Integrity built-in. Microsoft Devices Sustainability Report FY20 Executive Summary Message from Panos Panay, Chief Product Officer 2 Our mission is to empower every We are committed to driving innovation that This includes our growing efforts to reduce person and every organization on helps people accomplish more and fosters carbon emissions, design waste out of our the planet to achieve more. a more sustainable future together with our products, use renewable resources, hold What does integrity customers, suppliers, and partners. suppliers to higher ethical standards in our sourcing, and expand protocols to ensure It depends on continuously pushing the Earlier this year, Microsoft made a workers’ health and safety. built-in mean to me? boundaries of technology in almost every commitment to become carbon negative facet of the product and processes we use, by 2030. To contribute towards achieving We know that we have only just begun “ The integrity we build into and more importantly, in the ways we can this goal, integrity must be built into every our journey with much to learn. With sustain a healthy planet. our products is the reason product we make. That means our design every challenge, we find opportunities We believe that our products reflect the process integrates our focus on the customer to learn, adapt, and aspire to bigger goals. we share them with the world. people that make them and that use them. and building products of the highest quality, The passion and commitment you all have We believe in these products That’s why we continue to push ourselves with a responsible supply chain that meets for sustainability will help us further to set higher standards and goals to further higher ethical and environmental standards. our efforts and enable us to set higher 100%. If we don’t believe in reduce the impact our products have on standards year on year. them, then why should the the world around us. Thank you for grabbing an oar with us. world believe in them?” During the last year, we’ve seen our Windows Together we’ll continue to collaborate and Devices business continue to grow as on the policies, practices, and products people use our products to safely connect, for our customers and a sustainable future. work, and learn. From frontline healthcare workers developing new tele-health protocols with patients, to communities collaborating on social justice, to students using our products to continue learning remotely from home… our customers Panos Panay, Chief Product Officer inspire us every day. Download our Sustainability Report FY20 The Surface Pro X is the most efficient Pro Microsoft has made when using the ENERGY STAR Computer Specification version 8.0 test method. Microsoft Devices Sustainability Report FY20 Executive Summary This FY20 report details our progress and efforts, including the following key results and goals: 3 Product design Responsible sourcing Product use Climate and environment Key results and goals Key results Key results and goals Key results and goals * 37 % * % % of units fulfilled by carbon neutral % fulfillment centers by 2021 100 recyclable packaging 99.5 of audited factories 91 Surface Laptop 3 assessed and Surface devices in China have access to be 91% recyclable by 2030 to the Workers’ Voice k Hotline for grievance 825 reporting Xbox consoles obtained Carbon Neutral® certification 20 %* 100% b 2030 post-consumer recycled content new suppliers are qualified and 1 Windows 10 Microsoft carbon negative in new Surface Dock 2 reviewed prior to onboarding powering 1 billion active devices %* k monthly 2x 10 5.4 Surface Pro 7 and packaging contain Pilot project to develop new material factory workers were reimbursed more than 2x the average global containing 10% ocean plastic $275k in recruitment fees and circular resources insufficient payments 6 Find out more 7 Find out more 8 Find out more 9 Find out more * (w/w) Microsoft Devices Sustainability Report FY20 Executive Summary About Microsoft Devices 4 Our mission: Build extraordinary products Our products How are we doing? Our products include Windows, Surface computers, Surface accessories, that create and complete magical Xbox, other intelligent devices and PC accessories. # experiences to empower every person 3 Forbes World’s Most Reputable and every organization on the planet Companies for Corporate to achieve more. 2. Responsibility 2019 # Our organization 6 We are responsible for the ideation, Corporate Responsibility Magazine’s compliance, design, development, sourcing, 100 Best Corporate Citizens 2019 manufacturing, packaging and distribution 100+ countries of operation of Microsoft’s hardware, packaging and # related software products. 1 Devices is committed to increasing the Responsible Sourcing Network sustainability of Microsoft’s products and Mining the Disclosures 2019: supply chain. Our mission pushes us to 2,748 Application Software category create technologies that unlock potential employees 3. for people, the planet and organizations. Find out more about the journey of our products on page 8 of our Sustainability Report FY20 A List for corporate Climate Action, CDP 418 1. directly contracted supplier factories 1. Surface Pro X 2. HoloLens 3. Arc Mouse Built for web-first An untethered mixed Slim, light and ready experiences, ultra-thin reality device with to travel. and always connected, apps and solutions that 94 1 different products shipped combining blazing-fast enhance collaboration. LTE with 2-in-1 versatility. 1 Excluding variants and SKU bundles. Microsoft Devices Sustainability Report FY20 Executive Summary Our sustainability strategy 5 We’ve launched new targets to reduce Our Sustainability 2030 ambitions We’re launching an ambitious new hazardous substances and increase strategy for 2030 and raising our level repairability, recyclability and circularity. Healthy Design of commitment to have a positive impact Healthy Planet Our Healthy Planet strategy addresses carbon Sustainable design on people, the planet and organizations. emissions, waste and water across the product Increase recycled content Incorporate 100% recycled, lifecycle – from sourcing to end-of-life. and renewable materials renewable or responsibly sourced across the portfolio content in packaging As we reach the end of our 2020 Sustainability In FY19, we set a science-based target for Microsoft’s bold environmental Goals, we are setting our sights on a bold new Scope 3 carbon reductions to be achieved commitments for 2030 environmental sustainability strategy and by 2030. Approved by the Science Based targets for 2030, while continuing to deliver Targets initiative (SBTi), in September 2019, Reduce hazardous substances In 2020, Microsoft announced three our Responsible Sourcing commitments. our target establishes how we will help Replace brominated flame Eliminate beryllium Reduce volatile organic bold commitments: tackle the climate crisis by reducing Healthy Design, Healthy Planet is how retardants in resins from metal alloys compounds in coatings emissions across our value and supply • To be carbon negative by 2030 and, by Devices will deliver Microsoft’s environmental chains, in line with what is needed to 2050, to remove from the environment sustainability commitments beyond 2020. keep global warming below 2°C from all the carbon the company has emitted pre-industrial levels. either directly or by electrical consumption Healthy Design Healthy Planet since it was founded in 1975. Our Healthy Design strategy embeds We’ve also set a 2030 “zero waste” goal for Surface devices and packaging and we • To preserve and protect the species, sustainability into product and packaging Carbon negative biodiversity and ecosystems that are design and development. Healthy Design have committed to expand our consumer vital to the planet’s health. drives innovation to reduce environmental mail-back program for hardware and Reduce Scope 3 carbon emissions packaging worldwide. • Achieve zero waste for Microsoft’s direct impacts and address challenges across by 30% and aspire to reduce carbon emissions by more than half operations, products and packaging the value chain – from extraction of raw Read more about our strategy and Microsoft’s by 2030.1 materials to production, distribution, bold, new environmental commitments on product use and end-of-life. page 11 of our Sustainability Report FY20 As a business group within Microsoft, We use ecodesign to guide our approach Zero waste products and packaging we are aligning our strategy and goals and product environmental lifecycle to support these commitments. Achieve Accomplish Expand mail-back Increase assessments to inform our decisions, We will announce more 100% recyclable 100% recyclable program for Microsoft the circularity 1 Microsoft commits to achieve ‘zero waste’ goals by 2030 from concept to manufacturing. Surface devices packaging branded electronics of our products https://blogs.microsoft.com/blog/2020/08/04/microsoft-direct- Sustainability 2030 goals operations-products-and-packaging-to-be-zero-waste-by-2030/ and packaging and packaging Healthy Design shapes our customer throughout FY21, bringing our worldwide solutions, such as finding ways to bring repair closer to the customer. ambitions to life with measurable targets and commitments. Microsoft Devices Sustainability Report FY20 Executive Summary Product design 6 The sustainability of our products Using ocean plastics Key outcomes in FY20 and packaging begins with their in consumer products Why does sustainability design. We focus as much of