Our Approach to Environmental, Social, and Governance (ESG) Reporting
Microsoft strives to conduct business in ways that are principled, transparent, and accountable to ourshareholders and other key stakeholders. We believe doing so generates long-term value for our company,
our customers, and our communities. As we work to help everyone achieve more, we are committed toimproving our world and reporting our progress.

Our Commitment to Societal Impact
Fundamental to Microsoft’s mission is realizing our enormous opportunity and responsibility to createtechnology that benefits everyone on the planet, as well as the planet itself. To do so, we focus on four,interconnected pillars:
Support inclusive
economic growthProtect
fundamental rights

Create asustainable future

Earn trust

Trust and Accountability
Earning the trust of our customers, partners, shareholders, and other stakeholders is the foundation of ourbusiness success and is fundamental to realizing our mission to empower every person and everyorganization on the planet to achieve more. We seek to earn trust by holding ourselves accountable andpublicly reporting on our policies, practices, and performance, providing our stakeholders visibility into how
we are meeting our commitments and responsibilities. We believe our position in the world demands it, andrecognize it is critical to fostering both long-term business success and societal impact.

Centralized ESG Disclosure
Our Reports Hub at www.microsoft.com/transparency provides a consolidated, comprehensive view of ourESG reporting and data, ranging from our carbon footprint to workforce demographics to political
donations. The Reports Hub hosts broad company reports, overviews of our efforts such as ourcontributions the UN Sustainability Development Goals, and standalone reports that provide in-depth
information on our commitments and progress on topics including environmental sustainability, diversityand inclusion, human rights, privacy, and our Racial Equity Initiative, as well as links to additional data on awide range of ESG topics. 1Please note that a number of documents on the Reports Hub may include estimates, projections, and other “forward-lookingstatements” within the meaning of the Private Securities Litigation Reform Act of 1995, section 27A of the Securities Act of 1933, andsection 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,”“project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”“will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations andassumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks anduncertainties that could cause actual results and events to differ materially in our reports filed with the Securities and ExchangeCommission. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of newinformation, future events, or otherwise.

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Reporting Standards
We inform our disclosure strategies with careful consideration of commonly used global standards such as
sector-based materiality maps provided by the Sustainable Accounting Standards Board (SASB), the United
Nations Guiding Principles on Business and Human Rights Reporting Framework, and the UN Sustainable
Development Goals. We also follow issue-specific standards such as the Greenhouse Gas Protocol and EEO1 diversity disclosure.

ESG Materiality
Many stakeholders seek to understand how companies prioritize ESG topics of importance to their businessand to the world. Our ESG reporting describes those topics which we consider to be the most important tostakeholders when evaluating environmental, social, and governance matters at Microsoft. Therefore, ESG
materiality in our reporting does not directly correspond to the concept of materiality used in the securities
laws and U.S. Securities and Exchange Commission rules.
Microsoft’s prioritization across ESG topics includes a wide range of strategic planning processes by oursenior management and many others across the enterprise, and includes stakeholder input and carefulconsideration of the impacts of our core businesses as they evolve. Our Board of Directors also provides
insights, feedback, and oversight across a broad range of environmental and social matters, as detailed
in our annual proxy statement. In 2021, Microsoft consulted with Business for Social Responsibility tovalidate our ESG priorities and disclosure strategies. In collaboration with BSR, we currently identify andcategorize our top ESG topics as:• Climate and Energy• Ethics and Integrity (including governance, responsible competition, responsible AI, responsible policyengagement)• Human Capital (including culture and development, diversity & inclusion, engagement, andwell-being)• Human Rights• Natural Resources (water, waste, and ecosystems)• Privacy and Data Security/Cybersecurity• Inclusive Economic Opportunity (including accessibility, skilling, racial equity)• Responsible Sourcing (including product lifecycle management)

SASB Reference Index
As noted above, the Sustainability Accounting Standards Board (SASB) voluntary industry-specific disclosure
standards are among those we consider in shaping our disclosures. Below we provide an index to ourcurrent disclosures that most relate to the current SASB Technology and Communications Sector – Softwareand IT Services Standard. As indicated in the table, we disclose many of SASB’s suggested indicators in fullor partially, while some we do not currently disclose. We will continue to evaluate and enhance ourdisclosures over time based on stakeholder feedback. Each disclosure cited is available on the MicrosoftReports Hub at www.microsoft.com/transparency unless otherwise specified.

2SASB Topic
Environmental
Footprint ofHardware
Infrastructure

SASB Accounting Metric[and code]
1. Total energy consumed

2. Percentage grid electricity
3. Percentage renewable[TC-SI-130a.1]

Data Privacy &Freedom ofExpression

Numerous metrics related to energy consumption
and percentage of renewable energy consumed aredisclosed in 2021 Environmental Sustainability
Report Appendix D (starting on page 98).
Percentage grid electricity is not directly reported
but the reported data on electricity use indicate thepercentage grid electricity approaches 100% (with ade minimis amount off onsite generation). Notethat Microsoft uses the operational control
approach for setting organizational boundaries of
GHG emissions and energy. This includes global
wholly owned and partially owned subsidiaries overwhich Microsoft has management and operationalcontrol, including Microsoft owned and leased realestate facilities.

1. Total water withdrawn

Disclosed in 2021 Environmental Sustainability
Report Appendix D (page 102). Note that Microsoft
uses the operational control approach for settingorganizational boundaries of water metrics. This
includes global wholly owned and partially owned
subsidiaries over which Microsoft has management
and operational control, including Microsoft owned
and leased real estate facilities.

Discussion of the integration ofenvironmental considerations
into strategic planning for data
center needs [TC-SI-130a.3]

Described throughout 2021 Environmental
Sustainability Report and discussed in Supporting
our customers on the path to net zero: The
Microsoft cloud and decarbonization – The Official
Microsoft Blog

2. Total water consumed,
percentage of each inregions with High orExtremely High Baseline
Water Stress [TC-SI-130a.2]

SASB TopicRelated Microsoft Disclosures

SASB Accounting Metric[and code]
Description of policies andpractices relating to behavioral
advertising and user privacy[TC-SI-220a.1]

Related Microsoft Disclosures
Disclosed in Microsoft Privacy Statement details
Microsoft’s limitations on behavioral advertising.

3

SASB Topic
Data Privacy &Freedom ofExpression

SASB Topic
Data Security

SASB Accounting Metric[and code]

Related Microsoft Disclosures

Number of users whose
information is used forsecondary purposes[TC-SI-220a.2]

The Microsoft Privacy Statement explains thepersonal data Microsoft processes, how Microsoft
processes it, and for what purposes. The company
does not specifically disclose TC-SI-220a.2.

Total amount of monetary losses
as a result of legal proceedings
associated with user privacy[TC-SI-220a.3]

Disclosed in annual Form 10-K if material; nomaterial losses disclosed for FY2022.

1. Number of law enforcement
requests for user information
2. Number of users whose
information was requested
3. Percentage resulting in
disclosure [TC-SI-220a.4]

Disclosed semi-annually in Law Enforcement
Requests Report.

List of countries where coreproducts or services are subject
to government-required
monitoring, blocking, content
filtering, or censoring[TC-SI-220a.5]

Disclosed semi-annually in Government Requests
for Content Removal Report

SASB Accounting Metric[and code]

Related Microsoft Disclosures

1. Number of data breaches
2. Percentage involving
personally identifiable
information (PII)
3. Number of users affected[TC-SI-230a.1]

The company does not specifically disclose
TC-SI-230a.1. However, the Microsoft Digital
Defense Report aggregates insights, data, andsignals from across Microsoft, including the cloud,endpoints, and the intelligent edge to help theglobal community strengthen the defense of thedigital ecosystem.

Description of approach toidentifying and addressing
data security risks, including
use of third-party cybersecurity
standards [TC-SI-230a.2]

Disclosed at Microsoft security operations

4

SASB Topic
Recruiting &Managing a
Global, Diverse, &Skilled Workforce

SASB Accounting Metric[and code]
Percentage of employeesthat are:1.

Foreign nationals and2.

Located offshore[TC-SI-330a.1]

Related Microsoft Disclosures
The company does not specifically disclose
TC-SI-330a.1. The company does disclose
employee headcount worldwide, in the U.S., andinternationally at Facts About Microsoft.

Employee engagement asa percentage [TC-SI-330a.2]

The company does not specifically disclose
TC-SI-330a.2. Microsoft discloses data on employee
sentiment in the 2022 Global Diversity andInclusion Report.

Percentage of gender andracial/ethnic grouprepresentation for:Disclosed in the 2022 Global Diversity and Inclusion
Report.

1.

Management

2.

Technical staff, and3.

All other employees[TC-SI-330a.3]

SASB Topic

SASB Accounting Metric[and code]

IntellectualProperty
Protection &Competitive
Behavior

Total amount of monetary losses
as a result of legal proceedings
associated with anticompetitive
behavior regulations[TC-SI-520a.1]

Related Microsoft Disclosures
Disclosed in annual Form 10-K if material; nomaterial losses disclosed for FY2022.

5SASB TopicManaging
Systemic Risks
from TechnologyDisruptions

SASB Accounting Metric[and code]
Number of:1.

Performance issues and2.

Service disruptions

3.

Total customer downtime[TC-SI-550a.1]

Description of business
continuity risks related todisruptions of operations[TC-SI-550a.2]

SASB Topic
Activity Metrics

SASB Accounting Metric[and code]
1. Number of licenses orsubscriptions
2. Percentage cloud based[TC-SI-000.A]

Related Microsoft Disclosures
The company does not specifically disclose
TC-SI-550a.1. Performance issues and service
disruptions are among the topics discussed at
Microsoft Tech Community.

Disclosed in annual Form 10-K available at
Microsoft SEC Filings.

Related Microsoft Disclosures
Microsoft uses different KPIs to communicate ourbusiness performance to investors than thosesuggested by SASB. Microsoft’s KPIs
are included in our annual Form 10-K andquarterly 10-Q filings and available atwww.microsoft.com/investor.

1. Data processing capacity
2. Percentage outsourced[TC-SI-000.B]1. Amount of data storage
2. Percentage outsourced
3. [TC-SI-000.C]

6