Microsoft has begun to scrutinize its hardware suppliers' business, social and environmental code of conduct more closely, in a bid to improve sustainability along its own supply chain. The move was welcomed by an environment watchdog, but its effectiveness has also been questioned.
In a statement issued Thursday, Redmond said starting from 2013, hardware vendors must submit annual sustainability reports on their adherence to the requirements in the existing Microsoft Vendor Code of Conduct. The code sets standards for legal compliance, business ethics, labor and human rights standards, environmental protection, and respect for intellectual property.
This new reporting mechanism "complements and strengthens Microsoft's existing auditing and assurance programs", which include third-party monitoring of its contract hardware manufacturers, and also drive sustainability improvements in its supply chain, the technology giant said.
The aim is to enhance information shared about its vendors' commitment to social and environmental policies, programs and performance in the company's annual Citizenship Report, and help shareholders, customers and others understand how Microsoft and its suppliers are meeting their expectations for social responsibility, it added.
According to Microsoft, the initiative was in response to a shareholder proposal from New York City Comptroller John C. Liu, on behalf of New York City Pension Funds. "We appreciate and value the discussions we've had with Comptroller Liu's office and the opportunity to continue our collaborative work with shareholders on initiatives that further demonstrate our commitment to corporate citizenship," said Brad Smith, Microsoft's general counsel and executive vice president of legal and corporate affairs, in the statement.
Environment activists welcomed the move. Casey Harrell, an environmental analyst at Greenpeace International, told PC World that Microsoft's new effort was "generally headed in the right direction". However, she expressed skepticism as to how effective or "game-changing" the initiative will be.
"In general, more data is good--especially if this is cross-referenced with other audits. This reporting work becomes much more useful if Microsoft is to actually require its suppliers to adhere to more stringent standards than the law allows," she said, emphasizing the need for specific, as well as high, standards.