multiples of joules): 2007 2006 2005

Total energy saved

No Data Provided because: Other

Additional Comments Microsoft Corporation's extensive use of leased facilities worldwide precludes us from reporting corporate−wide figures regarding conservation activity or energy saved.

Generated from OneReport 114/299 Microsoft Corporation Product Energy Saved GRI EN6

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Product Energy Saved GRI EN6 Initiatives to provide energy−efficient or renewable energy−based products and services, and reductions in energy requirements as a result of these initiatives. Existing initiatives to reduce the energy requirements of major products/product groups or services: According to a recent Gartner study, the ICT sector accounts for 2% of global greenhouse gas emissions. Microsoft is focused on helping reduce the energy consumed by technology. For instance, • We made Windows Vista our most energy efficient operating system to date, through significant enhancements to power management infrastructure, functionality, and default settings. A senior scientist in the U.S. estimated that if the majority of U.S. computer owners use the enhanced energy saving features in Windows Vista, it could prevent 3 million tons of carbon emissions from electric power plants. • Microsoft serves on the board of the Climate Savers Computing Initiative, which brings together industry leaders to design more efficient computing systems and promote the use of advanced power management settings. By 2010, our goal is to reduce global computer CO2 emissions by 54 million tons per year, equivalent to the annual output of 11 million cars or 10−20 coal−fired power plants. • We also aim to bring dramatically higher energy efficiency to data centers through work in the Green Grid industry partnership and by demonstrating the possibilities in our own operations. Microsoft’s new data center opening in Dublin in 2009 will use outside air to cool the facility and will be around 50% more efficient than similarly sized facilities. • Microsoft Research is supporting cutting edge research projects to advance energy efficiency in computing.

Unit (in joules or multiples of joules): 2007 2006 2005

Reduction in energy requirements of products and services

Assumptions about consumptions or normalization factors:

Additional Comments Microsoft is currently working to develop a global energy management program for its real estate portfolio. In the United States, we have made a commitment to follow the USGBC's LEED guidelines for new owned properties and committed to attain the Silver level certification at a minimum. Generally, these new buildings will consume at least 15% less energy than comparable commercial buildings.

Generated from OneReport 115/299 Microsoft Corporation Reduce Indirect Energy GRI EN7

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Energy / Reduce Indirect Energy GRI EN7 Initiatives to reduce indirect energy consumption and reductions achieved. Existing initiatives to reduce indirect energy use: The company follows the USGBC's LEED Guidelines for new or owned construction projects. The company's free employee bus system−−the Connector−−takes 400,000 car miles off the road in the Seattle area every week.

Unit (in joules or multiples of joules): 2007 2006 2005

Reduction of indirect energy used in energy−intensive materials

Reduction of indirect energy used in subcontracted production

Reduction of indirect energy used in business−related travel

Reduction of indirect energy used in employee commuting

Assumptions and methodologies used to calculate indirect energy use, and indicate source of information:

Generated from OneReport 116/299 Microsoft Corporation Aspect: Water

Water Use Factored

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Water / Water Use Factored Report Microsoft Corporation's total water use and water use factored against a base figure (e.g. turnover, staff, production volume, etc.). Report in M3/year. Unit if Different from M3/year:

% Coverage of Operations: Coverage Unit:

2007 2006 2005 2004 Target for Year

Total water use

Water use factored against a base figure (per unit of production):

No Data Provided because: Other

Additional Comments Microsoft Corporation's extensive use of leased facilities worldwide precludes us from reporting corporate−wide water use figures.

Generated from OneReport 117/299 Microsoft Corporation Water Withdrawal GRI EN8

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Water / Water Withdrawal GRI EN8 Total water withdrawal by source. Report in cubic meters per year (m3/year) 2007 2006 2005

Surface water, including water from wetlands, rivers, lakes, and oceans

Ground water

Rainwater collected directly and stored

Waste water from another organization

Municipal water supplies or other water utilities

No Data Provided because: Not Known

Additional Comments Microsoft Corporation's extensive use of leased facilities worldwide precludes us from reporting corporate−wide figures for water withdrawal by source.

Generated from OneReport 118/299 Microsoft Corporation Water Sources Affected GRI EN9

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Water / Water Sources Affected GRI EN9 Water sources significantly affected by withdrawal of water. Water Withdrawals account Recognized by professionals to be Is a Ramsar−listed wetland Size of water Biodiversity source for 5% or more of the particularly sensitive as a rare, or a nationally or source (in value name annual average threatened, or endangered system or internationally proclaimed cubic meters volume because it supports a particular conservation area (m3)) endangered species of plant or animal

No Data Provided because: Other

Additional Comments Microsoft Corporation's extensive use of leased facilities worldwide makes it impossible to accurately estimate corporate wide water usage figures.

Water supplied is generally provided from municipal water supplies and not direct extraction.

Generated from OneReport 119/299 Microsoft Corporation Water Reused GRI EN10

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Water / Water Reused GRI EN10 Percentage and total volume of water recycled and reused. Report in cubic meters (m3) 2007 2006 2005

Total volume of water recycled/reused

Recycled water as a percentage of total water withdrawal

Additional Comments Microsoft Corporation's extensive use of leased facilities worldwide precludes us from reporting corporate−wide recycled and reused water figures.

Generated from OneReport 120/299 Microsoft Corporation Aspect: Biodiversity

UN Protected Areas

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / UN Protected Areas Please provide the information requested below regarding Microsoft Corporation's operations in areas on the UN List of Protected Areas, and adherence to the Convention on Biological Diversity. Company operates in areas listed on the UN List of Protected Areas Provide details on the geographical locations involved:

Company policy for these areas are in line with Convention on Biological Diversity Please provide details:

Generated from OneReport 121/299 Microsoft Corporation Biodiverse Land GRI EN11

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Biodiverse Land GRI EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Geographic Subsurface and/or Position in relation to Type of operation (office, Size of Biodiversity location underground land protected area (in the manufacturing/production, or operational value that may be owned, area, adjacent to, or extractive) site in km2 characterized leased or managed containing portions of the by: 1) the protected area) and high attribute of the biodiveristy value area protected area outside protected areas and high biodiversity value area outside protected area, and 2) listing of protected status

None

Additional Comments Microsoft does not build or lease facilities in environmentally sensitive areas. Microsoft complies with all applicable laws in permitting, constructing, and operating its facilities.

Generated from OneReport 122/299 Microsoft Corporation Impact on Biodiversity GRI EN12

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Impact on Biodiversity GRI EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. No impacts. Microsoft complies with all local, State and Federal laws.

Additional Comments Due to the nature of Microsoft Corporation's business, we have limited operations with the production of products and services in terrestrial, freshwater or marine environments.

Generated from OneReport 123/299 Microsoft Corporation Biodiversity in EIAs

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Biodiversity in EIAs Please provide the information requested below regarding Microsoft Corporation's performance of environmental impact assessments (EIAs) in site development or development in green fields areas. Company includes a biodiversity survey within the scope of EIAs Details:

Generated from OneReport 124/299 Microsoft Corporation Restored Habitats GRI EN13

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Restored Habitats GRI EN13 Habitats protected or restored. Geographic location Size (in km2 if larger than Success of the restoration was/is approved by one km2) independent professionals

Partnerships with 3rd parties to protect or restore habitat areas not listed above

No Data Provided because: Not Applicable

Generated from OneReport 125/299 Microsoft Corporation Biodiversity Program

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Biodiversity Program Please indicate whether Microsoft Corporation has a formal policy, action plan, or programs to reduce impact on land and/or biodiversity/wildlife. Please provide supporting documentation. If plan is under development, please indicate date it will be in place. Describe program(s) to reduce impact on land and/or biodiversity/wildlife:

Company does not have a biodiversity policy or action plan, but will have one by: Date:

Company has had a biodiversity policy or action plan since: Date:

The company has a policy to source natural resources from suppliers with an operating biodiversity Timber sourcing: policy or certification scheme % of products certified: Agriultural sourcing: % of products certified: Fish sourcing: % of products certified:

The company carries out local biodiversity enhancement projects or funds local biodiversity action Details:

Generated from OneReport 126/299 Microsoft Corporation Biodiversity Action

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Biodiversity Action Please provide details of Microsoft Corporation's biodiversity policy or action plans as requested below. Has the company developed a group−wide No Biodiversity Action Plan (BAP)?

Elements included in the BAP. Identification of impacts Global habitat survey Targets Indicators Monitoring Integration of BAP with EMS Review impacts Reporting

Has the company developed any site level % of land/sites: BAPs?

Elements included in site level BAPs: Identification of impacts Local habitat survey Targets Indicators Monitoring Integration of BAP into EMS Review impacts Reporting

Coverage of biodiversity action plans: % of land/sites: % of relevant product lines or suppliers:

If the company carries out biodiversity Microsoft Research collaborates with leading environmental scientists projects/partnerships with NGOs, please give and the UNEP on a number of projects to apply computing power to details: global biodiversity monitoring and modeling. For more information, see http://www.microsoft.com/environment/research.aspx.

Has the company developed biodiversity No The company has reported performance against these indicators performance indicators? Reference provided in supporting documentation

Generated from OneReport 127/299 Microsoft Corporation Biodiversity Strategy GRI EN14

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Biodiversity Strategy GRI EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. Microsoft has not degraded or negatively impacted any species or ecosystems either in its new construction or operational activities.

Generated from OneReport 128/299 Microsoft Corporation Endangered Species GRI EN15

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Biodiversity / Endangered Species GRI EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. Habitat affected by operations that include # of critically # of endangered # of vulnerable # of near # of least species on the IUCN Red List and on endangered species species species threatened concern national conservation lists species species

No Data Provided because: Not Applicable

Generated from OneReport 129/299 Microsoft Corporation Aspect: Emissions, Effluents, and Waste

Direct, Indirect Greenhouse Gas GRI EN16

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Direct, Indirect Greenhouse Gas GRI EN16 Total direct and indirect greenhouse gas emissions by weight. Estimated coverage (%) of total revenue in most recent reporting year

Direct and Indirect Greenhouse Gas (GHG) Emissions (in metric tonnes 2007 2006 2005 2004 Target for CO2 equivalent) Year:

CO2 Direct 25,00 24,550 10,590 35,820

CO2 Ind. Scope 2 255,000 251,790 250,140 224,690

CH4 Direct C5

N2O Direct C6

HFCs Direct

PFCs Direct C8

CF6 Direct

Subtotal Direct

Subtotal Ind. Scope 2

Total Direct and Indirect GHG Emissions

Subtotal Ind. Scope 3 (from G3 EN17 "GHG Scope 3 Emission")

Total GHG Emissions

For total GHG emissions, please explain trend and performance against target:

Total direct GHG emissions factored against base figure (please specify base figure, e.g., revenue, volume or production, floor space area, etc.)

GHG emission data is made publicly available (please upload Web address/document)

GHG emission data was prepared in accordance with GHG Protocol (indicate scope 1,2, or 3 and explain in Additional Comments)

An additional or alternative GHG emission calculation methodology was used (please upload Web address/document and explain in Additional Comments) C5 On−site combustion is nearly 100% natural gas and therefore methane and nitrous oxide emissions are minimal. C6 On−site combustion is nearly 100% natural gas and therefore methane and nitrous oxide emissions are minimal. C8 Microsoft does not use Perfluorcarbons (PFCs) for any of its internal operations.

Generated from OneReport 130/299 Microsoft Corporation Other Indirect Greenhouse Gas GRI EN17

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Other Indirect Greenhouse Gas GRI EN17 Other relevant indirect greenhouse gas emissions by weight. Estimated coverage (%) of total revenue in most recent reporting year

Other Relevant Indirect Greenhouse Gas (GHG) Emissions (in tonnes CO2 equivalent) 2007 2006 2005 2004

CO2 Ind. Scope 3

CH4 Ind. Scope 3

N2O Ind. Scope 3

HFCs Ind. Scope 3

PFCs Ind. Scope 3

CF6 Ind. Scope 3

Total Ind. Scope 3

Additional Comments Microsoft does not currently track this information. Microsoft is not a manufacturing company and all of our hardward and software products are manufactured by 3rd parties to our specificaitons.

Generated from OneReport 131/299 Microsoft Corporation Climate Strategy

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Climate Strategy Please provide information below regarding Microsoft Corporation's policy and strategy for reducing/managing carbon emissions risk.

Please check Guidance Notes. Company has a policy/statement/strategy addressing its direct or indirect impacts on climate Yes and it is publicly change: available (please upload document/website) Yes, it is part of a Please wider environmental specify: policy Yes, but it is not publicly available No, but we are currently developing a public policy No

Company has committed to long−term (> or = 5 years) goals or targets covering its direct or Yes, and they are publicly indirect impacts relating to climate change: available (please upload document/website) Yes, but they are not publicly available No, but we are currently developing long−term goals No

Company has committed to short−term (<5 years) goals or targets covering its direct or Yes, and they are publicly indirect impacts relating to climate change: available (please upload document/website) Yes, but they are not publicly available No, but we are currently developing short−term goals No

Is the strategy based on the following elements:

Reducing carbon intensive operations/technologies/products/services

* Development of carbon emissions from transport of raw materials/products during the Tons of transport−related CO2 last three years factored against tons of products:

* Measures to increase transport efficiency

Intra−company emissions trading

National/international emissions trading

Carbon sequestration projects

Clean Development Mechanisms (CDM)

Joint Implementation (JI) projects

Generated from OneReport 132/299 Microsoft Corporation Switching fuel sources

Other (please specify)

Adjustments to portfolio of businesses

Supporting Documentation: Climate Change Policy Statement Page #: View

Generated from OneReport 133/299 Microsoft Corporation GHG Verification

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / GHG Verification Please indicate if your GHG inventory is verified, either externally or internally. GHG inventory externally verified by:

Not externally verified

GHG inventory is internally verified

GHG inventory not verified

Generated from OneReport 134/299 Microsoft Corporation Greenhouse Gas Reductions GRI EN18

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Greenhouse Gas Reductions GRI EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. Theme Description of Reductions in % Total Investment in Start date of Duration initiative/activity GHG/CO2 emissions (currency): initiative of emissions initiative achieved (years)

Fuel switching (e.g. % investment in 'green electricity')

Research & development in % low carbon technologies

Production of low carbon % technologies

Generation of renewable % energy

Product/service innovation %

Carbon capture and storage % (sequestration)

Demand−side management % (e.g. working with customers)

New business model (e.g. % switch from manufacturing to service model)

Breakthrough project − any % initiative resulting in >25% reduction in total emissions

Other %

Additional Comments Microsoft does not currently have a means to track this information.

Generated from OneReport 135/299 Microsoft Corporation Refrigerant Phaseout

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Refrigerant Phaseout Please provide Microsoft Corporation's targets and programs to phase out CFCs/HCFCs−containing refrigerating systems, uploading relevant documentation. Does any part of the company globally still use CFCs/HCFCs in refrigeration equipment? Yes

Targets, programs regarding phase−out of CFC/HCFC use in refrigeration equipment, including phase−out dates: As part of a larger mission in the area of Corporate Social Responsibility (CSR) we have decided to not use HCFC refrigerants in new applications. Many non−U.S. nations that are signatory to the Kyoto Protocol of course no longer use HCFC’s (e.g. R123, R22) but the U.S. does still allow their use until end of an EPA phase out schedule. http://www.epa.gov/ozone/title6/phaseout/index.html Chillers for all new MS building applications are required to use R134b.

Generated from OneReport 136/299 Microsoft Corporation Ozone−Depleting Emissions GRI EN19

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Ozone−Depleting Emissions GRI EN19 Emissions of ozone−depleting substances by weight. 2007 2006 2005 2004

Ozone−depleting Emitted Emitted (in Emitted Emitted (in Emitted Emitted (in Emitted Emitted (in substances (in tonnes (in tonnes (in tonnes (in tonnes tonnes) CFC−11 tonnes) CFC−11 tonnes) CFC−11 tonnes) CFC−11 equivalent) equivalent) equivalent) equivalent)

Annex A − Group I Chlorofluorocarbons: CFC−11, CFC−12, CFC−113, CFC−114 and CFC−115

Annex A − Group II Halons: halon 1211, halon 1301 and halon 2402

Annex B − Group I Other fully halogenated CFCs: CFC−13, CFC−111, CFC−112, CFC−211, CFC−212, CFC−213, CFC−214, CFC−215, CFC−216, CFC−217

Annex B − Group II Carbon Tetrachloride

Annex B − Group III 1,1,1−trichloroethane (methyl chloroform

Annex C − Group I HCFCs

Annex C − Group II HBFCs

Annex E Methyl Bromide

Total ozone−depleting emissions

Estimated data coverage (%) for most recent reporting year

Target for most recent reporting year

Please explain trend and achievement against target:

Additional Comments

Generated from OneReport 137/299 Microsoft Corporation Microsoft reports this information in the www.cdproject.net and the data may be found in those annual Carbon Disclosure Reports.

Generated from OneReport 138/299 Microsoft Corporation NOx, SOx &Other Air Emissions GRI EN20

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / NOx, SOx &Other Air Emissions GRI EN20 NOx, SOx, and other significant air emissions by type and weight. % of company covered by this data:

Unit (in kilograms or in multiples such as tonnes): 2007 2006 2005 2004 Target (year):

SOx emissions

SOx emissions factored against a base figure (e.g. turnover, staff, production volume, etc.)

Specify the base factor:

NOx emissions

NOx emissions factored against a base figure (e.g. turnover, staff, production volume, etc.)

Specify the base factor:

Particulate matter emissions

Persistent organic pollutant (POP) emissions

Volatile organic compound emissions

Target for Please explain VOC trend 2007 VOC: against 2007 target:

Hazardous air pollutant emissions

Stack and fugitive emissions

No Data Provided because: Not Applicable

Generated from OneReport 139/299 Microsoft Corporation Air Emission Reduction

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Air Emission Reduction Does Microsoft Corporation have targets and programs in place to reduce air emissions? If so, please check all that apply below and describe the programs. Upload any relevant details. Corporate−wide program with targets and measuring plan Involves management incentives Includes employee training

Description of program(s) to reduce air emissions:

No Data Provided because: Not Applicable

Generated from OneReport 140/299 Microsoft Corporation Water Discharge GRI EN21

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Water Discharge GRI EN21 Total water discharge by quality and destination. 2007 2006 2005

Planned and Volume of Planned and Volume of Planned and Volume of unplanned effluents or unplanned effluents or unplanned effluents or water process water in water process water in water process water in discharges discharges (if discharges discharges (if discharges discharges (if applicable) − applicable) − applicable) − please indicate please indicate please indicate parameters used: parameters used: parameters used:

Destination:

Treatment method:

Water discharge reused by another organization

Additional Comments Water discharges are all processed with the local/regional jurisdictions sewage treatment plants and concentrations of various solids are within the acceptable ranges as specified by the various jurisdictions.

Generated from OneReport 141/299 Microsoft Corporation Total Waste GRI EN22

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Total Waste GRI EN22 Total weight of waste by type and disposal method. Unit:

% of operations covered:

How the method of disposal was determined:

Waste by method of disposal

2007 Hazardous Non−hazardous Total Target for 2007

Composting

Reuse

Recycling

Recovery

Incineration

Incineration for energy recovery

Landfill

Deep well injection

On−site storage

2007 Total Target for Explain trend (considering data below) and HAZARDOUS performance against target for waste: HAZARDOUS waste

2007 Total waste Target for total waste: Explain trend (considering data below) and generated performance against target for total waste

2006 Hazardous Non−hazardous Total Target for 2006

Composting

Reuse

Recycling

Recovery

Incineration

Incineration for energy recovery

Generated from OneReport 142/299 Microsoft Corporation Landfill

Deep well injection

On−site storage

2006 Total Target for Explain trend (considering data below) and HAZARDOUS performance against target for waste: HAZARDOUS waste

2006 Total waste Target for total waste: Explain trend (considering data below) and generated performance against target for total waste

2005 Hazardous Non−hazardous Total

Composting

Reuse

Recycling

Recovery

Incineration

Incineration for energy recovery

Landfill

Deep well injection

On−site storage

2005 Total

2004 Hazardous Non−hazardous Total

Composting

Reuse

Recycling

Recovery

Incineration

Incineration for energy recovery

Landfill

Deep well injection

On−site storage

Generated from OneReport 143/299 Microsoft Corporation 2004 Total

Additional Comments We do not track waste across all our leased facilities, but have projected that a switch to compostable cups, plates, and flatware in 2007 cut our waste from cafeterias by 50%.

Generated from OneReport 144/299 Microsoft Corporation Water Emission Data

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Water Emission Data Please provide data below regarding Microsoft Corporation's water emissions. Indicator Units % coverage 2007 2006 2005 Target

BOD (biological oxygen demand)

COD (chemical oxygen demand)

Other

No Data Provided because: Not Applicable

Generated from OneReport 145/299 Microsoft Corporation Water Pollution

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Water Pollution Please provide a description of the measures Microsoft Corporation is taking to minimize or reduce water pollution. This may be uploaded and/or described in the box below.

No Data Provided because: Other

Generated from OneReport 146/299 Microsoft Corporation Significant Spills GRI EN23

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Significant Spills GRI EN23 Total number and volume of significant spills. 2007 2006 2005 2004

Volume unit: Total Total Total Total Total Total Total Total number volume number volume number volume number volume

Recorded significant spills

Spills reported in Location Volume Spill material Impact the recent annual of spill of spill of spill financial statement

Oil Fuel Wastes Chemicals Other

Additional Comments Microsoft has had no significant spills.

Generated from OneReport 147/299 Microsoft Corporation Hazardous Waste GRI EN24

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Hazardous Waste GRI EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. Unit: 2007 2006 2005

Total weight of hazardous weight transported

Total weight of imported hazardous waste

Total weight of exported hazardous waste

Total weight of treated hazardous waste

Percentage of transported waste shipped internationally:

Additional Comments Microsoft REFdoes not have acces to this type of information.

Generated from OneReport 148/299 Microsoft Corporation Hazardous Waste Reduction

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Hazardous Waste Reduction Does Microsoft Corporation have targets and programs in place to reduce hazardous waste production or increase recycling of hazardous waste? Please complete the following and include explanations in Additional Comments. Corporate−wide program with targets and Involves management Includes employee measuring plan incentives training

Hazardous waste minimization yes yes yes programs no no no

Generated from OneReport 149/299 Microsoft Corporation Water Discharge Impact GRI EN25

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Emissions, Effluents, and Waste / Water Discharge Impact GRI EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization's discharges of water and runoff.

Additional Comments Microsoft's construction or operational activities have had no impacts on natural habitats. Microsoft has complied with all local, State and Federal laws and regulations

Generated from OneReport 150/299 Microsoft Corporation Aspect: Products and Services

Mitigate Product Impact GRI EN26

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Mitigate Product Impact GRI EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. Microsoft is working to increase the energy efficiency of our products and services. As just a few examples:

1) Microsoft’s latest client operating system, Windows Vista® with its on−by−default sleep mode, saves 1 million pounds of greenhouse gas emissions per year for every 1000 pcs. 2) On the server side, tests for Microsoft® Windows Server™ 2008 reveal power savings of up to 10 percent over Windows Server 2003 at comparable levels of throughput. 3) Microsoft® Windows Server™ 2008 Hyper−V feature is designed to allow customers to reduce the number of physical machines (and thus energy use) without sacrificing performance. 4) Microsoft’s System Center software helps IT professionals proactively manage the energy consumption and environmental footprint of their physical and virtual IT environments. With its seamless integration to Microsoft’s operating systems, System Center optimizes resources and reduces energy consumption through: Progressive Group Policy management; Virtualization for server consolidation; and Centralized reporting and control.

We are also working to reduce the energy use and impacts of our data centers which host our online services. Microsoft’s new data centers will consume 50% less energy for the same level of output from datacenters built just 3 years ago. This is done through: efficient design of data centers to allow for flexible configuration; optimization of power and cooling requirements; and ffective reporting and monitoring of server utilization, and proactive management of issues.

Additional information about efforts to promote energy efficiency in our products and services is available online at http://www.microsoft.com/environment/technical_guidance.aspx.

Our consumer electronics business complies or exceeds all environmental guidelines and regulations. We are committed to this standard while maintaining product durability, safety and performance. Microsoft bans or restricts the use of various harmful substances and plans to also phase out phthalate plasticizers and BFR from all of its hardware products by December 31, 2010. Additional information is available online at http://www.microsoft.com/environment/our_commitment.aspx.

Generated from OneReport 151/299 Microsoft Corporation Product Design

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Product Design Please provide information and details below regarding Microsoft Corporation's techniques to design products with lower environmental impacts, and provide details/supporting documentation on the systems and standards used. Does the company use Life Cycle Yes Please provide details on systems and standards used, percent of products Analysis (LCA); Design for the covered, and upload supporting documentation: Environment (DFE); Product No Stewardship, etc. to design products with lower environmental impacts?

Does the company operate a Yes Please provide details on systems and standards used, and upload take−back scheme for end of supporting documentation: contract or upgrading customers? No

Which of the following measures Energy efficiency during use do you consider while designing a new product? Extension of product lifetime Use of renewable materials Safety Ergonomics None

Does the company develop Yes If yes, please provide details: products with reduced environmental product impacts or No environmental benefits (e.g., energy use, disposal)?

If company operations do not Details: involve manufacturing, please Microsoft is working to increase the energy efficiency of our products and describe ways in which product or services. As just a few examples: service impacts are addressed: 1) Microsoft’s latest client operating system, Windows Vista® with its on−by−default sleep mode, saves 1 million pounds of greenhouse gas emissions per year for every 1000 pcs. 2) On the server side, tests for Microsoft® Windows Server™ 2008 reveal power savings of up to 10 percent over Windows Server 2003 at comparable levels of throughput. 3) Microsoft® Windows Server™ 2008 Hyper−V feature is designed to allow customers to reduce the number of physical machines (and thus energy use) without sacrificing performance. 4) Microsoft’s System Center software helps IT professionals proactively manage the energy consumption and environmental footprint of their physical and virtual IT environments. With its seamless integration to Microsoft’s operating systems, System Center optimizes resources and reduces energy consumption through: Progressive Group Policy management; Virtualization for server consolidation; and Centralized reporting and control.

Additional information about efforts to promote energy efficiency in our

Generated from OneReport 152/299 Microsoft Corporation products and services is available online at http://www.microsoft.com/environment/technical_guidance.aspx.

Generated from OneReport 153/299 Microsoft Corporation Beneficial Products

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Beneficial Products Does Microsoft Corporation produce or sell any "green" products or environmentally beneficial products or services, including any of the following? Please upload any relevant details describing initiatives or programs, processes or product lines that contribute to solving environmental problems and achieving sustainable development. Year of implementation % of revenues

Pollution control equipment no

Emissions monitoring equipment no

Emissions reduction equipment no

Product with high recycled content no C5

Green Seal certified products no C6

Energy efficiency service contracting no

Other (please specify): See additional C8 comments

Other (please specify): C9

Other (please specify): C10 C5 At present we have not found viable constituents and components for our products with high recycled content, but we have incorporated packaging material containing PCW, both for paper−based as well as plastic packaging, for the majority of our software and hardware products. We continue to research alternative bio−based materials and those with high PCW content as well. C6 The present list of product categories available for Green Seal certification does not include the type of products that Microsoft manufactures C8 Live Meeting enables you to collaborate online with colleagues, customers, and partners in real time, between either individuals or large groups—with just a PC, and an Internet connection. This reduces the need for travel and resulting use and combustion of fossil fuels. C9 Through the MAR program, refurbishers are licensed to install certain Microsoft Windows operating systems and MS Works software on refurbished computers that are supplied to educational establishments, charitable organizations, and telecenters around the world. The MAR Program is part of Microsoft's Partners in Learning and Unlimited Potential initiatives, and was created to meet the needs of refurbishers, to help communities with limited access to technology, and to benefit the environment by giving new life to a significant number of computers that may otherwise be destined for landfills. The first MAR program began in the UK in 2000 and was followed by a program for North America in 2003, expansion to Europe, the Middle East and Africa in 2004 and with the expansion to Asia and Latin America in 2005 is now a global program. In May 2006 there were over 500 MARs in over 40 countries around the world. The program has supplied over 150,000 licenses for refurbished computers. C10 Microsoft participates in the Digital Pipeline, which was created to address the vast pool of older but useable PCs that companies generate when upgrading their systems. These PCs can be redeployed to serve the educational needs of communities in the developing world, which keeps them out of landfills. In 2004, over 2000 PCs were donated to Namibia from participants in EMEA. Refurbishers pay for recycling upfront via an escrow account and get this cost refunded upon proof of recycling of the machine they refurbished. Microsoft is using its relationships in developed and developing countries to aid the creation of the Digital Pipeline.

Additional Comments Microsoft provides software tools and technology that help companies, organizations, and individuals reduce their energy use, travel, and other environmental impacts. As just a few examples:

Generated from OneReport 154/299 Microsoft Corporation commuting. Enterprise customers can collaborate across an integrated platform of e−mail, voicemail, calendaring, instant messaging, and tele−conferencing. Studies done in conjunction with Forrester Research shows UC can reduce travel by 10%, and as much as 30% when widely deployed across an organization. 4) Using Microsoft’s Business Intelligence (BI) solution, organizations can build custom scorecards to analyze, monitor and plan their Environmental Sustainability initiatives. The flexibility of Microsoft BI products allows users to configure data collection and reporting requirements to fit their needs. 5) Small and medium−sized businesses can measure and manage their carbon footprint from greenhouse gas emissions using Microsoft Dynamics AX and its integrated Environmental Sustainability Dashboard (available in 2009). 6) Microsoft® Virtual Earth™ platform allows customers insight into global trends and patterns through online maps and data. Geomatics, Sungevity, Infusion, the Environmental Protection Agency (EPA), and others have developed innovative environmental solutions on the Virtual Earth Platform. 7) Microsoft has recently released Clearflow to 72 cities in the US. Based on sophisticated algorithms developed by MSR, Clearflow enables drivers to find routes based on least traffic, thereby significantly reducing time on roads and pollution. Independent softwarepartners like ESRI and iLog have developed sophisticated algorithms for their SQL Server and .NET−based solutions which enable customers like Sears to reduce its fleet vehicle miles travelled by over 30%.

Additional information about software solutions that promote environmental sustainability can be found online at http://www.microsoft.com/environment/business_solutions.aspx.

Generated from OneReport 155/299 Microsoft Corporation Eco−Efficiency Data

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Eco−Efficiency Data Does Microsoft Corporation measure the eco−efficiency of its products and services, such as product energy ratings for electrical goods, or per passenger fuel consumption for air transport, or fleet efficiency of automobiles and fleet transport? Please provide the information requested below, including a list of the indicators used to measure eco−efficiency of Microsoft Corporation products. Where possible, please indicate a widely used sector benchmark indicator. There is an industry agreed sector metric Please (indicated) specify: There is no agreed metric, company has developed its own

Eco−efficiency indicator (please list): 2007 2006 2005 Target Industry average (if Comment available)

Is company planning to measure eco−efficiency of its products?

If so, when?

Generated from OneReport 156/299 Microsoft Corporation Product Contributions

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Product Contributions If Microsoft Corporation offers products or services that that contribute to solving environmental problems and achieving sustainable development, please describe below. Description of products or services that contribute to solving environmental problems and achieving sustainable development: Microsoft provides software tools and technology that help companies, organizations, and individuals reduce their energy use, travel, and other environmental impacts. As just a few examples:

1) Microsoft® Windows Server™ 2008 Hyper−V feature is designed to allow customers to reduce the number of physical machines (and thus energy use) without sacrificing performance. 2) Microsoft’s System Center software helps IT professionals proactively manage the energy consumption and environmental footprint of their physical and virtual IT environments. With its seamless integration to Microsoft’s operating systems, System Center optimizes resources and reduces energy consumption through: Progressive Group Policy management; Virtualization for server consolidation; and Centralized reporting and control. 3) Microsoft® Unified Communications (UC) solutions streamline communications and collaboration, reducing the need for business travel and commuting. Enterprise customers can collaborate across an integrated platform of e−mail, voicemail, calendaring, instant messaging, and tele−conferencing. Studies done in conjunction with Forrester Research shows UC can reduce travel by 10%, and as much as 30% when widely deployed across an organization. 4) Using Microsoft’s Business Intelligence (BI) solution, organizations can build custom scorecards to analyze, monitor and plan their Environmental Sustainability initiatives. The flexibility of Microsoft BI products allows users to configure data collection and reporting requirements to fit their needs. 5) Small and medium−sized businesses can measure and manage their carbon footprint from greenhouse gas emissions using Microsoft Dynamics AX and its integrated Environmental Sustainability Dashboard (available in 2009). 6) Microsoft® Virtual Earth™ platform allows customers insight into global trends and patterns through online maps and data. Geomatics, Sungevity, Infusion, the Environmental Protection Agency (EPA), and others have developed innovative environmental solutions on the Virtual Earth Platform. 7) Microsoft has recently released Clearflow to 72 cities in the US. Based on sophisticated algorithms developed by MSR, Clearflow enables drivers to find routes based on least traffic, thereby significantly reducing time on roads and pollution. Independent softwarepartners like ESRI and iLog have developed sophisticated algorithms for their SQL Server and .NET−based solutions which enable customers like Sears to reduce its fleet vehicle miles travelled by over 30%.

Additional information about software solutions that promote environmental sustainability can be found online at http://www.microsoft.com/environment/business_solutions.aspx.

Percentage of company revenue derived from these products or services:

Generated from OneReport 157/299 Microsoft Corporation Sold Products Packaging Reclaimed GRI EN27

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Sold Products Packaging Reclaimed GRI EN27 Percentage of products sold and their packaging materials that are reclaimed by category. Category of product % of reclaimed products and % of reclaimed products and % of reclaimed products and How data sold their packaging materials in their packaging materials in their packaging materials in was 2007 2006 2005 collected

Consumer electronics 17 and hardware

Additional Comments In 2007, Microsoft funded the collection and recycling of over 2.46 million kgs of consumer electrical and electronic goods. This represents approximately 17 percent of our year 2007 worldwide sales volume.

Generated from OneReport 158/299 Microsoft Corporation Sustainable Forestry

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Sustainable Forestry Please provide the information requested below regaring Microsoft Corporation's production, sourcing, and sale of sustainable forest and wood products, uploading relevant documentation. Ratio of sales of timber products, including paper, from sustainable forestry (e. g. FSC−labeled):

Timber in supply chain certified to a certification scheme: Percentage Please provide certified details:

Independently certified as meeting FSC (forest Stewardship Council) standards or covered under % associated chain of custody certifications:

Certified to SFI: %

Certified to PEFC: %

Certified to CSA: %

Certified to some other certification scheme, Please % specify:

Targets and programs to increase percentage of certified (FSC, PEFC, CSA, SFI) pulp/wood of total consumption/production:

Generated from OneReport 159/299 Microsoft Corporation Green Tariff

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Green Tariff Please answer the questions below regarding Microsoft Corporation's renewable energy provisions and green tariffs. Please refer to the Guidance Notes if needed. Percentage of company's energy provision sourced from renewable energy sources:

Does company's renewable energy provision exceed the regulatory obligation (if any) in relevant country? (e.g. UK Government's Yes Renewables Obligation) No

Please provide details of any regulatory requirements on the use of renewable energy

Does the company offer a green tariff to all customers? Yes No

If Yes to the above question, does it cost more than the standard tariff? Yes No

What proportion of the energy supplied is guaranteed to be matched with renewable generation?

Generated from OneReport 160/299 Microsoft Corporation Environmental Liability

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Products and Services / Environmental Liability Please indicate the amount accrued for environmental liability and the estimated amount in environmental remediation liability in the table below, and upload documentation as to the nature of the remediation that Microsoft Corporation has undergone. Currency: FY 2007 FY 2006 FY 2005

Total environmental liability 0 0

Accruals for environmental remediation 0 0

Company is a potentially responsible party (PRP) for one or more hazardous waste sites: No

Total number of hazardous waste sites: none

Total number of Superfund sites: none

Generated from OneReport 161/299 Microsoft Corporation Aspect: Compliance

Environmental Law Non−compliance GRI EN28

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Compliance / Environmental Law Non−compliance GRI EN28 Monetary value of significant fines and total number of non−monetary sanctions/convictions for non−compliance with environmental laws and regulations. Currency: 2007 2006 2005 2004

Total monetary value of significant fines

Total number of non−monetary sanctions

Cases brought through dispute resolution mechanisms

Generated from OneReport 162/299 Microsoft Corporation Aspect: Transport

Transport Impact GRI EN29

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Transport / Transport Impact GRI EN29 Significant environmental impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the workforce. Report the significant environmental impacts of transportation used for logistical purposes and for transportation of members of the organization's workforce. Where quantitative data is not stated, disclose the reason: Microsoft owns and operates a free shuttle system in the Puget Sound region which transports employees between the buildings. Approximately 50% of the vehicles in the fleet are small gas electric hybrids. There is a net positive environmental impact resulting from operation of the Microsoft Shuttle system. The shuttle system also transports employees between their offices and the local public transit center. Thus, the Shuttle system encourages employees to use public transportation to commute to work as they have the ability to use the shuttle system during the day to move between buildings for business meetings. As well, people who do drive their own cars to work, can leave them parked and use the shuttles to get to and from meetings. This measurably reduces local road congestion as well as emissions which occur during short trips when a car is in a warm up mode.

Microsoft has insituted a free full size bus commute assistance program to augment the local public transportation system. 12 full size charter buses are used to transport employees from suburban and exurban locations reducing road congestion and the use of fossil fuel.

Indicate the criteria and methodology used to determine which environmental impacts are significant:

Report how the environmental impacts of transporting products, members of the organization's workforce, and other goods and materials are mitigated:

Generated from OneReport 163/299 Microsoft Corporation Aspect: Overall

Environmental Protection Expenditures GRI EN30

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / Environmental Protection Expenditures GRI EN30 Total environmental protection expenditures and investments by type. Currency: 2007 2006 2005

Waste disposal

Emissions treatment

Remediation

Prevention

Environmental

Total environmental protection

Generated from OneReport 164/299 Microsoft Corporation Environmental Responsibility

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / Environmental Responsibility Please supply information below about the environmental management/oversight structure at Microsoft Corporation. Please upload any relevant supporting documents.

Please check Guidance Notes. Role and responsibility

Is there a board member with responsibility for Yes environmental policy? No

Is there an Environmental Committee? Yes No

Please indicate the title of the company's Chief Research and Strategy Officer highest−ranking officer/manager responsible for environmental isues:

Are there executive officers with explicit environmental Yes Corporate VP, responsibilities at all major business units? TWC No

Is there an environmental department director Yes manager/coordinator (senior management) who is responsible for the company's environmental policies?

Is there an environmental department director Yes manager/coordinator (non−senior management) who is responsible for the company's environmental policies?

Number of employees in environmental department 9 in Corporate Environmetnal sustainability department, plus several dozen mebers of the Environmental Sustainabitiy Virtual Team

Contact info for environmental department Agnies Watson Microsoft Corporation One Microsoft Way Redmond, Wa 98052 425/725−8635

Is there an environmental working group? Yes No

If specific responsibility is allocated for climate Board member Levels from 2 C11 change−related issues, please select the highest level of CEO responsibility: Board (main board or board (0=direct to committee) CEO): Corporate environmental manager/coordinator Environmental committee Environmental department director Business unit level manager None Other Please specify: C11 At Microsoft we refer to climate change−related matters as sustainability.

Generated from OneReport 165/299 Microsoft Corporation Generated from OneReport 166/299 Microsoft Corporation EMS

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / EMS Please indicate whether Microsoft Corporation has implemented an Environmental Management System (EMS). Please upload a full description of Microsoft Corporation's EMS, including managerial structure, responsibility and procedures, and number of employees in environmental management positions. If Microsoft Corporation does not have an EMS, please upload a full description of any systems in place for managing environmental issues. Select all that apply to Microsoft Corporation's EMS below. Percentage of company to which the EMS applies: 100%

Select the indicator to which the figure above applies: Turnover/Revenue Production Sites Employees

Company has not implemented an EMS Applies worldwide Applies in non−OECD countries Has no internal audits Contains specific goals and objectives Has management incentives Has publicly disclosed external audits certified by third party Includes an environmental policy ** Includes identification and evaluation of key impacts and/or aspects Please specify: ** Sets measurable quantitative objectives and targets Please specify: ** Auditing/screening of suppliers/contractors Please specify: ** Has documented structure and procedures Please specify: ** Includes monitoring and auditing Please specify: ** Includes an internal reporting and management review Please specify: Staff training and awareness measures ** Includes systematic environmental impact assessment (EIA) Please specify: Conducts periodic management reviews of the EMS Please specify: Applies to a percentage of company's activities Please specify: * A decentralized environmental database or information system * A centralized, group−wide environmental database or information system * Environmental database or information system embedded in group−wide risk management system/framework * Direct environmental data of own business operations tracked * Indirect environmental risks/issues related to lending, investing, underwriting, if possible Please indicate number of years tracking this data: specify:

Generated from OneReport 167/299 Microsoft Corporation * No EMS database or information system

List the business units to which EMS applies: All

Generated from OneReport 168/299 Microsoft Corporation EMS Certification

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / EMS Certification Microsoft Corporation's Environmental Management System (EMS) is certified/verified/audited or employs the following external management systems, by percentages as indicated in the table below.

If not applicable, please indicate in the No Data section and explain in Additonal Comments. Name of Certification System Percent certified for Percent certified in current Target certification by current reporting year reporting year by NEXT reporting year

All EMS Systems % Facilities/Sites Turnover/Revenue Production Employees

ISO 14001 %

EMAS (European Eco−management and % Audit Schemes)

JIS Q14001 %

Responsible Care %

Certification by third party or specialized % companies:

ISO 14001 JIS Q 14001 EMAS Other EMS audits/verification

Certification by company's internal % personnel or specialists from headquarters:

ISO 14001 JIS Q 14001 EMAS Other EMS audits/verification

Percent of total revenues generated from assets % under EMS control

Environmental management system is not C16 verified/audited/certified C16 Microsoft has implemented a corporate−wide EMS. ISO 14001 certification will be sought in our FY08/calendar year 2008.

Generated from OneReport 169/299 Microsoft Corporation Overall Monitoring

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / Overall Monitoring Please upload descriptions of any systems Microsoft Corporation has to measure and monitor its environmental performance and targets. Indicate in the table below the indicators, or categories of indicators, used for measuring and monitoring, and the years for which these are used. Provide a target date for the use of these indicators if applicable and indicate if baseline data have been established. Indicator used Units % coverage 2007 2006 2005 Baseline data established Target % of company this covers

Generated from OneReport 170/299 Microsoft Corporation Environmental Training

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / Environmental Training Does Microsoft Corporation conduct any of the following with respect to environmental training? If yes, % of Pilot projects Training time company in covered person−hours per year

Environmental In person environmental training has not been given to every employee 1.5−6 C2 training of at Microsoft, but we have conducted in−person training to those employees employees whose day−to−day work has direct environmental impact. However, our Environmental intranet site has a link where employees can sign up for environmental training, so such training is available to all employees. In addition, we are developing EMS awareness training.

Communicate with 100% We have an intranet site devoted to environmental matters that is employees on available to all Microsoft employees environmental issues

Environmental All new A brief discussion of environmental issues is included as a part of the 1.5−6 C4 training provided to E&D overall New Employee Orientation program. In additon to the NEO all new employees training, each business division is responsible for providing supplemental and specific training to its new employees, including those whose work has direct relevance to environmental impacts. Additionally, any employee can request environmental training through the Environmental site on our intranet.

Advanced training 100% Environmental employees receive in−house and outside advanced 40 programs training. C2 Training time depends on Function − % of company covered not reported. C4 Training Time depends on function

Generated from OneReport 171/299 Microsoft Corporation Eco−Efficiency Rate

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / Eco−Efficiency Rate The data below will be used as denominators to produce eco−efficiency ratios. Please provide data that Microsoft Corporation considers appropriate for this purpose, leaving blank the areas that are not appropriate in Microsoft Corporation's case.

The data should relate to the same operations as the data on energy, waste emissions, etc. Please explain in Additional Comments if Microsoft Corporation has developed internal conventions regarding the most appropriate data to use in eco−efficiency calculations (please provide data for last three reporting years). Company wide Units 2007 2006 2005

Volume of production or services

Number of FTE

Floor space area

Revenue

Operations covered Units 2007 2006 2005

Volume of production or services

Number of FTE

Floor space area

Revenue

Generated from OneReport 172/299 Microsoft Corporation Environmental Report

5. Management Approach and Performance Indicators / Environmental / Environmental Performance Indicators / Aspect: Overall / Environmental Report Please complete table below describing Microsoft Corporation's environmental reporting and upload a copy(ies) of the report. Publishes separate environmental report Frequency: Title: First issued: Last updated: % of company covered: % applies to one of the following − revenue, production, employees, or other (specify):

CSR report includes environmental reporting

Intends to publish separate environmental When? report

Publishes environmental information on Frequency: website Updated on a continual basis.

Publishes environmental information in % of company annual report covered:

Subsidiaries (> or = 50% owned) issue Details: % of overall separate reports company covered by separate reports:

Public reports are externally verified

Content of publication:

Environmental policies and principles

Environmental performance Please explain how data is recalculated for previous years to % of company account for acquisitions, disposals, plant closures, or changes operations in methodology: covered: Please explain the level of verification/quality assurance of the % applies to one data, and how this is expected to change in future years: of the following − revenue, production, employees, or other (specify): If less than 100%, the following operations are not covered:

Follows Global Reporting Initiative to disclose environmental performance

Reports to shareholders on exposure to and management of climate change risks

Supporting Documentation:

Generated from OneReport 173/299 Microsoft Corporation 2004 Citizenship Report Page #: View 2005 Citizenship Report Page #: View 2006 Citizenship Report Page #: View CDP4 Report Page #: View Citizenship − Environmental Impact Page #: View Citizenship − Environmental Principles Page #: View Environmental Web Page Page #: View

Generated from OneReport 174/299 Microsoft Corporation Labor Practices and Decent Work

Labor (Optional)

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor (Optional) / Labor (Optional) This optional data request is provided to allow Microsoft Corporation to report data or information regarding Labor issues that is not specifically requested by research firms. You may add introductory or summary information, or cover specific items not addressed by research firms.

Generated from OneReport 175/299 Microsoft Corporation Labor Practices and Decent Work: Disclosure on Management Approach

Vendor Policy

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Vendor Policy Does Microsoft Corporation have a policy and a system for dealing with suppliers? (i.e., the treatment of suppliers and not supply chain labor standards) Please upload a copy of the policy and any relevant details or examples. Company has a policy If publicly available, please provide web address. If not available, please provide details of policy: on standards for dealing MS Procurement Code of Professional Conduct with suppliers, and it is This Code of Professional Conduct applies to anyone at Microsoft who is involved in procurement or supply publicly available chain management activities e.g., negotiating contracts, managing vendor relationships, and monitoring service delivery. These activities are typically performed by employees with such titles as Vendor Account Company has a policy Managers, Category Managers, Supply Chain Account Managers, and Logistics Managers. The purpose of on standards for dealing this Code is to provide employees with an awareness of the guidelines for acceptable conduct as they apply with suppliers, but it is specifically to procurement and supply chain management at Microsoft. Employees are expected to fully not publicly available understand and abide by this Code. Company does not have a policy on standards for dealing with suppliers

Percentage of company covered regarding items below: Percentage of suppliers covered regarding items below:

Systems to Support Supplier Comments and Examples: Relations

Regular supplier approximately 2300 vendors who account for 75% of our total spend satisfaction surveys

Clear mechanisms for We give email and fax contact info to all of our suppliers so that they can discuss any concerns with us. We supplier complaints also have a confidential feedback system in place if they prefer that method.

Please explain how We developed a global rollout of a more formal internal procurement system. "Buy Centers" were created relationships with suppliers where all purchase orders are reviewed for accuracy. This allows for more accurate purchase orders and have improved: serves as a single point of contact for the vendors.

Generated from OneReport 176/299 Microsoft Corporation Labor Practices Disclosure on Management Approach GRI LA

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Labor Practices Disclosure on Management Approach GRI LA DISCLOSURE ON MANAGEMENT APPROACH Provide a concise disclosure on the following Management Approach items with reference to the Labor Aspects listed below. The ILO Tripartite Declaration Concerning Multinational Enterprises and Social Policy (in particular the eight core conventions of the ILO) and the Organisation for Economic Cooperation and Development Guidelines for Multinational Enterprises, should be the primary reference points.

• Employment; • Labor/Management Relations; • Occupational Health and Safety; • Training and Education; and • Diversity and Equal Opportunity.

Generated from OneReport 177/299 Microsoft Corporation Labor Policy

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Labor Policy Does Microsoft Corporation have a policy, set of principles, or code of conduct regarding labor standards and/or employee relations? If so, please upload supporting documentation, including date policy was created, and when it was last updated. Check all that apply below. Policy applies to all of the company's operations (including world−wide) Policy applies to all of the company's U.S. operations Policy applies to all of the company's non−U.S. operations Policy applies to contract operations Policy applies to supplier's operations Policy addresses employee rights Policy addresses freedom of association Policy meets ILO minimum standards The company publishes policies/principles regarding employees Policy applies to a percentage of company's employees Please specify:

Supporting Documentation: Microsoft − Standards of Business Conduct Page #: View

Generated from OneReport 178/299 Microsoft Corporation HSFocus

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / HSFocus Which of the following does Microsoft Corporation's health and safety systems provide for? Please upload evidence or examples of each. Staff training on health and safety Clear targets for health and safety improvements Regular monitoring of key performance indicators (KPIs) Ongoing identification of hazards/risks identification Other: Please specify:

Supporting Documentation: SHTraining Page #: View

Additional Comments Safety and health training program is currently being updated; new program will be launched during FY09.

The buildings are actively monitored for temperature and air dilution. EHS monitors on a request basis for: • Lighting surveys in offices and in parking garages • Appropriate signage on building and parking garages • Noise assessments in offices and other facility spaces • Indoor air quality (Temp. Relative Humidity, Carbon Monoxide, Carbon Dioxide) • Monitor for Electromagnetic Fields in the workplace • Monitor chemicals/materials brought on campus to be used in buildings (Material Safety Data Sheets) • Investigate reported facility related accidents and injuries • Survey reported traffic safety issues • Address facility related safety issues not covered anywhere else • Assist with facility related smoking issues

Generated from OneReport 179/299 Microsoft Corporation HSPolicy

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / HSPolicy Does Microsoft Corporation have a policy or code of conduct addressing health and safety, and wellness, in the workplace? If so, please upload documentation, and fill out the table below regarding these policies. When When % of workforce % of operations created updated affected affected

Worldwide policy/code Yes May 15, June 26, % 100 % 100 C2 2003 2006 No

US policy/code only Yes May 2006 % 100 % No

Non−US policy/code only Yes % % No

Does the policy address relevant company activities Yes and significant impacts or issues identified? No

Is the policy approved by the relevant board? Yes No

Is the policy statement available throughout the Yes company? No

Is the policy regularly reviewed and updated? Yes No

Is the policy publicly available? Yes No

Is the policy applicable to contractors? Yes No C2 The Microsoft Standards of Business Conduct are a general guide to the company's standards of business practices and regulatory compliance. Its requirements apply to Microsoft Corporation, to all subsidiaries, or affiliates in which Microsoft Corporation directly or indirectly owns more than 50 percent of the voting control ("Controlled Affiliates"), and to all directors, officers, and employees of each. All references to "Microsoft" include Microsoft Corporation and all Controlled Affiliates unless otherwise specified. All references to "employees" include directors, officers, and employees of Microsoft Corporation and it subsidiaries or affiliates.

Supporting Documentation: Microsoft − Standards of Business Conduct Page #: View

Additional Comments As stated in Microsoft Corporation's Standards of Business Conducts, Safety and Health section: A safe and clean work environment is important to the well−being of all Microsoft employees. Microsoft complies with applicable safety and health regulations and appropriate practices.

Generated from OneReport 180/299 Microsoft Corporation Equal Opp Policy

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Equal Opp Policy Does Microsoft Corporation have a written policy that addresses equal employment opportunity and diversity? If yes, please upload this policy. Include any information about monitoring systems in place to ensure compliance, including results of that monitoring, in Additional Comments and/or upload relevant documents. Please indicate below if any of the following are included in the policy.

If company coverage of the policy is less than 100%, please explain in Additional Comments. Age Child care facilities/subsidy Disability Flexible working hours Job sharing Gender Ethnic or social origin Sexual orientation Sabbatical/career breaks Religion Race Other Please specify: Veteran Status, Marital Status, Gender Identity and Expression Company has set management objectives on diversity Policy and its outcomes are regularly reviewed Policy applies to indicated percentage of Please specify: the company Policy is publicly available Please specify: As part of Standards of Business Conduct No such policy; company plans to Please specify: implement one by (date):

Percentage of company covered by equal opportunity policy: 100

Supporting Documentation: Standards of Business Practice Page #: View

Additional Comments As a global company, Microsoft Corporation employs people from more than 136 different countries and regions. Microsoft Corporation works actively to promote and support a wide range of diverse employees in each location of operation worldwide. Specific diversity policies and practices vary from location to location. Microsoft also has internal policies on flexible work hours and arrangement that are particular to the specific country in which employees work.

Generated from OneReport 181/299 Microsoft Corporation Eliminate Discrimination

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Eliminate Discrimination If Microsoft Corporation is a member or supporter of any external organization that seeks to eliminate discrimination, please list the organizations. Please see the supporting documents for a sample of external organizations we work with.

Supporting Documentation: Partners and Outreach Page #: View

Generated from OneReport 182/299 Microsoft Corporation Diversity Management

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Diversity Management Does Microsoft Corporation have a management structure to enhance equal opportunities? If yes, please upload Microsoft Corporation's diversity management structure, and select all that apply below. The company has developed a business case/formal management structure for working on diversity issues The company has a range of supportive activities for staff to promote diversity (development programs, mentoring schemes, career counseling, secondments, work shadowing, networks) The company communicates with employees on diversity/employment equity issues The company can track the take up from staff from different diversity strands who participate in the company's staff development programs (in jurisdictions where this is legally possible) Employee time allocated to diversity activities which are not part of the individual's full−time job description, such as equality and diversity representative roles, is measured and integrated into performance appraisals This management structure applies to the indicated percentage of the company Please specify:

Names of internal networks seeking to eliminate discrimination: See attached document

Please describe the senior officer in charge, department/task force/advisory council and procedures, diversity criterion in managers' performance evaluations, etc.:

Supporting Documentation: Diversity DAC Groups Page #: View

Generated from OneReport 183/299 Microsoft Corporation Women's Diversity

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work: Disclosure on Management Approach / Women's Diversity Does Microsoft Corporation have programs to support the hiring, retention, and promotion of women? Do these include any of the following? Please upload documentation, and select all that apply below. Programs % of employees affected

Mentoring available to all

Diversity training available to all

Affinity/networking groups available to all

Other:

Supporting Documentation: Diversity Programs &Initiataives Page #: View

Generated from OneReport 184/299 Microsoft Corporation Labor Practices and Decent Work Performance Indicators

Aspect: Employment

Total Workforce GRI LA1

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Total Workforce GRI LA1 Total workforce by employment type, employment contract, and region. % of operations included in data: 2007 2006 2005

Employees

Supervised workers

Total workforce 91,259 71,172 61,472

Total workforce by region

Home country 54,775 44,142

Employees in OECD countries (include home country if appropriate) 61,323 61,323

Employees in non−OECD countries (include home country if appropriate) 9,964

Total permanent employees by employment type

Full−time 70,549 70,549

Part−time 638 638

Total employees by employment contract

Indefinite or permanent contract

Fixed−term or temporary contract

Supporting Documentation: Microsoft − Annual Report Page #: View Microsoft − Fast Facts About Microsoft Page #: View

Generated from OneReport 185/299 Microsoft Corporation Turnover Rates

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Turnover Rates Please provide the following information about employee turnover: 2007 2006 2005

Employee Turnover Rate

% of company this covers

Voluntary turnover (% of total turnover)

Compulsory turnover (redundancies) (% of total)

Percentage of staff on fixed−term or temporary contracts

Net percentage job growth over the past three years (excluding growth through mergers and acquisitions)

Percentage of company covered by indicators

Is there a policy commitment to avoid or minimize compulsory lay−offs?

Generated from OneReport 186/299 Microsoft Corporation Employee Turnover GRI LA2

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Employee Turnover GRI LA2 Total number and rate of employee turnover by age group, gender, and region. % of operations included in data: 2007 2006 2005

Total number of employees leaving employment

Rate of employees leaving employment

Number and rate of employees leaving by gender

Number of men leaving

Rate of men leaving

Number of women leaving

Rate of women leaving

Number and rate of employees leaving by age group

Number of <30 age group

Rate of <30 age group

Number of 30−50 age group

Rate of 30−50 age group

Number of >50 age group

Rate of >50 age group

Number and rate of employees leaving by region

Number leaving in home country

Rate leaving in home country 7.6%

Number leaving in OECD countries (include home country if appropriate)

Rate leaving in OECD countries (include home country if appropriate) 7.7%

Number leaving in non−OECD countries (include home country if appropriate)

Rate leaving in non−OECD countries (include home country if appropriate) 10.7%

Supporting Documentation: Microsoft − Fast Facts About Microsoft Page #: View

Additional Comments Information on employee headcount is available on the company Web site.

Net Employee Creation − Regular Employees Excluding JVs. Data 6/2007 minus 6/2006 Attrition is based on 6/27/2007 archived report and excludes JVs.

Generated from OneReport 187/299 Microsoft Corporation Generated from OneReport 188/299 Microsoft Corporation Stock Option Statistics

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Stock Option Statistics Please provide data on the stock options and/or share ownership plans that are open to non−management employees. % of employees eligible 100

% of employees participating 90+

# of options/grant

Frequency of grants usually annually

Most recent grant 8/29/2008

Eligibility criteria Performance

Company's contribution NA

Administration costs of program covered and/or no−interest/low−interest loans available to purchase shares 100%

Generated from OneReport 189/299 Microsoft Corporation Cash Profit Sharing

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Cash Profit Sharing If Microsoft Corporation has cash profit sharing that is not part of an employee retirement account, please provide the data indicated below. 2007 2006 2005

Payouts made N/A N/A N/A

% of employees eligible

Generated from OneReport 190/299 Microsoft Corporation Pension Plan

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Pension Plan Does Microsoft Corporation offer a pension (occupational) or other retirement savings plan? In addition to the information requested below please comment on the criteria used to determine eligibility of an employee. The company has a pension plan

The pension plan includes defined benefit % funded: Eligibility:

The pension plan includes defined contribution % employer match: 50 Max % employee contribution 6 matched:

U.S Companies:

Company has a pension plan for U.S. employees: Yes

If yes, please provide information about the plan below:

It is a defined benefit plan It is a cash balance plan

Percentage of the plan that is funded:

Number of employees eligible to participate:

Company has a 401(K) savings plan: Yes

If yes, please provide information about the plan below:

Company makes matching contributions: Yes If yes, explain the matching scheme: 50% of first 6% deferred

Company makes defined contributions (no employee contribution required): No If yes, percentage of employee's salary that the company contributes:

Company makes profit−sharing or discretionary contributions: No If yes, explain the limit on these, if any:

Total the company contributed in the most recent fiscal year (total of matching, $156M defined, and discretionary/profit−sharing contributions in U.S. dollars):

Number of U.S. and non−U.S. employees eligible to participate: 51,500

Supporting Documentation: Microsoft Careers − Benefits − Overview Page #: View

Additional Comments Microsoft offers a Savings Plus 401(k) Plan to US employees. This plan lets employees defer up to 50 percent of pretax salary dollars. Microsoft matches 50 cents on every dollar up to 6 percent of employee contribution.

Generated from OneReport 191/299 Microsoft Corporation Work/Life Balance

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Work/Life Balance Does Microsoft Corporation have programs to improve the work−life balance of employees? Please upload documentation of such programs and provide data as requested below. If Microsoft Corporation provides maternity or paternity leave, please upload description of benefits beyond legislated requirements, including benefits to fathers and adoptive parents. Include eligibility criteria, indicate length of paid leave (maternity and paternity), if leave includes seniority, vacation accrual and/or other benfits such as pension contributions, health &drug, bonuses for employees in home country and worldwide. % of employees with access

Paid maternity leave % 100

Paternity leave % 100

Paternity leave − top−up/supplementary unemployment benefits above EI rate %

Maternity leave − full or partial salary paid during two−week waiting prior to EI benefits %

Maternity leave − top−up/supplementary unemployment benefits above EI rate %

Maternity leave covered through company's short−term disability plan %

Seniority accrues during parental leave %

Vacation accrues during parental leave %

Other benefits (e.g. pension contributions, health & drug, bonuses) continue during leave %

Child daycare on site/facility %

Phase−back for new parents %

Lactation programs % 100

Social helpdesk − full time work/family benefits manager %

Elder care programs % 100

Resource/referral for child and elder care % 100

Flexible work schedules (e.g. annual working time, gliding time/flex time) for executive staff %

Flexible work schedules (e.g. annual working time, gliding time/flex time) for non−executive staff %

Job−sharing %

Telecommuting %

Compressed work weeks %

Personal and/or compassionate leaves of absence %

Adoption assistance % 100

Adoptive parent leave − top−up/supplementary unemployment benefits above EI rate %

Flexible spending accounts % 100

Generated from OneReport 192/299 Microsoft Corporation Subsidies for child care % 95

Family service referral service %

Other innovative models Please specify: National Family Back Up % 100 Care

Supporting Documentation: Microsoft Careers − Benefits − Overview Page #: View

Additional Comments Other innovative models: • National Family Back Up Care for healthy/sick children, adults and elders • Babies &You seminars in partnership with March of Dimes • Transition Back to Work seminar after Maternity Disability &Parental Leave • Near site childcare with School’s Out programs for children 6 – 12 • Welcome Baby Box – gifts to all new Microsoft babies • Educational book/CD to expecting parents • EAP offering Family and Personal Counseling Sessions and 2 day Martial Workshop • Resource Referral Service with a focus on customized child and eldercare

Generated from OneReport 193/299 Microsoft Corporation Employee Benefits GRI LA3

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Employee Benefits GRI LA3 Benefits provided to full−time employees that are not provided to temporary or part−time employees, by major operations. Life insurance Health insurance Medical care for employee families Accident insurance Disability/invalidity insurance Mortgages and loans Pension plans/retirement provision Maternity and/or paternity leave Child care Employee assistance program Job security initiatives for redeployment, including retraining, relocation, work−sharing and outplacement services Flexible workschemes and work−sharing Recall rights for laid−off employees Stock ownership Others Please specify: No additional benefits offered

Supporting Documentation: Microsoft − Worldwide Careers Page #: View Microsoft Careers − Benefits − Overview Page #: View

Additional Comments Microsoft Corporation's offers competitive and generous employee benefits which vary by country of operations. More information on specific benefits in each country or region of operations can be found on the company Web site. Also, the Microsoft Careers site provides details of the Benefits programs available to U.S. employees.

Others specific to US: • Employees and their eligible family members have no co−pay or deductibles under Microsoft's Health Care Plan. • We offer Severance Plan Benefits when an employee loses their job due to no fault of their own. Employees receive generous outplacement services with these benefits. • Employees can receive up to 24 weeks of Paid STD leave (26 in some states) • Microsoft pays the Long Term Disability premium for our employees • Employees can take up to 12 weeks of Parental (Paternity) leave for the birth or placement of a child. 4 weeks paid at 100% of base salary/8 weeks unpaid • Women can take up to 20 weeks of leave for Maternity/Parental. 8 weeks paid at 100% and 12 weeks of Parental (Paternity) leave. 4 weeks paid at 100% of base salary/8 weeks unpaid • Microsoft reimburses up to $5,000 for eligible adoption expenses • National Family Back Up Care for health/sick children, adults and elders • Babies &You seminars in partnership with March of Dimes • Transition Back to Work seminar after Maternity Disability &Parental Leave • Near site childcare with School’s Out programs for children 6 – 12 • Welcome Baby Box – gifts to all new Microsoft baby’s • Educational book/CD to expecting parents • EAP offering Family and Personal Counseling Sessions and 2 day Martial Workshop • Resource Referral Service with a focus on customized child and eldercare • ESPP − Employee Stock Purchase Plan offering

Generated from OneReport 194/299 Microsoft Corporation Employee Satisfaction

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Employment / Employee Satisfaction Please indicate below the satisfaction level of your employees based on your company's employee satisfaction surveys, and upload relevant documentation. Company conducts regular employee Yes satisfaction/opinion surveys

If yes, how often? annually C2

Employee response rate (%): 80%

Number of employees involved: 84,000

Specific follow−up action the company takes based on results: Data are delivered to over 7500 individual managers. Most of these create individual action plans on the basis of their data. This action planning process occurs at multiple levels of the organization. Enterprise−level actions depend on key findings. In the past, these have been ranged from fairly small, like increased direct communication on our strategy from the CEO, to fairly significant, like multi−million dollar investments in employee development.

2007 2006 2005 2004 Explanation of trend

Employee satisfaction, e.g. committed, motivated, 84% 83% 79% 84% Very high and stable at that level. Dip in satisfied employees (100% equals maximum 2005 due to change in approach to satisfaction level) developing major product

Percentage of employees covered through employee 100% 100% 100% 100% surveys

No employee satisfaction trend analysis C2 We do an annual census survey.

Additional Comments

Generated from OneReport 195/299 Microsoft Corporation Aspect: Labor/Management Relations

Union Representation

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Union Representation Does Microsoft Corporation have unionized employees? Please fill out the table below, giving information about the percentage of the workforce unionized and the location of unionization, including names of unions. If unionization is not permitted, please indicate whether it is a company or national policy. Please upload documentation. Does your company have unionized employees? Yes If no, the reason company is: policy No national policy other

Does your company cooperate with independent associations/trade unions on a Yes regular basis? No

% home country employees who are unionized Names of unions:

% of non−home country employees who are unionized Names of unions:

% of total employees who are unionized

Generated from OneReport 196/299 Microsoft Corporation Collective Bargaining Coverage GRI LA4

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Collective Bargaining Coverage GRI LA4 Percentage of employees covered by collective bargaining agreements % of workforce covered by collective bargaining agreement 2007 2006 2005 Type of collective bargaining agreement

Home country national industry enterprise

Worldwide national industry enterprise

Generated from OneReport 197/299 Microsoft Corporation Strikes/Unions

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Strikes/Unions Has Microsoft Corporation experienced strikes, lockouts, failed contract negotiations, or other labor issues in the past five years? Please indicate below. Type of labor issue (strike, lockout, failed contract, other)

No Data Provided because: Not Applicable

Additional Comments Responses reflect operations in the U.S.

Generated from OneReport 198/299 Microsoft Corporation Notice Operational Changes GRI LA5

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Notice Operational Changes GRI LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements. Minimum number of weeks notice typically provided to employees and their elected representatives prior to the implementation of significant operational charges that could substantially affect them:

For organizations with collective bargaining agreements, are the notice period and/or provisions for consultation and negotiation specified in collective agreements?

Generated from OneReport 199/299 Microsoft Corporation Labor Participation

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Labor Participation Has Microsoft Corporation implemented any participative management programs? If so, please upload and provide the information requested below, including whether these include Labor Management Cooperative Work Groups. Program type % of employees covered

Company has employee participative management programs

Company has Labor Management Cooperative Work Groups

Company has other means to ensure input from employees in formulating policies, meeting objectives/targets, improving processes, etc.

No Data Provided because: Not Applicable

Generated from OneReport 200/299 Microsoft Corporation Employee Involvement

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Employee Involvement Please indicate the extent of Microsoft Corporation's employee surveys? Employee surveys are conducted annually

Generated from OneReport 201/299 Microsoft Corporation Unfair Labor

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Labor/Management Relations / Unfair Labor Has Microsoft Corporation been cited, pled guilty to, or found guilty of any violations of unfair labor practices or the National Labor Relations Act in the past two years? Please provide information in the table below. 2007 2006 2005

Type of Violation

Fine/Settlement

No Data Provided because: Other

Additional Comments Microsoft Corporation has not been cited, pled guilty to, or found guilty of any violations of unfair labor practices or the National Labor Relations Act in the past two years.

Generated from OneReport 202/299 Microsoft Corporation Aspect: Occupational Health and Safety

HSReporting

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / HSReporting Does Microsoft Corporation publish a report for employees on health and safety, and disclose its workplace safety record in the annual report or in another form accessible to shareholders? Please enter your responses below and provide documentation. Separate employee report No Included in annual report No Included in CSR report No Other form/shareholders No

Generated from OneReport 203/299 Microsoft Corporation HSTargets

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / HSTargets Does Microsoft Corporation have specific occupational, health and safety/wellness goals, objectives, or performance targets? If yes, please mark all that apply and upload any additional information. % coverage across overall business

Performance improvement targets have been set for business operations 0 % 1−25% 26−50% 50−75% >75%

Targets were achieved across the business last reporting year 0 % 1−25% 26−50% 50−75% >75%

Targets are in the public domain 0 % 1−25% 26−50% 50−75% >75%

Performance against targets are in the public domain 0 % 1−25% 26−50% 50−75% >75%

The company's main targets are:

No Data Provided because: Other

Additional Comments Within the U.S. we do not have specific health and safety/wellness goals, objectives, or performance targets tied back to the business.

Generated from OneReport 204/299 Microsoft Corporation OSHA Participation

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / OSHA Participation Does Microsoft Corporation participate in the OSHA Voluntary Protection Program (VPP)? If so, please indicate the number of OSHA STAR sites. Please include other relevant information about this program in Additional Comments. Company participates in in the OSHA Voluntary Protection Program (VPP) No

Number of OSHA STAR sites:

Generated from OneReport 205/299 Microsoft Corporation HSAwards

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / HSAwards Please supply details of certified OHS systems used and recognized health and safety awards won. Name of Award/Certification Awarding Body

Generated from OneReport 206/299 Microsoft Corporation Health &Safety Committees GRI LA6

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / Health &Safety Committees GRI LA6 Percentage of total workforce represented in formal joint management−worker health and safety committees that help monitor and advise on occupational health and safety programs. The percentage of the total workforce represented in formal joint management−worker health and safety committees: Over 75% Between 50% and 75% Between 25% and 50% Up to 25% None

Explain the level(s) at which the committee(s) typically operates (e.g., at facility level and/or at multi−facility, region, group, or company levels). This may either be a result of a formal policy, procedure, or informal practice within the organization:

Generated from OneReport 207/299 Microsoft Corporation Injury Fatality Rates GRI LA7

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / Injury Fatality Rates GRI LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work−related fatalities by region. Please include industry benchmarks, if available, in Additional Comments. % of workforce covered by this data: Measure 2007 2006 2005 2004 Not Please tracked explain trend

Lost time illness rate

Lost time injury rate − employees

Lost time injury rate − contractors

Recordable incident rate

Lost time incident rate

Number of fatalities − employees

Number of fatalities − contractors

Occupational illness/disease rate

Breakdown by region 2007 2006 2005 2004

Home country

Total workforce (employees + supervised workers)

Independent contractors working on−site to whom the reporting organization is liable for the general safety of the working environment

Injury rate (includes fatalities)

Occupational diseases rate

Lost day rate

Absentee rate

OECD countries (including home country if appropriate)

Total workforce (employees + supervised workers)

Independent contractors working on−site to whom the reporting organization is liable for the general safety of the working environment

Injury rate

Occupational diseases rate

Lost day rate

Absentee rate

Generated from OneReport 208/299 Microsoft Corporation Non−OECD countries (including home country if appropriate)

Total workforce (employees + supervised workers)

Independent contractors working on−site to whom the reporting organization is liable for the general safety of the working environment

Injury rate

Occupational diseases rate

Lost day rate

Absentee rate

Generated from OneReport 209/299 Microsoft Corporation Disease Education Programs GRI LA8

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / Disease Education Programs GRI LA8 Education, training, counseling, prevention, and risk−control programs in place to assist workforce members, their families, or community members regarding serious diseases. Serious Disease Assistance Program Recipients Education/Training Counseling Prevention/Risk Treatment Control

Workers Yes Yes Yes

Workers' families Yes Yes Yes

Community members

Report whether there are workers who are involved in occupational activities who have a high incidence or high risk of specific diseases:

Additional Comments Ongoing Pandemic Planning Efforts: With a large cross group team of SME’s from across the company, Microsoft put a global Pandemic plan in place in early 2006. In June of 2007, we added a Post Wave Recovery section, completing the plan. Our ongoing education strategy includes an internal Influenza Readiness website which includes FAQ’s on Seasonal, Avian and Pandemic flu, information on personal hygiene measures, important travel guidance, such as how to reduce the risk of illness during and after international travel. It also provides access to global websites that provide updates on Avian flu activities in specific regions, information on Microsoft’s plan and ongoing planning efforts as well as resources on disaster preparedness in general. On an ongoing basis, we continue to engage experts on the Pandemic topic from our local health department and International SOS, our Worldwide Emergency Assistance vendor.

Other Preventative Measures: Other flu and communicable disease prevention measures include offering seasonal flu shots onsite at many U.S. locations to benefits−eligible employees, spouses, same−sex domestic partners, and dependents age 18 and over. These are offered free of charge on an annual basis. They are also offered in some countries to employees onsite where possible. Additionally, in the U.S. Microsoft has a team of Case Managers aligned to each business group. When we have a communicable disease issue, such as TB, we work closely with public health authorities to identify people who have been in contact with the person in the workplace, educate them and their family members about the disease and recommend whether or not they should be tested.

Generated from OneReport 210/299 Microsoft Corporation HSViolations

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / HSViolations Please report, in the table below, any health and safety incidents, controversies, fines or convictions (including any under the US Occupational Safety and Health Administration− OSHA− or other similar federal or state organization) in the last three fiscal years. 2007 2006 2005 2004

# Amount # Amount # Amount # Amount (US$) (US$) (US$) (US$)

Total H&S 136 OSHA 168 OSHA 161 Incidents/Violations Recordable recordable recordable incidents incidents incidents

Total Controversies 0

OSHA and Government 0 Administration Convictions

OSHA and Government 0 Administration Fines

Other Convictions 0

Other Fines 0

Settlements 0

Generated from OneReport 211/299 Microsoft Corporation Trade Union Health &Safety GRI LA9

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Occupational Health and Safety / Trade Union Health &Safety GRI LA9 Health and safety topics covered in formal agreements with trade unions. Formal agreements (either local or global) with trade unions cover health and safety:

If yes, the extent to which various health and safety topics are covered by local and global agreements:

No Data Provided because: Not Applicable

Generated from OneReport 212/299 Microsoft Corporation Aspect: Training and Education

Training Information

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Training and Education / Training Information Please provide information on Microsoft Corporation's employee training programs as requested below. Include details about the programs in Additional Comments and upload relevant documentation. % of company coverage 2007 2006 2005

Total budget for training (specify currency) 325,266,000 US 325,000,000 330,700,000

Average amount spent on training per employee (specify currency) 3,760 US 3,759 US 4,658 US

Average number of paid training days per employee 5 5 5

Average number of paid training days per full time male employee 5 5 5

Average number of paid training days per full time female employee 5 5 5

Proportion of employees that have a training and development review each year 100% 100% 100%

Average number of paid training days per board member NA NA NA

Other: Please specify:

Generated from OneReport 213/299 Microsoft Corporation Average Hours Training GRI LA10

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Training and Education / Average Hours Training GRI LA10 Average hours of training per year per employee by employee category. Employee category Average hours of training per Average hours of training per Average hours of training per employee 2007 employee 2006 employee 2005

Senior Management 40 40 40

MiddleManagement 60 60 60

Professional 40 40 40

Technical 120 120 120

Administrative 35 35 35

Production 27 27 27

Maintenance NA NA NA

Generated from OneReport 214/299 Microsoft Corporation Skills Management Program GRI LA11

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Training and Education / Skills Management Program GRI LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. The Microsoft Career Model addresses career counseling needs for employees through a rich set of tools that drive candid and meaningful conversations throughout the year between managers and employees about career progress and development. The Career Model includes three tools, each focusing on: • Competencies that appropriately map to each employee's profession and career path. • Career stage profiles that define what "good" looks like in each stage of an employee's career, and what career paths are available. • An "experiences grid" that defines the type of job experiences that are best for developing a pipeline of future Microsoft leaders.

To help leaders and employees make effective use of the tools, both classroom training (led by leaders) and e−learning modules are provided to coach employees through the process of career conversations from the perspective of managing and being managed.

To ensure the conversation takes place, a mid−year review has been established that is focused on an individual's development. It includes: • Discussion between the manager and employee on immediate goals and how they correlate to the long−term career aspirations of the employee and organization. • An assessment of each employee's strengths and development needs to determine where an employee should focus their short−term and long−term development activities. • Proactive managerial help and guidance to course−correct and develop performance before the annual performance review.

We believe that this level of competency assessment feedback helps each employee with rich individual development and career plans, and have found that follow−up discussions with managers continue throughout the year.

Generated from OneReport 215/299 Microsoft Corporation Formal Review GRI LA12

Percentage of total employees who received a formal performance appraisal and review 100%

Generated from OneReport 216/299 Microsoft Corporation Aspect: Diversity and Equal Opportunity

EEO−1 Report

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / EEO−1 Report Does Microsoft Corporation make its EEO−1 data publicly available, or publish an equal opportunity or diversity report? If so, please upload the report. Company makes its EEO−1 data publicly available or publishes an equal opportunity or diversity report: No

Generated from OneReport 217/299 Microsoft Corporation Minority Diversity

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Minority Diversity Does Microsoft Corporation have programs to encourage the hiring, retention, and promotion of minorities? Do these include any of the following? Please upload documentation and select all that apply below. Programs % of employees affected

Mentoring available to all

Diversity training available to all

Affinity/networking groups available to all

Other:

Supporting Documentation: Diversity Programs &Initiatives Page #: View

Generated from OneReport 218/299 Microsoft Corporation Disabled Diversity

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Disabled Diversity Does Microsoft Corporation have programs to encourage the hiring, retention, and promotion of the disabled? Do these include any of the following? Please upload documentation. Programs % of employees affected

Training

Specialized software/equipment

Barrier−free workplace

Other: Individualized Accomodations

Other:

Number of positions occupied by individuals with disabilities N/A

Generated from OneReport 219/299 Microsoft Corporation Diversity Partnershp

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Diversity Partnershp Does Microsoft Corporation sponsor any diversity related groups, or have partnerships with diversity related groups, including any of the following? Check all that apply, and list any other groups. Recruiting organizations National Minority Business Development Council Womens Business Enterprise Council Other Please see specify: attached link Other Please specify: Other Please specify: Other Please specify:

Supporting Documentation: Microsoft − Diversity Page #: View

Generated from OneReport 220/299 Microsoft Corporation Same Sex Benefits

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Same Sex Benefits Does Microsoft Corporation offer medical, health, and other benefits to the same sex domestic partners of its employees? If Company offers medical, health, and other benefits to the same sex domestic partners of its employees: Yes

If offered only at some locations or subsidiaries, please explain:

Supporting Documentation: Gay, Lesbian, Bisexual and Transgender Employees at Microsof... Page #: View

Generated from OneReport 221/299 Microsoft Corporation Diversity Purchasing

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Diversity Purchasing Does Microsoft Corporation have a program or policy to encourage purchasing products and supplies from minority− and women−owned businesses? Please upload this policy and check all that apply. Yes, women−owned businesses Yes, minority−owned businesses

Supporting Documentation: Microsoft − Supplier Diversity Page #: View

Generated from OneReport 222/299 Microsoft Corporation Purchasing Tracking

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Purchasing Tracking Does Microsoft Corporation track its purchasing from women/minority businesses? If so, please provide the following data for Microsoft Corporation's purchasing/contracting from women and minority−owned businesses. 2007 2006 2005

Contracts and purchases ($ million) 822.7 685.3 535.2

% of total contracts and purchases

Generated from OneReport 223/299 Microsoft Corporation EEO/Disc Class Action

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / EEO/Disc Class Action Has Microsoft Corporation been involved in an action by the U.S. EEOC, or a similar state government organization, or any other private and/or class actions in the last two years for alleged discrimination? Please provide information below. In the Comments section, please include information on how actions were resolved, including the amount of any fines, penalties, or settlements paid by the company. Type of action Yes or No List dates Comments

EEOC actions? Yes No

Other state actions? Yes No

Private/class action lawsuits? Yes Microsoft has been sued in a small number of cases by No individual former and current employees. No fines or penalties have been assessed. No jury verdicts adverse to Microsoft have been issued.

Generated from OneReport 224/299 Microsoft Corporation Diversity Awards

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Diversity Awards Has Microsoft Corporation received any awards for its EEO, diversity programs, or non−discrimination policies or practices? Date Award Name

Supporting Documentation: Microsoft − Diversity Awards and Recognition Page #: View

Generated from OneReport 225/299 Microsoft Corporation Management Diversity

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Management Diversity In the table below, please provide the number and percentage of Microsoft Corporation's middle managers who are women and/or visible minorities. Total # of % of # of % of # of people % of # of % of Total # in women women minorities minorities w/ people w/ aboriginal aboriginal one or both disabilities disabilities people people designated groups

Home N/A N/A country

Worldwide N/A N/A

Generated from OneReport 226/299 Microsoft Corporation Diversity Indicators GRI LA13

5. Management Approach and Performance Indicators / Labor Practices and Decent Work / Labor Practices and Decent Work Performance Indicators / Aspect: Diversity and Equal Opportunity / Diversity Indicators GRI LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity. Female Minority Age groups groups

Employees by Number % in % Number % in % % <30 % % job category worldwide home worldwide worldwide home worldwide yrs old 30−50 >50 country country yrs old yrs old

Executive/senior level officials and managers

First/mid level N/A N/A officials and managers

Professionals

Technicians

Sales workers

Administrative support workers

Craft workers

Operatives

Laborers and helpers

Service workers

Total

Female Minority Foreign groups nationalities (other than nationality of the company's domicile country)

Number % of Number % of board Number % of board board

Governance body (e.g., board) members

Generated from OneReport 227/299 Microsoft Corporation Female to Male Salary Ratio GRI LA14

Home Worldwide Home Worldwide Home Worldwide Country Country Country

Basic women's salary as a percentage to men's basic salary

Generated from OneReport 228/299 Microsoft Corporation Human Rights

Human Rights (Optional)

5. Management Approach and Performance Indicators / Human Rights / Human Rights (Optional) / Human Rights (Optional) This optional data request is provided to allow Microsoft Corporation to report data or information regarding Human Rights issues that is not specifically requested by research firms. You may add introductory or summary information, or cover specific items not addressed by research firms. At Microsoft, we have adopted policies that guide the behavior of our employees and suppliers throughout the world on issues such as fair employment, privacy and free expression, supply chain management, and environmental protection. We also supplement our business operations with an extensive program of community affairs initiatives.

Microsoft has endorsed the United Nations Global Compact and is committed to its 10 principles on human rights, labor, the environment, and anticorruption. The U.N. Global Compact is an international public−private initiative that seeks to promote responsible corporate citizenship and to help realize a more sustainable and inclusive global economy.

We recognize that Internet communication companies have a valuable role to play in the realization of human rights, including free expression. It is important to our business that the Internet be fostered and protected as a worldwide vehicle for reliable information and communications, personal expression, innovation, and economic development. Accordingly, we are deeply concerned about issues of individual security, privacy, and government control of Internet content.

Our perspective is that we will be served best as a company, as an industry, and as a worldwide community if we can be guided by clear principles and policies that address human rights and free expression not only in the cases of blogging, search, e−mail, and other services that exist today, but also in the variety of technologies that will be offered in the years ahead. With respect to blog services, we have recently adopted a policy that applies worldwide and is intended to promote three principles:

• Explicit standards for protecting content access: Microsoft will remove access to blog content only when it receives a legally binding notice from the government indicating that the material violates local laws, or if the content violates the service’s terms of use.

• Maintaining global access: Microsoft will remove access to content only in the country issuing the order. When blog content is blocked due to restrictions based on local laws, the rest of the world will continue to have access. This is a new capability Microsoft is implementing in the infrastructure of the Windows Live Spaces network of Internet services. • Transparent user notification: When local laws require the company to block access to certain content, Microsoft will ensure that users know why that content was blocked by notifying them that access has been limited due to a government restriction.

The Center for Democracy and Technology (CDT) and Business for Social Responsibility (BSR) Facilitated by both CDT and BSR, a diverse group of companies, academics, investors, technology leaders, and human rights organizations are combining efforts to develop a set of principles guiding company behavior when faced with laws, regulations, and policies that interfere with the achievement of human rights.

This group seeks to advance its effectiveness by establishing a framework to implement the principles, hold signatories accountable, and provide ongoing learning. Microsoft is pleased to join in this effort, and we are committed to developing shared principles that maximize the value of the Internet for individual users, including basic protections for privacy, freedom of expression, and sharing information.

Generated from OneReport 229/299 Microsoft Corporation Human Rights: Disclosure on Management Approach

Human Rights Disclosure on Management Approach GRI HR

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Human Rights Disclosure on Management Approach GRI HR DISCLOSURE ON MANAGEMENT APPROACH Provide a concise disclosure on the following Management Approach items with reference to the Human Rights Aspects listed below. The ILO Tripartite Declaration Concerning Multinational Enterprises and Social Policy (in particular the eight core conventions of the ILO which consist of Conventions 100, 111, 87, 98, 138, 182, 20 and 1059), and the Organisation for Economic Cooperation and Development Guidelines for Multinational Enterprises should be the primary reference points.

• Investment and Procurement Practices; • Non−discrimination; • Freedom of Association and Collective Bargaining; • Abolition of Child Labor; • Prevention of Forced and Compulsory Labor; • Complaints and Grievance Practices; • Security Practices; and • Indigenous Rights.

For the Human Rights disclosure from Microsoft regarding management approach, please refer to the link included within "Supporting Documents" below or copy/paste the following link into a browser: http://www.microsoft.com/About/CorporateCitizenship/US/ResponsibleLeadership/HumanRights.mspx

Supporting Documentation: Human Rights Management Approach Page #: View

Generated from OneReport 230/299 Microsoft Corporation Human Rights Policy

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Human Rights Policy Please provide Microsoft Corporation's formal policy or code of conduct regarding human rights of internal stakeholders as it applies to Microsoft Corporation's worldwide operations, including operations in countries or regions with poor human rights records, dictatorial countries, or conflict zones. (This may be uploaded.) Also indicate which statements below apply to Microsoft Corporation's human rights policy. The policy addresses relevant company activities and significant impacts or issues identified The policy is approved by the relevant board The policy is available throughout the company The policy is regularly reviewed and updated The policy is publicly available The policy supports the Universal Declaration of Human Rights The policy covers sector−specific issues or issues mentioned in the UN Human Rights Norms for Business There is a human rights policy for security forces Web address Please http://www.microsoft.com/About/CorporateCitizenship/US/ResponsibleLeadership/HumanRights.mspx specify:

Supporting Documentation: Microsoft Vendor Code of Conduct Page #: View Microsoft Vendor Program Agreement Administrative Guidelines Page #: View Microsoft Human Rights Statement Page #: View Microsoft − Standards of Business Conduct Page #: View Microsoft − Contracting with Microsoft, Vendor Code of Condu... Page #: View

Additional Comments Microsoft Corporation’s human rights policy is incorporated within the Vendor Code of Conduct and Standards of Business Conduct policies. Additionally, Microsoft issued a Human Rights Statement at the time of endorsing the UN Global Compact.

Generated from OneReport 231/299 Microsoft Corporation Human Rights Policy Issues

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Human Rights Policy Issues Does Microsoft Corporation's policy or code of conduct on human rights address the following issues? Please select all that apply below. Health and safety of non−U.S. employees Living conditions of non−U.S. employees International human rights standards ILO conventions Working hours/time off for non−U.S. employees Child labor in non−U.S. operations Forced labor in non−U.S. operations Acceptable wages for non−U.S. employees Freedom of association for non−U.S. employees Requires supplier/vendor compliance Sexual harassment Physical abuse Disciplinary measures Defined protective measures against abuses

Supporting Documentation: Microsoft Vendor Code of Conduct Page #: View Microsoft Vendor Program Agreement Administrative Guidelines Page #: View Microsoft − Standards of Business Conduct Page #: View

Generated from OneReport 232/299 Microsoft Corporation Human Rights (EIRIS)

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Human Rights (EIRIS) Please provide details on Microsoft Corporation's systems that cover the following human rights areas: − child labor − forced labor − freedom of association − collective bargaining − equal opportunities/non−discrimination − supporting the OECD Guidelines for Multinational Enterprises − as a signatory of the Global Compact − use of private and public security personnel (oil, gas, and mining sectors only) − indigenous land rights (oil, gas, and mining sectors only) Systems Details/Documentation

Human rights policy is http://www.microsoft.com/About/CorporateCitizenship/US/ResponsibleLeadership/HumanRights.mspx publicly available (document/Web address attached)

Policy communicated to all employees globally

Policy communicated in relevant local languages/non−verbal formats

Employee training globally for all employees

Monitoring compliance with human rights policy

Procedures for remedying non−compliance with human rights policy

Identification of major human rights challenges/risks

Integration of human rights risks into formal risk procedure

Publicly reports on human http://www.microsoft.com/About/CorporateCitizenship/US/ResponsibleLeadership/HumanRights.mspx rights policies and systems

Please provide how regularly the human rights policy is reviewed

Does your company set targets for its human rights policy?

Yes If yes, please provide details: No

Generated from OneReport 233/299 Microsoft Corporation Human Rights Management

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Human Rights Management Please upload or provide information regarding Microsoft Corporation's management structure and staff through which Microsoft Corporation addresses human rights or international labor issues, including supplier compliance. Please also provide the contact information requested below. Title of officer or manager responsible for human rights or international labor issues

Do employees know whom to contact in case of human rights violation at work? Yes No

Name and contact address for the above Director of Compliance at Microsoft Corporation, Law and Corporate Affairs, One Microsoft Way, Redmond, WA 98052

Managerial structure through which the company addresses human rights issues: Our Governance and Nominating Committee has as one of its responsibilities reviewing our policies and programs that relate to corporate responsibility, including public issues of significance to the Company and its stakeholders. The Committee together with the Board of Directors already authorizes and directs Company management to address human rights issues.

Generated from OneReport 234/299 Microsoft Corporation Human Rights Initiatives

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Human Rights Initiatives Please describe any initiatives Microsoft Corporation takes to promote human rights in countries or regions with poor human rights records. Please see link included below in "Supporting Documents" section

Supporting Documentation: Human Rights Management Approach Page #: View

Generated from OneReport 235/299 Microsoft Corporation Supply Chain Human Rights Policy

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Supply Chain Human Rights Policy Does Microsoft Corporation have a formal human rights policy statement or code of conduct governing its sourcing/supply chain (i.e. suppliers, vendors, contractors and sub−contractors)? If so, please upload this policy, and select all that apply to this policy below.

Also please describe below in Additional Comments any other systems/programs to manage human rights issues in the supply chain. The company is in the process of Please developing a code of conduct for specify: suppliers to be implemented by Vendors, contractors and suppliers are required to comply with the company's own formal policy with regard to human rights issues worldwide Respect for core ILO labour standards relating to equal opportunites/non−discrimination; freedom of association; the right to collective bargaining; the use of child labour; the use of forced labour Statement on working hours and leave Statement on living conditions Statement on equal opportunities/non−discrimination Statement on freedom of association Statement on child labor Statement on forced labor Statement on safety and health in the workplace Statement on fair wages Statement on fair disciplinary procedures or corporate punishment When was policy created? Please April 25, 2003 specify: When was policy last updated? Please July 1, 2008 specify: Policy has been translated and disseminated to all suppliers Policy has been translated and disseminated to all suppliers and their employees How many tiers of vendors/suppliers Please direct, with requirement to cascade to sub contractors does policy apply specify: How often is policy required to be Please upon contract signing signed off on by vendors/suppliers specify: Policy is publicly available Please http://www.microsoft.com/about/companyinformation/procurement/process/contracting.asp specify: Policy is available on request

Generated from OneReport 236/299 Microsoft Corporation Policy is integrated with other aspects of supplier policy Policy includes commitments (if company is a major user of agricultural products) to guarantee fair payments to small producers

Supporting Documentation: Microsoft Vendor Code of Conduct Page #: View Microsoft − Standards of Business Conduct Page #: View Microsoft − Contracting with Microsoft, Vendor Code of Condu... Page #: View

Generated from OneReport 237/299 Microsoft Corporation Child Labor Policy

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Child Labor Policy Does Microsoft Corporation have a policy on child labor? If so, please upload details or supporting documentation. Company has a policy on child labor The child labor policy applies to U.S. operations The child labor policy applies to all non−U.S. operations The child labor policy applies to contract operations The child labor policy applies to supplier operations The child labor policy meets ILO minimum standards The child labor policy is part of a larger policy/code of conduct Company requires vendor compliance with its child labor policy Company does not have a policy on child labor Company does not have a policy on child labor but it is being written

Supporting Documentation: Microsoft Vendor Code of Conduct Page #: View Microsoft Vendor Program Agreement Administrative Guidelines Page #: View

Generated from OneReport 238/299 Microsoft Corporation Forced Labor Policy

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Forced Labor Policy Does Microsoft Corporation have a policy on forced labor? Please upload any details or other documentation. Company has a policy on forced labor Forced labor policy applies to U.S. operations Forced labor policy applies to all non−U.S. operations Forced labor policy applies to contract operations Forced labor policy applies to supplier operations Forced labor policy meets ILO minimum standards Forced labor policy is a part of a larger policy/code of conduct Company requires vendor compliance with its forced labor policy Company does not have a forced labor policy Company does not have a forced labor policy, but one is being written

Supporting Documentation: Microsoft Vendor Code of Conduct Page #: View Microsoft Vendor Program Agreement Administrative Guidelines Page #: View Microsoft − Contracting with Microsoft, Vendor Code of Condu... Page #: View

Generated from OneReport 239/299 Microsoft Corporation Community Policy

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Community Policy Does Microsoft Corporation have a community engagement policy? Please provide information below and upload documentation. (Note: policies may be stand−alone documents or components of broader policies/codes.) Community engagement policy:

Company has a community engagement/involvement/consultation policy Policy adresses relevant company activities and significant impacts or issues identified Is approved by the relevant board Is available throughout the company Is regularly reviewed and updated Is publicly available Company does not have a community engagement policy

Supporting Documentation: Microsoft − Community Affairs Page #: View Microsoft − Community Investment Programs Page #: View NGO Connection Page #: View

Additional Comments More information on Microsoft's Community Affairs and Community Investment Program can be found on the company Web site.

http://www.microsoft.com/About/CorporateCitizenship/us/CommunityInvestment/default.mspx

Generated from OneReport 240/299 Microsoft Corporation Community Affairs Dept

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Community Affairs Dept Does Microsoft Corporation have a community affairs and/or aboriginal relations department? Please provide information below. Title of highest ranking officer in community affairs and/or aboriginal relations department Senior Director, Community Affairs

Managerial/organizational structure of community affairs and/or aboriginal relations see document below

Grant−making committee? Yes No

Annual community budget? Yes No

Supporting Documentation: Community Affairs Org Chart Page #: View

Generated from OneReport 241/299 Microsoft Corporation Community Activities

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Community Activities Please select from the following list all that apply to Microsoft Corporation's social/economic engagement of community stakeholders. Demonstrated commitment to corporate responsibility through the public activities of our board members or senior executives Has affordable housing programs Has support programs for economically disadvantaged groups Has programs to support K−12 education Has partnerships with K−12 educational institutions

Supporting Documentation: Citizenship − Unlimited Potential (UP) Page #: View Citizenship − Partners in Learning (PiL) Page #: View Microsoft − Employee Engagement Programs Page #: View Microsoft Grants and Programs in Puget Sound Page #: View Microsoft Partners in Learning Home Page #: View

Additional Comments Examples of executive public involvement include:

Robbie Bach − Boys and Girls Clubs of America Debra Chrapaty − Nature Conservancy Pamela Passman − Seattle Art Museum Brad Smith – Performing Arts Center Eastside (PACE) Akhtar Badshah − United Way of King County Mary Snapp − YWCA

Generated from OneReport 242/299 Microsoft Corporation Volunteerism

5. Management Approach and Performance Indicators / Human Rights / Human Rights: Disclosure on Management Approach / Volunteerism Does Microsoft Corporation have programs to support employee giving or volunteer programs? Please select below all that apply and explain in Additional Comments. Employee secondments to communities or charitable projects Paid time off for employees to volunteer Volunteer matching services Payroll deductions/gift−matching donations Organized group volunteer activities Grants to organizations where employees volunteer Company−wide community volunteering days or weeks Use of corporate facilities/resources for charitable activities

Supporting Documentation: Microsoft − Employee Engagement Programs Page #: View

Generated from OneReport 243/299 Microsoft Corporation Human Rights Performance Indicators

Aspect: Investment and Procurement Practices

Agreements w/ Human Rights Clauses GRI HR1

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Agreements w/ Human Rights Clauses GRI HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening. 2007 2006 2005

Number Percentage Number Percentage Number Percentage

Significant investment agreements that include human rights clauses or that underwent human rights screening

Generated from OneReport 244/299 Microsoft Corporation Poor HumRghts Rcrd

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Poor HumRghts Rcrd Please indicate whether Microsoft Corporation has operations in Burma (Myanmar), including subcontractors or vendors. Company has operations, subcontractors, and/or vendors in Burma

No Data Provided because: Not Applicable

Generated from OneReport 245/299 Microsoft Corporation Human Rights Compliance

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Human Rights Compliance Does Microsoft Corporation have a framework for assessing its impact on human rights? If yes, please describe in Additional Comments.

How does Microsoft Corporation monitor, audit, or assess its own compliance, or the compliance of its suppliers and/or subcontractors, to the relevant policy or code of conduct on human rights? Please upload supporting documentation with details. In addition, provide the data requested in the table below regarding Microsoft Corporation's supplier compliance programs and using a percentage to show the proportion that is audited or assessed. Framework to assess company's impact on human rights Internal monitoring of compliance Internal auditing/visiting of suppliers to assess compliance External monitoring of compliance External auditing/visiting of suppliers to assess compliance Secure and independent complaints mechanism for reporting cases of non−compliance Monitoring targeted to those suppliers assessed as highest risk

% % third % vendor % contractors' % other % other % other company party audit assurance awareness internal external means audit programs mechanism mechanism (specify) (specify)

Supplier/subcontractor 0% 50% of 100% compliance at supplier target risk facilities suppliers

Generated from OneReport 246/299 Microsoft Corporation Compliance Frequency

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Compliance Frequency Please indicate below how frequently Microsoft Corporation audits the compliance of its overseas vendors, suppliers, contractors, and/or subcontractors with its policy or code of conduct on human rights worldwide. Company audits compliance of suppliers, contractors, etc. Never Once Routinely As needed

If routinely or as needed, please explain: Microsoft routinely audits suppliers compliance with its' Vendor Code of Conduct.

These audits are conducted: Internally By a third party Both Other Please specify:

Generated from OneReport 247/299 Microsoft Corporation Compliance Issues

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Compliance Issues What percentage of suppliers, contractors, vendors and/or subcontractors were found to have problems complying with Microsoft Corporation's policy or code of conduct with regards to human rights during recent audits? Aggregate data not available, considerable challenges exist with target risk population of suppliers to have adequate labor and ethics management systems, most non conformances are remediated, and ongoing improvement of management systems is required by Microsoft.

Generated from OneReport 248/299 Microsoft Corporation Supplier Screening GRI HR2

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Supplier Screening GRI HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken. 2007 2006 2005

Percentage of contracts with significant suppliers and contractors that included criteria or screening on human rights

Percentage of contracts with significant suppliers and contractors that were either declined or imposed performance conditions, or were subject to other actions as a result of human rights screening

Generated from OneReport 249/299 Microsoft Corporation Human Rights Training Time GRI HR3

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Investment and Procurement Practices / Human Rights Training Time GRI HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. 2007 2006 2005

Total number of hours devoted to training on policies and procedures concerning aspects of human rights that are relevant to operations

Percentage of employees trained in policies and precedures concerning aspects of human rights that are relevant to operations

Generated from OneReport 250/299 Microsoft Corporation Aspect: Non−Discrimination

Discrimination Incidents GRI HR4

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Non−Discrimination / Discrimination Incidents GRI HR4 Total number of incidents of discrimination and actions taken. 2007 2006 2005

Total number of incidents of discrimination

Incidents (reporting year only) Status of incident Actions taken

Reviewed Remediation plan being implemented Remediation plan implemented, results reviewed through routine internal management review process Incident no longer subject to attention

Generated from OneReport 251/299 Microsoft Corporation Aspect: Freedom of Association and Collective Bargaining

Collective Bargaining Risk GRI HR5

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Freedom of Association and Collective Bargaining / Collective Bargaining Risk GRI HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

Generated from OneReport 252/299 Microsoft Corporation Aspect: Child Labor

Child Labor Risk GRI HR6

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Child Labor / Child Labor Risk GRI HR6 Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor.

Generated from OneReport 253/299 Microsoft Corporation Aspect: Forced and Compulsory Labor

Forced Labor Risk GRI HR7

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Forced and Compulsory Labor / Forced Labor Risk GRI HR7 Operations identified as having significant risk for incidents of forced or compulsory labor, and measures taken to contribute to the elimination of forced or compulsory labor.

Generated from OneReport 254/299 Microsoft Corporation Aspect: Security Practices

Security Training GRI HR8

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Security Practices / Security Training GRI HR8 Percentage of security personnel trained in the organization's policies or procedures concerning aspects of human rights that are relevant to operations. 2007 2006 2005

Percentage of security personnel who have received training on human rights policies and/or procedures

Training requirements regarding human rights issues also apply to third party organizations providing security personnel

No Data Provided because: Not Applicable

Generated from OneReport 255/299 Microsoft Corporation Aspect: Indigenous Rights

Indigenous People Violations GRI HR9

5. Management Approach and Performance Indicators / Human Rights / Human Rights Performance Indicators / Aspect: Indigenous Rights / Indigenous People Violations GRI HR9 Total number of incidents of violations involving rights of indigenous people and actions taken. 2007 2006 2005

Total number of identified incidents involving indigenous rights

Incidents (reporting year only) Status of incident Actions taken

Reviewed Remediation plan being implemented Remediation plan implemented, results reviewed through routine internal management review process Incident no longer subject to attention

Generated from OneReport 256/299 Microsoft Corporation Society

Society (Optional)

5. Management Approach and Performance Indicators / Society / Society (Optional) / Society (Optional) This optional data request is provided to allow Microsoft Corporation to report data or information regarding Society issues that is not specifically requested by research firms. You may add introductory or summary information, or cover specific items not addressed by research firms. As an industry leader and the world's largest software company, Microsoft has a responsibility to act as a good corporate citizen all around the world. Whether it is complying with local laws and regulations, demonstrating ethical business standards, mitigating risks to the environment, or protecting human rights, Microsoft is committed to being a global leader in corporate social responsibility.

Supporting Documentation: Citizenship − Global Citizenship at Microsoft Page #: View Microsoft.com Unlimited Potential Page #: View Responsible Leadership − Environmentmental Sustainability Page #: View

Generated from OneReport 257/299 Microsoft Corporation Society: Disclosure on Management Approach

Ethical Management

5. Management Approach and Performance Indicators / Society / Society: Disclosure on Management Approach / Ethical Management Does Microsoft Corporation have management systems to address ethical issues, including clear senior responsibility with supporting resources? If yes, please upload the managerial/organizational structure through which the company manages ethical issues. Yes

Supporting Documentation: Responsible Leadership − Compliance Page #: View

Generated from OneReport 258/299 Microsoft Corporation Ethical Monitoring

5. Management Approach and Performance Indicators / Society / Society: Disclosure on Management Approach / Ethical Monitoring Please indicate the extent of Microsoft Corporation's management systems to implement the code of ethics or similar policies: Company has clearly identified high risk issues/areas/operations Microsoft's operations and financial results are subject to various risks and uncertainties, including those described below, that could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. Such risks are outlined in the Microsoft 2008 10K, pp. 13− 18 referenced below. Company training on the code All Microsoft employees are accountable and responsible for understanding and complying with the Standards of Business Conduct, applicable laws, regulations, and Microsoft policies that are related to their jobs. In fulfilling these responsibilities each employee must:

−Read, understand, and comply with the Standards of Business Conduct and all Microsoft policies that are related to his/her job. −Participate in training and educational programs/events required for his/her job. −Obtain guidance for resolving a business practice or compliance concern if he/she is uncertain about how to proceed in a situation. −Report possible violations of the Standards of Business Conduct, policies, applicable laws, and regulatory requirements. −Cooperate fully in any investigation. −Make a commitment to conduct Microsoft's business with integrity and in compliance with applicable laws and regulatory requirements. Compliance monitoring Microsoft's Department of Law and Corporate Affairs is responsible for the overall administration of the company's Business Conduct and Compliance Program and for providing employees with resources and materials to assist them in conducting their business activities in a legal and ethical manner. In administering the program, Law and Corporate Affairs works closely with Finance, Human Resources, Internal Audit, and Security.

The General Counsel serves as the company's Chief Compliance Officer and has overall responsibility for the management of the program. The General Counsel reports directly to the CEO and, for this purpose, to the Audit Committee of the Board of Directors. The General Counsel oversees directly an Office of Legal Compliance (OLC). The Director of Compliance, who is part of the Office of Legal Compliance, reports to the Chief Compliance Officer and the Audit Committee of the Board of Directors and has the responsibility for the day−to−day administration of the Business Conduct and Compliance Program. This responsibility includes, but is not limited to, applying the Standards to specific situations in which questions may arise and interpreting the Standards in a particular situation.

The Standards of Business Conduct and the Business Conduct and Compliance Program are endorsed by and have the full support of Microsoft's Board of Directors. The Board of Directors and management are responsible for overseeing compliance with and enforcing the Standards of Business Conduct. "Whistleblowing" procedures It is the right and responsibility of Microsoft employees to obtain guidance about a business practice or compliance issue when uncertain about what action should be taken and to report possible violations of the Standards of Business Conduct.

If details are needed on a specific policy, e−mail may be sent to the Microsoft compliance team at [email protected]. If guidance is needed regarding a business practice or compliance issue or a possible violation needs to be reported, the employee should talk to an immediate supervisor, manager, another member of management, the respective Human Resources Generalist or Law and Corporate Affairs contact. If one is a Microsoft employee or vendor without access to the Microsoft corporate intranet and wishes to send a confidential e−mail to the Director of Compliance, one may do so by e−mailing the Business Conduct and Compliance alias ([email protected]). A confidential e−mail may be delivered via the Internet by submitting a report via the Microsoft Integrity Web site. These e−mails will be received by a third−party vendor, who will remove contact information prior to forwarding a summary of the e−mail to the Office of Legal Compliance. One may also send a letter to the Director of Compliance at Microsoft Corporation, Law and Corporate Affairs, One Microsoft Way, Redmond, WA 98052 or send a confidential fax to (425) 705−2985. Letters and faxes sent to the Director of Compliance may be submitted anonymously if one chooses to do so.

If there is a concern regarding a questionable accounting or auditing matter and one wishes to submit the concern confidentially or anonymously, one may do so by submitting a report via the Microsoft Integrity Web site, calling the Business Conduct Line, or sending a letter or fax to the Director of Compliance as outlined above.

Microsoft will handle inquiries discreetly and make every effort to maintain, within the limits allowed by the law, the confidentiality of anyone requesting guidance or reporting a possible violation.

Microsoft will not tolerate any retribution or retaliation taken against any employee who has, in good faith, sought out advice or has reported a possible violation. However, if any employee makes a knowingly false report of a possible violation for the purpose of harming another individual, that employee will be subject to disciplinary action. Company has a commitment to reports publicly on compliance We apply standards of full, fair, accurate, timely, and understandable disclosure in reports and documents that are filed or submitted to the Securities and Exchange Commission, and in other public communications as well. We establish and maintain clear, honest, and open communications; listen carefully; and build our relationships on trust, respect, and mutual understanding. We are accountable and responsive to the needs of our customers, consumers, and partners and take our commitments to them seriously. Our advertising, sales, and promotional

Generated from OneReport 259/299 Microsoft Corporation literature seeks to be truthful, accurate, and free from false claims. Company holds a regular review of its code/policy yes

Supporting Documentation: Microsoft 2008 10K Page #: View Responsible Leadership − Compliance Page #: View Microsoft Standards of Business Conduct Page #: View

Generated from OneReport 260/299 Microsoft Corporation Community Programs

5. Management Approach and Performance Indicators / Society / Society: Disclosure on Management Approach / Community Programs Indicate if any of the following programs are supported by Microsoft Corporation. Matching donations Payroll giving schemes In−kind donations Employee secondment (paid time for volunteering) Other Please specify:

Generated from OneReport 261/299 Microsoft Corporation Society Disclosure on Management Approach GRI SO

5. Management Approach and Performance Indicators / Society / Society: Disclosure on Management Approach / Society Disclosure on Management Approach GRI SO DISCLOSURE ON MANAGEMENT APPROACH Provide a concise disclosure on the following Management Approach items with reference to the Society Aspects:

• Community; • Corruption; • Public Policy; • Anti−Competitive Behavior; and • Compliance.

As an industry leader and the world's largest software company, Microsoft has a responsibility to act as a good corporate citizen all around the world. Whether it is complying with local laws and regulations, demonstrating ethical business standards, mitigating risks to the environment, or protecting human rights, Microsoft is committed to being a global leader in corporate social responsibility.

Generated from OneReport 262/299 Microsoft Corporation Anti−Bribery Measures

5. Management Approach and Performance Indicators / Society / Society: Disclosure on Management Approach / Anti−Bribery Measures Please provide information below regarding Microsoft Corporation's anti−bribery policies and systems, and upload relevant public documents or Web addresses of public documents. Anti−bribery policy: Prohibits facilitation C1 payments Restricts and/or controls facilitation payments Prohibits giving bribes Prohibits receiving bribes States there is no detriment to employees for refusing to pay/take bribes Applies to subsidiaries and joint ventures Applies to agents Applies to contractors and suppliers

Anti−bribery system element: Extent to which element is in place, or indicate not applicable (N/A):

Policy communicated to employees

Training provided to relevant employees

Compliance mechanisms (assurance, audits, monitoring, board reports)

Secure channels or whistle−blowing procedures for protection

Policy communicated to contractors, suppliers and agents

Training provided for contractors and suppliers

System and procedures for the appointment and remuneration of agents to ensure agents have relevant skill levels/expertise and that payment of an agent is not above expected rates that could facilitate bribery

Conduct due diligence before establishing joint−ventures

Conduct due diligence in evaluating prospective contractors and suppliers

Risk assessment of Company's vulnerability and exposure to bribery

System to identify and "black list" known bribe payers

Internal assessment /review of the anti−bribery program

Guidance on level of sanctions to be applied in the event of a violation of the code/policy

Other: Please specify:

Generated from OneReport 263/299 Microsoft Corporation The following anti−bribery mechanisms are publicly disclosed: Description of assurance processes Frequency of internal and/or external audits Assessments/reviews of anti−bribery programs Compliance reports Board reports Other: Please specify:

If the Company publicly reports on performance related to bribery policies, please provide documentation (e.g., # of breaches, # of disciplinary actions, # of instances of termination, legal actions taken, handling of complaints or whistleblowing calls): C1 For information regarding Microsoft's anti−bribery policies and systems, please refer to the supporting documentation listed below.

Supporting Documentation: Anti Corruption Policy Page #: View Microsoft Standards of Business Conduct Page #: View

Additional Comments Microsoft is committed to observing the Principles set forth in the UN Global Compact, and to full compliance with the anti−corruption and anti−money laundering laws of the countries in which it operates, including the United States Foreign Corruption Practices Act.

Microsoft has adopted and implemented policies which strictly prohibit corruption of government officials as well as acts which may promote commercial bribery. These enhanced policies include a number of procedures and business processes that are designed to assist the company to prevent corrupt payments.

Microsoft is also committed to taking reasonable steps to ensure that its business partners that represent Microsoft share this commitment to our Standards of Business Conduct and compliance with the anti−corruption laws.

For additional information about Microsoft's policies relating to our Standards of Business Conduct, please see our Microsoft's Responsible Leadership Web Site

Generated from OneReport 264/299 Microsoft Corporation Donations−Political

5. Management Approach and Performance Indicators / Society / Society: Disclosure on Management Approach / Donations−Political Does Microsoft Corporation have a code of conduct or policy that addresses political donations, and if so, who is responsible for its implementation? Please upload this code or policy and select all that apply below. The company does not have such a code or policy * The policy covers both direct and indirect political donations Please specify: The company's code or policy is publicly disclosed The policy or code prohibits donations to political parties Political donations permitted when clear authorization and disclosure procedures are met Political donations are publicly disclosed at: Please specify: www.microsoft.com Person and title responsible for implementing political donation policy or code of conduct: Please specify: Pamela Passman, Microsoft Corp VP Information about who is responsible for policy implementation is made public at the Please specify: www.microsoft.com following location: Political donations are audited Political donation audits are made public at the following location: Please specify:

Supporting Documentation: Microsoft − Standards of Business Conduct Page #: View Citizenship − Political Donations Page #: View

Additional Comments Microsoft Corporation and its employees take part in the political process in a variety of ways, from corporate government affairs programs designed to educate and influence elected officials on key issues to individual political action by employees. As appropriate, the company and its employees also make financial contributions to support selected political campaigns.

Political Activities and Contributions: Microsoft employees are encouraged to exercise their right to participate in political activities. Any decision to become involved is entirely personal and voluntary. Employees' personal political activities are done on their own time and with their own resources.

Corporate Contributions: Under U.S. law, corporations are not allowed to support candidates for federal office. Many U.S. states allow corporate donations to state and local candidates or ballot issue campaigns. As a corporation, Microsoft makes political contributions to support candidates and ballot measures that are consistent with our public policy agenda and business interests. In calendar year 2007, our corporate contributions to state and local political campaigns totaled $349,800.

527 Contributions: Effective July 1, 2005, Microsoft will make no corporate contributions to any non−candidate or non−party political committee organized under section 527 of the Internal Revenue Code.

Reporting: To enable stakeholders to review MSPAC and Microsoft corporate contributions, we will post on our company Web site links to specific databases compiled by the Federal Elections Commission (FEC), The Center for Responsive Politics, and The Center for Public Integrity.

Generated from OneReport 265/299 Microsoft Corporation Society Performance Indicators

Aspect: Community

Impacts On Community GRI SO1

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Community / Impacts On Community GRI SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting. Programs are in place for assessing the impacts of operations on local communities: Prior to entering the community While operating in the community While making decisions to exit the community

Program or policies define: How data is collected for such programs, and by whom How to select community members (individual or group) from whom information will be gathered

The number of operations to which the programs apply:

The percentage of operations to which the programs apply:

Please explain how the programs for managing community impacts have been effective in mitigating negative impacts and maximizing positive impacts, including the scale of persons affected:

Please provide examples of how feedback and analysis of data on community impacts have informed steps toward further community engagement on the part of the reporting organization:

Supporting Documentation: CIS Publications 2008 Page #: View

Additional Comments Microsoft Community Affairs partners with the University of Washington, Center for Information and Society to conduct research on the impact of our UP−CTSP grantees. UW CIS leads our Monitoring and Evaluation research conducted worldwide.

Generated from OneReport 266/299 Microsoft Corporation Aspect: Corruption

Corruption Risk GRI SO2

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Corruption / Corruption Risk GRI SO2 Percentage and total number of business units analyzed for risks related to corruption. 2007 2006 2005

Total number of business units analyzed for risks related to corruption C2

Percentage of business units analyzed for risks related to corruption 100 C2 Actual total number of business units analyzed is “not applicable.” The analysis is performed with regard to business operations—not by individual business unit.

Generated from OneReport 267/299 Microsoft Corporation Anti−Corruption Training GRI SO3

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Corruption / Anti−Corruption Training GRI SO3 Percentage of employees trained in organization's anti−corruption policies and procedures. 2007 2006 2005

Percentage of total number of management employees who have received anti−corruption training C2

Percentage of total number of non−management employees who have received anti−corruption training C3 C2 Formal risk assessment activities related Anti−Corruption commenced in 2007. New formal policies and procedures were adapted and implement in January 2008. Formal mandatory Anti−Corruption online training for all Microsoft was launched in February 2008 a 98.6% completion rate was achieved. We did not track management completion numbers separately but the 98.6% completion numbers include manager completions. C3 Formal risk assessment activities related Anti−Corruption commenced in 2007. New formal policies and procedures were adapted and implement in January 2008. Formal mandatory Anti−Corruption online training for all Microsoft was launched in February 2008 a 98.6% completion rate was achieved. We did not track management completion numbers separately but the 98.6% completion numbers include manager completions.

Additional Comments Formal risk assessment activities related Anti−Corruption commenced in 2007. New formal policies and procedures were adapted and implement in January 2008. Formal mandatory Anti−Corruption online training for all Microsoft was launched in February 2008 a 98.6% completion rate was achieved. We did not track management completion numbers separately but the 98.6% completion numbers include manager completions.

Generated from OneReport 268/299 Microsoft Corporation Bribery Risk Countries

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Corruption / Bribery Risk Countries The countries below have been identified as having a high risk of bribery. Please identify which countries Microsoft Corporation has a 20%+ equity or voting rights stake in a company incorporated in that country.

Afghanistan, Albania, Angola, Argentina, Azerbaijan, Bangladesh, Bolivia, Burma , Myanmar), Burundi, Cameroon, Central African Republic, Chad, Congo, DR Congo, Cote d'Ivoire, Ecuador, Equatorial Guinea, Ethiopia, Georgia, Guatemala, Haiti, Honduras, Indonesia, Iraq, Kazakhstan, Kenya, North Korea, Kyrgyz Republic, Laos, Libya, Moldova, Mozambique, Niger, Nigeria, Pakistan, Palestinian Authority, Paraguay, Sierra Leone, Somalia, Sudan, Tajikistan, Tanzania, Turkmenistan, Ukraine, Uzbekistan, Venezuela, Yemen, Zimbabwe

All of the above countries except:

Only the following countries: Afghanistan, Argentina, Bangladesh, Bolivia, (Burma , Myanmar), Ecuador, Guatemala, Honduras, Indonesia, Iraq, Kenya, Moldova, Pakistan, Paraguay, Ukraine, Venezuela.

Generated from OneReport 269/299 Microsoft Corporation Government Contracts

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Corruption / Government Contracts Please indicate whether Microsoft Corporation is involved in either government national/public contracts or activities that require government licensing. Yes No

Generated from OneReport 270/299 Microsoft Corporation Insider Trading

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Corruption / Insider Trading Has Microsoft Corporation been involved in insider trading litigation or investigations in the last three years? Please provid information below, including a description of the litigation or investigations, the allegations, the company's response, and the current status of any legal proceedings. Please also report any fines, penalties, or settlements paid in connection with these proceedings. No.

Generated from OneReport 271/299 Microsoft Corporation Corruption Response GRI SO4

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Corruption / Corruption Response GRI SO4 Actions taken in response to incidents of corruption. 2007 2006 2005

Total number of incidents in which employees were dismissed or disciplined for corruption 0 0 0

Total number of incidents when contracts with business partners were not renewed due to violations related to 0 0 0 corruption

Please explain any litigation or investigation regarding bribery or corrupt practices brought against the company or its employees over the last three years, including a description of the investigation or litigation, the allegations, the company's response, and the current status of any legal proceedings. Please also explain the outcomes, including any fines, penalties, or settlements paid in connection with those proceedings:

Generated from OneReport 272/299 Microsoft Corporation Aspect: Public Policy

Public Policy Position GRI SO5

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Public Policy / Public Policy Position GRI SO5 Public policy positions and participation in public policy development and lobbying. Please explain the significant issues that are the focus of organizational−level (not individual operation−level) participation in public policy development and lobbying: Microsoft’s public policy agenda is focused on the following issues: Providing a framework and foundation for innovation and sustainable growth

• Promoting the benefits of intellectual property

Microsoft advocates policies that ensure that innovators, and those willing to invest in the development of new technologies, are rewarded for their efforts. Intellectual property rights (IPRs) are the best legal framework for supporting the economic incentives that spur innovation. Governments foster innovation and its commercialization through the grant of intellectual property rights in line with international norms, effective enforcement systems, and ensuring that right holders can exercise those rights in a way that makes economic and strategic sense. Policies to promote and protect patents, copyright, trademarks, and trade secrets will drive investment, create jobs and benefit the economy.

• Ensuring patent quality and harmonizing patent systems

Patents are an increasingly important means for innovators to protect their innovations, including software innovations, and to share them more broadly through patent licensing and cross−licensing arrangements. Rapid advances in technology mean that patent examiners are facing a growing number of applications, often involving highly complex innovations in new and rapidly evolving areas of technology. At the same time, the globalizing economy is raising new challenges of access to the patent system at the international level, especially for small start−up firms and individual inventors. The multiplicity of national patent regimes – all sharing the same basic goal, but often imposing disparate administrative burdens on inventors – builds inefficiency into the global economy. Microsoft supports patent reform measures to ensure high patent quality at a time of increasing patent quantity to promote international patent law harmonization on principles such as 18−month publication and “first−to−file”; and to reduce barriers to the patent system for individual inventors and small companies around the world.

• Meeting customer needs through choice, innovation and interoperability

Microsoft supports policies that promote innovation in interoperability−oriented technologies and user choice among solutions. Through educational outreach and adherence to Interoperability Principles, which help other software developers build systems that interoperate more easily with our most popular products, we actively support policies that provide incentives for the creation of innovative solutions to interoperability challenges and the freedom to use technologies that best meet a user’s needs. The pace of innovation is at least as rapid in the area of interoperability as it is in other areas of IT, and solutions span product design, industry collaboration, access to technology through cross licensing and industry developed standards such as Open XML. How these tools are used will vary from case to case and flexibility is important. In the area of government use of IT, Microsoft works with industry associations and like−minded companies and partners to support government procurement policies and practices that are merit−based, technology−neutral, open, transparent, competitive, and non−discriminatory.

• Ensuring a competitive environment for software innovation

Competition laws and regulations should be designed and applied in a manner that will promote investment, preserve incentives to innovate and safeguard open and efficient markets and the free flow of trade, thereby benefiting consumer welfare. Furthermore, governments should seek to harmonize competition regimes in order to promote certainty and avoid imposing diverging obligations or remedies. Recognizing the important role that the Windows operating system plays in the global economy, Microsoft has created a set of voluntary principles to help guide the future development of the Windows desktop platform worldwide, beginning with Windows Vista. The goal of the Windows Principles is to set clear expectations for customers, partners, and governments around the world for future Windows development. Through software design and our commercial agreements, we are committed to making it easy to install and configure non−Microsoft programs instead of, or in addition to, Windows features; to creating and preserving opportunities for developers to build products that directly compete with Microsoft’s own products; and to meeting customers’ needs for interoperability, data control, security and reliability across diverse systems.

• Promoting government−funded basic research and incentives for private sector R&D, and commercialization arrangements for government−funded R&D

Microsoft advocates for an environment in which innovators can dedicate their energies to taking technologies in new directions. By minimizing economic risks and enhancing the prospect of economic rewards, government investment in basic research and incentives for private sector R&D create an environment in which creators can dedicate themselves fully to the advancement of knowledge. Microsoft encourages governments to seek new ways to commercialize basic research efforts and promote the use of public policies to move basic research into the pipeline for commercial use.

Promoting the open and free flow of people, products, services and ideas

• Promoting and preserving free trade and open markets

Generated from OneReport 273/299 Microsoft Corporation Open markets are fueling economic growth, increasing cross−border investment, deepening regional and global integration and boosting incomes. Information technology is part of the essential infrastructure of a well−functioning modern economy, and Microsoft supports free and open trade and the adoption of bilateral and multilateral trade agreements that eliminate barriers for IT products, further open markets for IT services and prohibit trade barriers that would slow the growth of electronic commerce.

• Preserving freedom of expression online

Microsoft believes the Internet should be fostered and protected as a worldwide vehicle for reliable information and communications, personal expression, innovation and economic development. At the same time, the Internet raises issues that often justify national government attention, especially on matters of individual privacy, on−line safety, law enforcement and national security. It is important that governments address these issues with deliberation and restraint. Microsoft supports both international dialogue and bilateral consultations to promote the consistency of national actions and to maximize the openness, security and reliability of the Internet platform, including through the development of a clear set of principles that should guide policies and practices of global Internet companies providing services around the world.

• Supporting immigration policies that foster cross−border educational and professional opportunities

Today’s skilled workforce is increasingly mobile, pursuing educational and professional opportunities all over the world. People frequently study or work overseas for a period of time, then often return to their countries of origin. This flow and exchange of talent has enormous benefits both in fostering greater cross−cultural awareness and collaboration, and in sparking innovation and economic growth. Unfortunately, the immigration policies of some nations deter the world’s best and brightest from studying, working, and living in−country – even where the demand for highly skilled professionals far exceeds the supply of qualified domestic workers. Governments should ensure that their immigration policies facilitate these cross−border educational and professional opportunities.

• Ensuring entrepreneurs and consumers have access to the content and services they need

In the evolving market of digital content and services, healthy competition should be encouraged between content and service providers that offer a variety of features and ease−of−use options. These should succeed or fail based on consumer demand. Microsoft supports policies that promote producer and consumer choice, not government regulation, when determining what usage limitations and other conditions of use are acceptable. Digital rights management (DRM) technologies are one option in the ecosystem for creativity in the digital environment. DRM technologies can encourage creators of music, film, and other media to offer their content to consumers through new digital products, services and usage options, and can promote consumer access to a wide variety of high−quality content.

• Improving healthcare through innovative IT solutions Many healthcare systems around the globe are defined by both great achievement and great challenges. Breakthroughs in medical research and practice are improving and saving people’s lives. At the same time, health information is often decentralized and isolated. It is often difficult for individuals and their families to manage and share health information productively, or to navigate online and offline health resources efficiently and accurately. Microsoft’s vision for health information technology is simple: to improve health around the world. As such, Microsoft supports public policies that promote the use of electronic health records by healthcare providers, hospitals and individuals and a framework to facilitate the confidential sharing of health information. We understand that public acceptance of electronic health records is contingent on ensuring personal health data is protected and secure. Accordingly, Microsoft also supports legislative efforts, whether through specific healthcare measures or through a more comprehensive approach to privacy, to ensure that health IT offerings are built with clear, strong health privacy commitments to protect sensitive health information. Promoting a safe and secure online environment

• Ensuring a safe and secure Internet for users of all ages

Information technology is a driving force in the world economy, leading to cutting− edge developments in e−commerce, global communication, education, entertainment and many other areas. IT will continue to change our lives and offer new and exciting opportunities, particularly for the generation of people growing up in an increasingly “connected” and interdependent world. In this context, particular care is needed to protect the safety of children who are among the most vulnerable computer users. Microsoft advocates for policies that ensure a more secure information technology infrastructure – including support for effective cybercrime laws, adequate enforcement capacity and enhanced public awareness – which are essential to our societal and economic future, to public safety and to global security. In addition, Microsoft supports the rights of parents and caregivers to make educated choices for their families on the appropriateness of online content. To advance this objective, the Xbox 360 console, the Xbox Live platform, Windows Vista and Windows Live offer easy−to−use and effective parental controls allowing parents to manage their children’s online and gaming experience.

• Protecting privacy in the online environment

In today’s interconnected world, consumers worldwide are engaging in a range of online experiences which may increasingly involve the use of personal information. As such, concerns about the collection and use of personal data, widely−publicized data breaches and growing alarm about online fraud and identity theft threaten to erode public confidence in digital commerce. Microsoft is committed to addressing online privacy challenges by adopting industry−leading policies and practices designed to protect the data we collect, investing in the development of innovative privacy−enhancing technologies, empowering customers with the knowledge they need to protect themselves, partnering with others in industry on privacy−related matters and advocating the implementation of comprehensive and unified privacy legislation. In the absence of global norms around privacy, Microsoft believes that privacy regulation should apply consistently across all organizations and industries, advance international harmonization and support cross−border data flows. Such policies should empower consumers through clear notice, access to their personal information and control over this data. Furthermore, comprehensive privacy laws should be flexible and scalable, ensure appropriate levels of security, and provide guidance around breach notification.

Generated from OneReport 274/299 Microsoft Corporation Transforming education, learning and access to technology

• Transforming education

Although globalization presents challenges for every society, people who obtain the necessary education and training to compete in an increasingly knowledge−based economy will enjoy the greatest opportunities. While governments take the lead in providing public education, the private sector can and must support these efforts through both direct engagement with education institutions at all levels and advocating sound public policies and reform. Microsoft partners with governments, universities, the business community, non−profits and other institutions to support education worldwide. We support programs, such as our Partners in Learning program, and advocate for policies that provide teachers, students and parents with the tools and training they need to meet basic educational needs and promote math and science education at all levels.

• Ensuring workers at all levels have the skills they need for the digital economy Microsoft is committed to playing a leading role in helping to modernize workforce development policies and programs designed to respond to the changes in the new world of work. In today's knowledge−based economy, computer literacy has become an essential workplace skill. The goal of workforce policies should be to ensure that ultimately every job seeker, every displaced worker and every individual in the workforce has access to the education and training they need to succeed in the knowledge economy. This means embracing the concept of “lifelong learning” as part of the normal career path of workers, so everyone in the workforce can use new technologies and meet new challenges. • Promoting the deployment of the infrastructure for access

Increased broadband deployment and the emergence of Internet Protocol−based products and services are a boon for consumers, businesses and governments. To ensure that new broadband products and services emerge, and to avoid impeding the innovation of Internet protocol products and services, Microsoft supports deregulated treatment of wire−line broadband infrastructure and allowing vacant channels in the television spectrum bands to be used for wireless broadband products and services. Microsoft also advocates for the careful and creative evolution of communications regulations of Internet protocol products and services.

• Realizing the potential for information technology to advance global development

Information technology serves as a major asset in advancing global development by helping the poorest people gain broader and better access to education, health, finance, workforce training and job creation opportunities. Technology enables fast, reliable and cost effective delivery of information and services to citizens and promotes improved governance by enabling greater transparency and accountability in public services. Moreover, information technology supports community involvement in program development and implementation; ensures that governments, international organizations, NGOs and the private sector can coordinate existing development efforts; and provides a platform for future collaboration among partners. Microsoft partners with others in industry and the international development and NGO communities to help deliver on the promise of information technology, and to improve recognition and understanding among government leaders of the enabling role of technology in achieving global and local development goals.

Please explain the core positions held on each of the reported issues above and explain any significant differences between lobbying positions and state policies, sustainability goals, or other public positions: Information provided above

Information about public policy positions and priorities is made available at this Please specify: www.microsoft.com/citizenship location: Information about public policy positions and priorities is not publicly available

Generated from OneReport 275/299 Microsoft Corporation Political Contribution GRI SO6

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Public Policy / Political Contribution GRI SO6 Total value of financial and in−kind contributions to political parties, politicians, and related institutions by country. Currency: 2007 2006 2005

Countries

Total annual political contributions:

Information about total political contributions is made public: Please specify: Political contribution information is not publicly available

Political contribution details: Information on details of donations to political parties and institutions can be found at: http://www.fec.gov/finance/disclosure/disclosure_data_search.shtml.

Supporting Documentation: Microsoft Political Action Committee Federal Candidate Contr... Page #: View Microsoft Political Action Committee State Candidate Contrib... Page #: View Citizenship − Political Donations Page #: View

Generated from OneReport 276/299 Microsoft Corporation Lobbying Expenses

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Public Policy / Lobbying Expenses Please indicate Microsoft Corporation's total annual lobbying expenses. Currency: USD 2007 2006 2005

Total annual lobbying expenses: 11,870,000 8,876,279 8,705,098 C2

Information about total lobbying expenses is made public: Please specify: Lobbying expense information is not publicly available C2 "2007" total reflects the 2008 Fiscal Year total for both Federal and State expenses. Break−down as follows: Federal FY 2008 total = $9,120,000 2nd H Calendar Year 07: 4,220,000 1st H Calendar Year 08: 4,900,000 State FY 2008 total = 2,750,000 Grand Total Lobbying Expenses = $11,870,000 2006 and 2005 totals reflect Federal expenses only.

Additional Comments "2007" total above is actually the 2008 Fiscal Year total for both Federal and State expenses. Break−down as follows:

Federal FY 2008 total = $9,120,000 2nd H Calendar Year 07: 4,220,000 1st H Calendar Year 08: 4,900,000

State FY 2008 total = 2,750,000

Grand Total Lobbying Expenses = $11,870,000

2006 and 2005 totals reflect Federal expenses only.

Generated from OneReport 277/299 Microsoft Corporation Trade Associations

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Public Policy / Trade Associations What are Microsoft Corporation's trade association affiliations? Please indicate the policies and priorities of these trade associations and whether Microsoft Corporation advocates them. Trade association affiliations:

Information about trade association affiliations are made public at this location: Please specify: Trade association affiliations are not publicly available

Trade associations' policy positions and priorities and whether company advocates same postions and priorities:

Information about trade association positions and priorities and whether the company advocates them is made public at Please specify: this location: Information about trade association positions and priorities and whether the company advocates them is not publicly available

Generated from OneReport 278/299 Microsoft Corporation Aspect: Anti−Competitive Behavior

Fraud Litigation

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Anti−Competitive Behavior / Fraud Litigation Has Microsoft Corporation paid any fines/penalties/settlements or court−imposed awards in billing, deceptive marketing and/or fraud cases within the last three years? Please provide information below, including a description of the investigation or litigation, the allegations, the company's response, and the current status of any legal proceedings. Please also report any fines, penalties, or settlements paid in connection with these proceedings. Yes

Supporting Documentation: Microsoft − Presspass Legal News Page #: View Microsoft − Legal Overview Page #: View

Additional Comments Information about current legal action involving Microsoft can be found on the corporate Web site.

Generated from OneReport 279/299 Microsoft Corporation Monopoly Litigation GRI SO7

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Anti−Competitive Behavior / Monopoly Litigation GRI SO7 Total number of legal actions for anti−competitive behavior, anti−trust, and monopoly practices and their outcomes. 2007 2006 2005

Total number of legal actions for anti−competitive behavior, anti−trust, and monopoly practices C2

Please explain any litigation or controversies regarding anti−competitive behavior, anti−trust, or monopoly practices over the last three years. Include a description of the litigation, the allegations, the company's response, and current status of any legal proceedings. Please also report any fines, penalties, or settlements paid in connection with these proceedings: For many years, Microsoft has been the leading developer of software for personal computers, particularly operating system software. As such, Microsoft is continuously scrutinized by competition law agencies throughout the world. Over the past three years, the proceedings with the greatest worldwide impact have been those undertaken by the United States and the European Union.

In the United States Microsoft operates under a consent decree (and associated court) order governing various aspects of Microsoft’s operating system business. Microsoft has been adhering to this decree since December 2001. The decree controls various aspects of how certain features are included in the Windows PC operating system and Microsoft’s relationships with computer manufacturers and others. The decree also obligates Microsoft to make certain of its proprietary protocol technology available to others. Microsoft is continuously working to improve the technical documentation through which it shares this technology, under the supervision of state and federal competition law agencies, and the court.

In Europe, the Court of First Instance issued a decision in September 2007 dismissing Microsoft’s application to annul a March 2004 Decision against the company. The Decision found that it was unlawful for Microsoft to offer the Windows PC operating system with media playback software if it did not also offer a version of Windows without media playback software. Microsoft has since made such a new version available, as required by the Decision. The Decision also determined that Microsoft unlawfully refused to share certain protocol technology with its competitors. The technology is now available. Microsoft is continuing to work closely with the European Commission to identify and address other competition law concerns regarding the company’s business.

Pending private cases in the US are: (note that anyone can file a case and there is basically no downside to filing one, so the fact of a case existing is a reflection of an opportunity for recovery more than any claimed bad acts by MS) Mississippi consumer overcharge case, brought by state attorney general (similar to private class actions we’ve seen in many other cases, but Mississippi has no class action provision). Arizona government entities class action case (Daisy Mountain) (similar to the California follow−on governmental entities class action to the private class action settlement) GO—pending in California state court (all federal law claims dismissed). GO claims it is the successor in interest to a company in the early 90s that made pen−entry computing products, which it claims were damaged by MS. The court has limited the claims and potential damages to 2001 and after—long after the original company went out of business. Discovery is on−going regarding whether anything occurred since 2001 to give rise to either any liability or any damages to plaintiffs. Novell—claim relates to their ownership of WordPerfect from 1994−1996. Most claims have been dismissed as time−barred, but two causes of action remain asserting claims of harm to Novell’s applications (word processing and spreadsheet) business due to actions in Microsoft’s operating systems business. C2 Please see below section for details.

Supporting Documentation: Microsoft − Presspass Legal News Page #: View Microsoft − Legal Overview Page #: View Overcharge Class Action settlements Page #: View

Additional Comments Information about current legal action involving Microsoft can be found on the corporate Web site vis pages listed above.

Generated from OneReport 280/299 Microsoft Corporation Aspect: Compliance

Tax Disputes

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Compliance / Tax Disputes Please provide the information requested below regarding any tax disputes Microsoft Corporation has been involved in with the U.S. Internal Revenue Service or any other country. Please be sure to upload additional information as relevant. Alleged Liability Date Unit Amount and Currency

Withholding taxes on software revenue FY 96 – FY 05 India USD $ 266 C2 million

Transfer pricing FY 99 – FY 04 France USD $ 71 million

C2 Note: In India we have paid the disputed tax and are seeking a refund.

Supporting Documentation: Microsoft 2008 10K Page #: 15 View

Additional Comments We may have additional tax liabilities. We are subject to income taxes in the United States and many foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We regularly are under audit by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on our financial position, results of operations, or cash flows in the period or periods for which that determination is made.

Generated from OneReport 281/299 Microsoft Corporation Non−Compliance w/ Law Fines GRI SO8

5. Management Approach and Performance Indicators / Society / Society Performance Indicators / Aspect: Compliance / Non−Compliance w/ Law Fines GRI SO8 Monetary value of significant fines and total number of non−monetary sanctions for non−compliance with laws and regulations (e.g. human rights). Company has identified non−compliance with laws or regulations Company has not identified non−compliance with laws or regulations

Currency: 2007 2006 2005

Total monetary value of significant fines €280 million C4

Total number of non−monetary sanctions

Cases brought through dispute resolution mechanisms C6 C4 Please see additional details below. C6 Please see additional details below.

Additional Comments The European Commission has issued three fines against Microsoft in connection with the matter described above. In March 2004, the Commission imposed a fine of €497 million as part of its Decision concerning Windows and protocol sharing. In July 2006, the Commission imposed a fine of €280 million for alleged failure to produce satisfactory technical documentation. Microsoft appealed that fine, but later chose to withdraw the appeal. In February 2008, the Commission imposed a fine of €899 million for allegedly pricing its technical documentation too high. Microsoft has appealed that fine, and its appeal is pending.

Generated from OneReport 282/299 Microsoft Corporation Product Responsibility

Product (Optional)

5. Management Approach and Performance Indicators / Product Responsibility / Product (Optional) / Product (Optional) This optional data request is provided to allow Microsoft Corporation to report data or information regarding Product Responsibility issues that is not specifically requested by research firms. You may add introductory or summary information, or cover specific items not addressed by research firms.

Generated from OneReport 283/299 Microsoft Corporation Product Responsibility: Disclosure on Management Approach

Product Stewardship

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility: Disclosure on Management Approach / Product Stewardship Please provide information about Microsoft Corporation's corporate statement or policy on product stewardship, and any sector standards relating to product stewardship that Microsoft Corporation applies. Upload relevant documents and/or Web addresses. Company has a corporate statement or policy on product stewardship, and it is publicly available Company has a corporate statement or policy on product stewardship, but it is not publicly available Company is currently developing a public policy Company does not have a corporate statement or policy on product stewardship

Please provide details on any sector standards relating to product stewardship that the company applies:

Supporting Documentation: Microsoft Environmental Principles Page #: View

Generated from OneReport 284/299 Microsoft Corporation Product Responsibility Disclosure on Mgmt. Approach GRI PR

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility: Disclosure on Management Approach / Product Responsibility Disclosure on Mgmt. Approach GRI PR DISCLOSURE ON MANAGEMENT APPROACH Provide a concise disclosure on the following Management Approach items with reference to the Product Responsibility Aspects:

• Customer Health and Safety; • Product and Service Labeling; • Marketing Communications; • Customer Privacy; and • Compliance.

One of our core areas of responsible leadership related to our productts is privacy and security. As a developer of leading software and Internet technologies and services, Microsoft takes seriously its responsibility to help address the security and privacy challenges of the information−based society, from viruses and spyware to spam and online identity theft. We recognize the challenges that organizations face in managing personal and confidential data, guarding against privacy breaches, and balancing business needs with strict legislative, regulatory, and compliance requirements. We understand the responsibility and concern of parents who worry about their children's exposure to inappropriate content and potentially dangerous interactions on the Web. In response, Microsoft works closely with the computing industry, governments, law enforcement agencies, and communities worldwide on legislation and programs that address these important concerns. In addition, we offer technologies that help safeguard personal information, improve people's control over what they see on their computer screens, and strengthen IT network defenses against intrusions. More information is posted on this at http://www.microsoft.com/About/CorporateCitizenship/US/SecurityPrivacy.mspx.

Generated from OneReport 285/299 Microsoft Corporation Satisfaction/Customer

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility: Disclosure on Management Approach / Satisfaction/Customer Please describe Microsoft Corporation's quality/customer satisfaction policy or program including standards for dealing with customers. This may be uploaded. Please indicate where it or other relevant information is published, and select all that apply below. The company publishes: separate reports addressing customer issues information on customer issues on website information on customer issues in annual report

These reports contain: description of management system case studies and examples quantitative data on quality or customer satisfaction formal policy statement on customer issues formal policy statement on quality or customer satisfaction

Public customer reports Yes are externally verified No

Please indicate URL for http://www.microsoft.com/about/corporatecitizenship/citizenship/businesspractices/Customerspartners.mspx published policy here:

The policy: addresses relevant company activities and significant impacts or issues identified is approved by relevant board is available throughout the company is regularly reviewed and updated is in the public domain

Please indicate the percentage of the company that the policy covers:

Does the company have a Yes C7 quality or customer satisfaction program in No place?

Please provide evidence of improved relationships with customers

C7 Molly von Mitschke Collande [mollyvmc] can help with the Customer Service and Support/Customer Feedback verification

Additional Comments Every year, we conduct a comprehensive survey called the Microsoft Worldwide Customer and Partner Satisfaction Study. The most recent study resulted in more than 40,000 completed customer and partner interviews in 70 locations worldwide. The survey data is not public, but we can confirm that the high−priority issues among our customers and partners are product quality and values, security, licensing, technical support, and the ease of doing business with Microsoft.

Generated from OneReport 286/299 Microsoft Corporation Quality Management

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility: Disclosure on Management Approach / Quality Management Does Microsoft Corporation participate in or have a quality management/customer satisfaction program that includes any of the following monitoring activities? Please upload all related documents describing the managerial/organizational structure of such systems/programs, including the title of the highest ranking officer responsible for them. Select all that applies to Microsoft Corporation's quality management/ customer satisfaction system below. Internal quality audits Third party quality audits Internal customer satisfaction surveys/audits Third party customer satisfaction surveys/audits Goal setting for customer satisfaction Goal setting for quality Cash awards for employees based on quality programs Non−cash awards for employees based on quality programs Employee training in customer satisfaction Employee quality training Does the company's quality management system cover all facilities worldwide? Please specify:

Generated from OneReport 287/299 Microsoft Corporation Customer Feedback

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility: Disclosure on Management Approach / Customer Feedback How does Microsoft Corporation integrate customer feedback? Please upload documentation, and select all that apply below. Company−wide harmonized customer database, including marketing, order, fulfillment and customer service history Free 7 day/24 hour feedback possibilities via internet, phone, or mail. Please specify: Integration of feedback into product/services development Customers' complaints feedback to compliance officers and/or risk managers and/or communications officers Corporate ombudsman for complaints, please indicate name: Please specify: Staff training Satisfaction targets No such approach

Generated from OneReport 288/299 Microsoft Corporation Product Responsibility Performance Indicators

Aspect: Customer Health and Safety

Bioengineering

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Customer Health and Safety / Bioengineering Please provide the information requested below regarding Microsoft Corporation's involvement with bioengineering for food and/or crops. Level of involvement % of revenues Type of involvement

Genetically modified organisms

Genetic engineering

Genetically modified crops

Other bioengineering for food

Company contact for further information:

No Data Provided because: Not Applicable

Generated from OneReport 289/299 Microsoft Corporation Product Safety Assess GRI PR1

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Customer Health and Safety / Product Safety Assess GRI PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. Product/service life cycle stage Health and safety impacts assessed for improvement

Development of product concept Yes

R&D Yes

Certification Yes

Manufacturing and production Yes

Marketing and promotion No

Storage distribution and supply No

Use and service Yes

Disposal, reuse, or recycling Yes

2007 2006 2005

Percentage of significant product or service categories that are covered by and assessed for compliance with company procedures for assessing product/service health and safety impacts:

Generated from OneReport 290/299 Microsoft Corporation Product Health &Safety Non−compliance GRI PR2

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Customer Health and Safety / Product Health &Safety Non−compliance GRI PR2 Total number of incidents of non−compliance with regulations and voluntary codes concerning health and safety impacts of products and services, by type of outcomes. Company has identified non−compliance with regulations or voluntary codes regarding the health and safety of its products/services Company has not identified non−compliance with regulations or voluntary codes regarding the health and safety of its products/services

2007 2006 2005

Total number of incidents of non−compliance with health and safety regulations resulting in a fine or penalty:

Total number of incidents of non−compliance with health and safety regulations resulting in a warning:

Total number of incidents of non−compliance with voluntary codes for health and safety:

Please describe any product safety controversies the company has experienced within the last three years. Include information about any fines, settlements, or court−imposed awards and indicate dates, amounts and any cases involving fatalities:

Generated from OneReport 291/299 Microsoft Corporation HSProduct Recalls

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Customer Health and Safety / HSProduct Recalls Please provide information regarding any product recalls, due to health and safety reasons, that Microsoft Corporation has undergone, uploading relevant documentation.

No Data Provided because: Not Known

Generated from OneReport 292/299 Microsoft Corporation Aspect: Product and Service Labeling

Product Information Labeling GRI PR3

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Product and Service Labeling / Product Information Labeling GRI PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements. Product/service information Required for product/service labeling

The sourcing of components of the product or service No

Content, particularly with regard to substances that might produce an environmental or social Yes impact

Safe use of the product or service Yes

Disposal of the product and environmental/social impacts Yes

Other (please explain):

2007 2006 2005

Percentage of significant product or service categories that are covered by and assessed for 100 compliance with company procedures for product and service information and labeling:

Generated from OneReport 293/299 Microsoft Corporation Labeling Non−compliance GRI PR4

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Product and Service Labeling / Labeling Non−compliance GRI PR4 Total number of incidents of non−compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes. Company has identified non−compliance with regulations or voluntary codes regarding product and service information and labeling Company has not identified non−compliance with regulations or voluntary codes regarding product and service information and labeling

2007 2006 2005

Total number of incidents of non−compliance with product and service information and labeling regulations resulting in a fine or penalty:

Total number of incidents of non−compliance with product and service information and labeling regulations resulting in a warning:

Total number of incidents of non−compliance with voluntary codes for product and service information and labeling:

Generated from OneReport 294/299 Microsoft Corporation Customer Satisfaction GRI PR5

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Product and Service Labeling / Customer Satisfaction GRI PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. In 2002, Microsoft launched the Customer & Partner Experience (CPE) Strategy, a unified framework designed to engage every Microsoft employee in a companywide effort to improve the satisfaction and overall experience of Microsoft customers and partners. The CPE Strategy focuses on three critical areas identified through customer and partner surveys:

1. Product Quality and Security − Our goal is to consistently provide customers and partners with innovative, high−quality products and services. 2. Relationship Excellence − We actively seek customer and partner feedback, listen carefully their needs and concerns, and respond with concrete action to address issues. 3. Ease of Doing Business with Microsoft − On issues ranging from product licensing to support, we are improving our business processes and making it easier for customers and partners to interact with Microsoft.

Today, Microsoft has integrated this strategy to a greater extent than ever before. Our Global Relationship Study polls more than 2 million Microsoft customers and partners worldwide to find out what they think of our products and performance. We gather additional information through usability studies, product−feedback technologies, online feedback, and research.

That information has a direct effect on Microsoft product design and development. For example, before Office XP and Windows XP were shipped, Windows Error Reporting features built into both products enabled Microsoft to fix 70 percent of all crash−causing issues that were reported for Office. Customer and partner feedback also helps us to improve our business processes, to make long−term, systemic changes, and to prevent or mitigate future problems.

We further enhance our relationships with customers and partners through our support of online communities, such as the Microsoft Developer Network (MSDN), TechNet for IT professionals and the Microsoft Most Valuable Professionals (MVPs) −− a worldwide network of outside experts who provide our customers and partners with advice on 90 different Microsoft technologies. Every month, for example, more than 2.3 million customers worldwide take advantage of security guidance and free tools on TechNet. Microsoft also has provided free security training and professional development to more than 2 million IT Professionals, and more than 1.2 million customers receive monthly security newsletters with proactive security guidance.

Since 2003, Response Management −− a global system that directs feedback from our field teams and partners to the internal teams responsible for improvement and escalates complaints as necessary −− has managed over 700,000 non−technical customer and partner issues. The majority of these are now resolved in the customer’s favor in five business days or less. Microsoft also supports a worldwide program that addresses “top” issues − those with broad or severe impact on our customers and partners. In fiscal year 2003, Microsoft resolved approximately 75 percent of these top issues in favor of customers or partners. In fiscal year 2007, our success rate has climbed to nearly 96 percent.

We have also made it easier to do business with Microsoft by simplifying product licensing and making significant improvements in service and support. For example, we consolidated our product licensing agreements, reducing by 50−85 percent the length of our contracts and the number of contracts available. We also reduced the number of product licensing models we use from 70 to nine, trimmed the length of our Product Use Rights by half, and rewrote the document so that Microsoft product usage is easier for our customers and partners to understand.

Today, customer and partner satisfaction at Microsoft is at an all−time high. But that is just the beginning.

Our goal is to give our customers and partners the best end−to−end experience possible and to become a satisfaction leader in the technology industry. The better we are at listening and responding to customers, improving product quality and security through continuous innovation, and making it easier for people to do business with us, the more we satisfy our customers and partners and the closer we come to our ultimate goal.

Generated from OneReport 295/299 Microsoft Corporation Aspect: Marketing Communications

Marketing Law Programs GRI PR6

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Marketing Communications / Marketing Law Programs GRI PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. Communication: We apply standards of full, fair, accurate, timely, and understandable disclosure in reports and documents that are filed or submitted to the Securities and Exchange Commission, and in other public communications as well. We establish and maintain clear, honest, and open communications; listen carefully; and build our relationships on trust, respect, and mutual understanding. We are accountable and responsive to the needs of our customers, consumers, and partners and take our commitments to them seriously. Our advertising, sales, and promotional literature seeks to be truthful, accurate, and free from false claims.

Supporting Documentation: Microsoft − Standards of Business Conduct Page #: View

Generated from OneReport 296/299 Microsoft Corporation Marketing Non−compliance GRI PR7

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Marketing Communications / Marketing Non−compliance GRI PR7 Total number of incidents of non−compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes. Non−Compliance with Regulations and Voluntary Codes Concerning Marketing Communications 2007 2006 2005

Total number of incidents of non−compliance with regulations resulting in a fine or penalty:

Total number of incidents of non−compliance with regulations resulting in a warning:

Total number of incidents of non−compliance with voluntary codes:

Generated from OneReport 297/299 Microsoft Corporation Aspect: Customer Privacy

Customer Privacy Breach GRI PR8

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Customer Privacy / Customer Privacy Breach GRI PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. Company has identified substantiated complaints of breaches of customer privacy Company has not identified substantiated complaints of breaches of customer privacy

2007 2006 2005

Total number of complaints concerning breaches of customer privacy received from outside parties and substantiated by the organization:

Total number of complaints concerning breaches of customer privacy received from regulatory bodies:

Total number of identified leaks, thefts, or losses of customer data:

Generated from OneReport 298/299 Microsoft Corporation Aspect: Compliance

Total Non−compliance Fines GRI PR9

5. Management Approach and Performance Indicators / Product Responsibility / Product Responsibility Performance Indicators / Aspect: Compliance / Total Non−compliance Fines GRI PR9 Monetary value of significant fines for non−compliance with laws and regulations concerning the provision and use of products and services Company has identified non−compliance with laws or regulations regarding the provision and use of products Company has not identified non−compliance with laws or regulations regarding the provision and use of products

Currency: 2007 2006 2005

Total monetary value of significant administrative or judicial sanctions levied for failure to comply with laws or regulations, including international declarations, conventions, treaties, and national, sub−national, regional, or local regulations regarding the provision and use of company's products and services:

Generated from OneReport 299/299 Microsoft Corporation