How Microsoft communicates about its take on ESG

Jan 22, 2019
Microsoft won the best ESG reporting prize at the recent Corporate Governance Awards

This article originally appeared in the latest Corporate Secretary special report. Click here to view the full publication.

As has been well documented, companies today face growing pressure to let shareholders know about the risks – and the opportunities – they face from a range of ESG issues. Companies need to show both that they are aware of these issues and, in many cases, that they have a plan to respond to them. Demonstrating this takes place during face-to-face engagement, and with increasingly sophisticated reporting.

The judges noted that investors are looking for substance in ESG reporting, not just empty marketing. Microsoft, the winner in this category, helped show it means business in tackling a high-profile concern for many clients and shareholders by launching its privacy dashboard. The online tool allows users to view and manage the data Microsoft collects about them. The company also provides information to customers on its privacy commitments and practices.

Microsoft uses a wide variety of platforms to communicate with investors and other parties about its thinking and actions on ESG issues. The company is ‘interested in driving public debate,’ ESG engagement director Steve Lippman says. As part of this, company leaders regularly make policy blog posts on topics ranging from citizenship and cyber-security to online safety, jobs, education and human rights.

For example, one Microsoft blog post states that between May – when the EU’s General Data Protection Regulation (GDPR) went into effect – and September, more than 5 million people from 200 countries used the company’s new privacy tools to manage their data. The majority of these people were from the US, which is not governed by the GDPR, but Lippman says the company is keen to extend the regulation’s provisions to clients around the world.

Microsoft also produced a book in early 2018 on the future of artificial intelligence (AI). AI is key to the company’s future and both raises important ethical issues and creates room for regulation, Lippman explains, adding that Microsoft wants to help policy makers understand these issues and the technology behind them. The book spells out six principles related to AI: fairness, reliability & safety, privacy & security, inclusiveness, transparency and accountability.

Among other reporting initiatives, Microsoft provides a single, integrated CEO letter that appears in both the annual report and the annual CSR report linking the company’s business strategy, results, social purpose and corporate responsibility commitments.

An online ‘reports hub’ offers a single location where investors and others can access the broad range of Microsoft’s ESG disclosures, which include the company’s carbon footprint and other detailed data on environmental matters, workforce demographics, political contributions and Microsoft’s response to law enforcement requests for customer data.

The workforce diversity data, for example, can be sliced and diced in a number of ways, Lippman notes. ‘We want stakeholders to be able to look at the data and see where Microsoft is,’ he adds.

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