Microsoft supply chain emissions reporting

The Microsoft’s Supplier Code of Conduct includes specific requirements for emissions management. Suppliers are required to disclose comprehensive scope 1 and scope 2 emissions along with specific categories within scope 3 along with formal carbon reduction plans that outline how a supplier intends to reduce emissions over time. The aim of these requirements is to ensure that every partner contributes to the collective reduction targets with transparency and accountability. Third party assurance of emissions data is also required to verify the accuracy of supplier data. Compliance is non-negotiable, as this data forms the evidence base for Microsoft’s public sustainability commitments.

Suppliers are required to submit their environmental data through the official Microsoft Supplier Emissions Portal. Submission requirements are updated periodically to ensure the company remains on track to achieve its 55% emissions reduction target by 2030. Microsoft communicates detailed disclosure obligations and portal access information directly to its suppliers. The deadline for submission is normally end of July.

As of 2025, the disclosure requirements include:

• Total company Scope 1 and Scope 2 emissions
• Scope 3 emissions in, at minimum, the following categories:

1. Purchased goods and services
2. Capital goods
3. Fuel-and-energy related activities (not included in scope 1 or 2)
4. Upstream transportation and distribution
5. Waste generated in operations
6. Business travel
7. Employee commuting
8. Upstream leased assets

• Service-level accounting (SLA) emissions, reflecting the proportion of overall company emissions associated with the supplier service provided.

If emissions in a particular category are zero or considered immaterial they must be reported as such in the portal. Microsoft also requires annual revenue figures to assist in the verification of intensity metrics and requires that all reported data is supported by third party verification.

Service level accounting (SLA) emissions represent a more granular approach to carbon reporting and require analysis of emissions associated with specific services provided to Microsoft. Suppliers must identify a relevant reference unit such as hours worked or full-time equivalents and allocate the portion of their scope 1, 2, and 3 emissions that is attributable to Microsoft specific contracts. This approach allows Microsoft to analyse the carbon impact of its procurement decisions and helps suppliers identify areas where operational changes might lead to reductions.

To assure data integrity Microsoft provides two pathways for verification of supplier emissions data. The first route is via an assurance letter provided by an independent third-party practitioner confirming that the emissions data for the required scopes and categories has been reviewed in accordance with the Greenhouse Gas Protocol or equivalent standards. The letter states the numerical values for each category and confirms any that are zero or immaterial.

The second route is the consultant letter. An external consultancy engaged by a supplier to calculate their carbon footprint can prepare for submission a letter following a specified Microsoft template that includes a description of the work performed along with the numerical calculations. While software tools can be used to assist carbon footprint calculation process, Microsoft does not accept automated reports from software as a substitute for professional oversight. Both routes require the final document to be on the provider letterhead and written in English to meet the standards for audit and transparency.

Menzies has experience guiding and supporting Microsoft suppliers through the annual emissions reporting cycle. We can provide independent third-party assurance for previously calculated emissions to the required standards and in the assurance letter format required by Microsoft. We can also calculate overall and SLA-level emissions on behalf of clients and prepare carbon emissions reports for current and historical reporting periods along with fully compliant consultant statements.