A concise read with notable strengths – and weaknesses
Microsoft is taking a new, paired down approach to Citizenship reporting. Its 2014 report is a no-frills PDF that prioritises simplicity and web links over style or a robust narrative. It’s no surprise that Microsoft’s responsibility reporting, like its business, has shifted towards the web, yet readers may be surprised by how far Microsoft has stripped-back the PDF version.
The document has no case studies or photographs to provide context or colour for readers. Charts and infographics are used sparsely and are as plain as an Excel pie chart. The strength of this approach is that it covers a lot of ground quickly. Rather than congesting pages with graphics and storytelling, it utilises external links to supplement focused disclosures. The downside is that the PDF report is often uninspiring.
The document can be downloaded at the Citizenship Reporting page, where readers are also offered performance highlights and a link to the GRI G4 Index. Case studies, absent from the PDF, can be found within the Corporate Citizenship site.
Missing materiality and goals
An important element missing from the report is an assessment of materiality. Microsoft devotes significant space to its stakeholder engagement efforts, but does not connect this back to the prioritisation of corporate responsibility issues or reveal what the company learned from stakeholders. Since Microsoft treats all issues in the report with equal weight, the reader is left to guess what the company views as most important.
Also disappointing are Microsoft’s commitments, which are buried at the end of each section, are often vague, lack metrics and have only short term time horizons to FY15. Here’s a sample commitment, from the human rights section: “Continuing to review our policies and practices to ensure we are meeting our commitments to human rights and to perform ongoing assessments of the human rights impacts of our operations.”
Unfocused goals like these make it difficult to assess Microsoft’s performance over time. For a company with a vision to “reinvent productivity to empower every person and every organization on the planet”, vague one-year goals are inadequate.
Privacy, environment, and the supply chain
Microsoft’s focus on data privacy and security is particularly strong and timely given the news on US government surveillance in 2014. The section links to a report that shares information on data requests by legal authorities, how often Microsoft complied, and the type of data provided. Microsoft also flags up its commitment to email privacy and not exploiting user content in Outlook for online advertising. This seems to be an intentional contrast to Google’s policies.
Microsoft’s environmental programmes that support its annual carbon-neutral goal are also a highlight of the report. The company has placed a price on carbon within its organisation and charges departments a carbon fee internally. This has driven investment in innovations such as fuel cell servers that cut energy use in half. As Microsoft’s services move to the cloud, this kind of innovation is material – data centers worldwide currently use the equivalent of the output from 30 nuclear power plants. Microsoft also signed a power purchase agreement for a 110-megawatt wind farm.
Microsoft’s discussion of its supply chain is robust and includes a list of its top 100 suppliers, health and safety metrics for its Tier 1 factories, and a conflict minerals disclosure including smelter-level and country-of-origin data.
Few people will be impressed by Microsoft’s disclosure on diversity. The report mentions clear and measurable goals for women and minorities but does not tell us what these are. This is particularly disappointing when we read that “women and US minorities” make up only 27% of “senior executive positions”. Further, by lumping women and minorities together in one percentage, Microsoft gives the impression it fears transparency. When you place this in context of the poorly received comments made by Microsoft’s CEO at a recent women’s conference, it seems Microsoft is failing on diversity.
In summary, Microsoft’s report is uneven. It’s concise and clear with some genuine strengths. But the weaknesses are too significant to rate the overall effort highly. Materiality assessment, stronger time-bound and measurable goals, and a focus on diversity efforts should be priorities for improvement.
- Follows GRI? Yes, GRI G4 referenced with index online
- Assured? No
- Materiality analysis? No
- Goals? Yes, however few are measurable or time-bound
- Targets? Yes, however few are measurable or time-bound
- Stakeholder input? Yes. Stakeholder groups, engagement, and results listed
- Seeks feedback? Yes, readers can send comments to firstname.lastname@example.org
- Key strengths? Concise and strong disclosures on privacy, environment, and supply chain
- Chief weakness? No materiality and vague goals
- Pleasant surprise? Increasing focus on supply chain transparency and disclosure
Michael Cook is a consultant at Context America
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