Summary
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Details
- Global
Suppliers: Third party companies supplying goods or services to Microsoft.
Partners: Companies working with Microsoft strictly in a Partner capacity and not providing any procured goods or services to Microsoft.
Deep dive
Background
Microsoft’s requirement for supplier greenhouse gas (GHG) emissions reporting stems from its January 2020 climate pledge to become carbon negative by 2030, using a 2020 baseline for emissions (including Scope 3 supply chain impacts) followed by a commitment to offset all previous operational emissions by 2050. The policy was formalized in the 2022 update to the Microsoft Supplier Code of Conduct (MCoC), specifically section 6.11, and became effective with the 2024 disclosure cycle, obligating suppliers to start submitting baseline (2019 or approved alternative) and recent year emissions in mid‑2024. The MCoC builds upon Microsoft’s earlier sustainability efforts, such as its internal carbon fee program introduced in 2012. The policy aligns with global climate frameworks like the Paris Agreement and reflects growing regulatory trends, such as the U.S. Securities and Exchange Commission's push for standardized climate disclosures, which Microsoft publicly supported in 2021. Microsoft’s policy also aligns with both broader corporate responsibility trends and increasing public policy demands for supply chain GHG accountability.
Reporting Requirements
As stated in section 6.11 of the MCoC, when requested, suppliers are required to:
Disclose comprehensive and accurate scope 1, 2, and 3 GHG emissions data and/or or the necessary inputs to calculate such emissions. Microsoft may also mandate that this data undergo verification by an independent third party.
Develop and implement plans to reduce absolute GHG emissions from Microsoft-related goods and services by at least 55% by 2030. Alternatively, they may follow a different emissions reduction target specified in their contract or other official Microsoft communications, based on an agreed-upon baseline.
The 2025 cycle requires submission by June 30, 2025 via Microsoft’s dedicated Supplier Emissions Portal. Further specifics on data disclosure criteria, reporting methodologies, verification processes, and progress toward emission reduction targets will be outlined in the Supplier’s contractual agreement or through additional written correspondence from Microsoft.
Consequences of Noncompliance
Noncompliance with Microsoft's emissions disclosure requirements carries significant business risks. Suppliers failing to meet reporting deadlines or accuracy standards risk exclusion from Microsoft’s procurement opportunities, as noncompliance is flagged in the company’s internal Sustainability Scorecard. Microsoft explicitly ties adherence to the SCoC, including its emissions reporting requirements, to continued business relationships. Accordingly, violations may prompt corrective action plans or contract termination. The policy also incentivizes proactive engagement: Suppliers are encouraged to participate in Microsoft-led training and webinars to stay adequately informed.
Current Status
As of June 2025, Microsoft’s Supplier Code of Conduct (SCoC) emissions policy is fully operational, with over 58,000 global suppliers potentially required to disclose annual GHG emissions data. The 2025 disclosure cycle introduced stricter requirements, including service-level accounting (SLA) to separate emissions from spend, ensuring granular accuracy of emissions data. While large suppliers have achieved high compliance rates, smaller suppliers face challenges adapting to the rigorous standards, prompting Microsoft to expand training and phased timelines. The company has also migrated to its proprietary Microsoft Cloud for Sustainability (MCfS) platform, replacing external tools like CDP to streamline reporting and enhance transparency. Microsoft's progress toward its 2030 carbon-negative goal remains on track. There are no indications of the company backtracking on its climate targets and policies as has been the case with some US-based companies under the current political regime.
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