Microsoft’s Approach to Carbon Emissions in the Supply Chain

As a Microsoft Supplier, it is essential for your business to uphold compliance with the Microsoft Supplier Code of Conduct. An important update in the latest Microsoft Supplier Code of Conduct (2022) is found in section 6, point G, where Microsoft has introduced a new requirement. According to the clause, suppliers are now mandated to disclose comprehensive, consistent, and precise scope 1, 2, and 3 greenhouse gas (GHG) emissions data, along with the necessary components for calculating GHG emissions data. This disclosure should be made through the Carbon Disclosure Project (CDP) or an alternative method specified by Microsoft. Additionally, suppliers may be requested to provide independent or third-party assurance regarding the accuracy of the disclosed emissions data.

Microsoft has outlined in its sustainability commitments that the company plans to be carbon negative by 2030. To achieve this goal, the company has stated that it is crucial that they partner with suppliers and together tackle the company’s largest source of emissions, supply chain or scope 3 emissions.

The Microsoft Supplier Code of Conduct (SCoC) section 6.11, requires suppliers provide independent, third-party assurance (also referred to as independent third-party verification or attestation) over GHG emissions data.

The code further states that suppliers are required to obtain independent third-party assurance over five minimum GHG emission scopes and categories also required to be disclosed (even if zero or immaterial). If zero or immaterial, the assurance provider must verify that emissions for that scope and/or category are in fact, zero or immaterial. Scopes and categories include:

1. Scope 1
2. Scope 2
3. Scope 3 Category 1: Purchased Goods and Services
4. Scope 3 Category 6: Business Travel
5. Scope 3 Category 7: Employee Commuting

The assurance requirement applies to total-company emissions and not service level accounting (SLA) emissions.

In addition to Microsoft, other prominent companies have implemented similarly rigorous sustainability frameworks for their suppliers, highlighting the growing momentum toward environmental responsibility across industries:

• Apple requires its suppliers to adhere to strict environmental standards, focusing on reducing carbon emissions, water use and waste. As part of its goal to be carbon neutral across its entire supply chain by 2030, Apple mandates that suppliers transition to 100% renewable energy and provide comprehensive emissions disclosures. Suppliers are also held accountable for responsible sourcing of materials, such as recycled or ethically sourced metals, ensuring they align with Apple’s broader sustainability goals.
• Amazon, through its Climate Pledge, aims to achieve net-zero carbon emissions by 2040, and it is urging its suppliers to follow suit. Suppliers are expected to disclose their GHG emissions and set science-based targets to reduce their environmental impact. Amazon’s commitment extends to sustainable packaging initiatives, requiring suppliers to innovate in reducing waste and incorporating recyclable materials. By establishing these ambitious sustainability goals, Amazon is pushing for greater transparency and environmental accountability across its supply chain.
• Walmart’s ambitious program, Project Gigaton, aims to reduce one billion metric tons (a gigaton) of emissions from its global value chain by 2030. Walmart encourages its suppliers to focus on key areas like energy, waste, packaging, deforestation and product design to drive down emissions. Walmart evaluates suppliers using a sustainability index that measures environmental and social practices, helping to identify areas for improvement.

While independent third-party assurance provides a layer of credibility and confidence behind the completeness and accuracy of disclosed emissions, we understand that this can be an intimidating endeavor, particularly for those new to the business emissions reporting journey and greenhouse gas protocols.

At Weaver, we understand the complexity of navigating these evolving supplier requirements. In today’s business environment, sustainability has evolved from a competitive advantage to a fundamental requirement, especially for companies operating within global supply chain. Our ESG Strategy Consulting services are designed to support companies in their efforts to comply with the stringent sustainability standards set by corporations like Microsoft, Apple and Amazon. From emissions reporting and independent assurance to developing tailored decarbonization strategies, we empower your business to meet these high standards and also elevate your business profile. Contact us to learn more.

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