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Microsoft lobbies for mandatory sustainability disclosure regulation ('do as we say' or 'do as we do'?)

By | August 6, 2010, 7:31am PDT

Microsoft is lending visionary and heart warming leadership by getting behind a lobby to cheer the UK government’s plan to introduce tough new social and environmental corporate disclosure requirements. The new government took many by surprise in reintroducing plans to encourage greater corporate accountability already abandoned once by the previous government as part of its newly issued programme for government manifesto.

We will reinstate an Operating and Financial Review to ensure that directors’ social and environmental duties have to be covered in company reporting, and investigate further ways of improving corporate accountability and transparency.

Microsoft recently co-signed an open letter with the influential Aldersgate Group to the government which calls into question the principle of voluntarism and demands that the government take a gloves off approach:

Voluntary initiatives have had some success in mobilising the UK’s biggest organisations to address their environmental impact more fully. However, last year’s Carbon Disclosure Project shows that only just over half of the FTSE 350 disclosed their carbon emissions. The urgency of climate change demands much more rapid progress to be made. For this reason, we welcome the government’s commitment to reinstate an Operating and Financial Review to ensure that directors’ social and environmental duties have to be covered in company reporting, and investigate further ways of improving corporate accountability and transparency.

As it happens I think there is a fair case to be made here about the benefits of leveling the playing field and encouraging more information on sustainability impact and performance into the public domain for the benefit of society and business. As argued by Aldersgate:

The administrative costs would be minimal for those who report anyway and help those who don’t to identify significant cost savings.

Microsoft’s recent evangelism on this will come as something of a pleasant surprise to Michael Muyot who wrote a blog post on Triple Pundit earlier this year critical of the company’s own poor record in voluntary sustainability reporting entitled: ‘Is Microsoft Going to Walk the Talk’.

As for Microsoft’s reporting, the website is filled with scenic pictures and videos of specific initiatives such as biodiesel recycling at company headquarters, but does not provide useable data on the company.

Muyot’s firm, CRD Analytics provides the analytical framework for establishment of the NASDAQ Global Sustainability Index which recently eliminated not only Microsoft but also Oracle and Cisco for not walking the talk on matters green. Muyot takes the view that in order to sell transparency you must do transparency:

We are hopeful that these rather obvious conflicting forces are really an indication that tech savvy firms like Microsoft, Cisco and Oracle are instituting enterprise wide solutions to gather, measure and analyze every possible piece of environmental performance data themselves and will actually be incorporating best practices into the very DNA of their company so they show their clients how easy it is to Walk the Talk. If they do this, it will lead to a very sustainable and profitable business segment.

Hey, I’m hopeful too and many more besides will assume Microsoft’s backing of tough regulation in the UK signifies a renewed corporate commitment to improving their own transparency and accountability on sustainability.

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James has more than 15 years of experience working on corporate sustainability issues from both the corporate and NGO campaigning perspective.

Disclosure

James Farrar

The most important and material disclosure is of my employment with SAP. During the course of my job I come into regular contact with SAP stakeholders of all kinds including NGOs, customers, government representatives, customers, partners. I will draw from my daily experience in my writing but I will try to make sure I fully disclose any material relationship I might have as an employee of SAP with the subject matter of my writing to the best of my ability. My goal is to raise awareness of sustainable development issues across the tech sector in an objective and fair way. Any opinions expressed in this blog are entirely my own and not those of my employer or anyone else for that matter. I have no significant financial investments in any other tech companies. You may find my personal blog at www.jamesfarrar.wordpress.com

Biography

James Farrar

James has more than 15 years of experience working on corporate sustainability issues from both the corporate and NGO campaigning perspective. He has worked directly within the banking (Farm Credit System), aviation (British Airways) and IT (SAP) sectors in the USA and Europe. His campaigning experience includes work at Amnesty International's business engagement programme and at Global Witness, a leading NGO campaigning on the issue of resource revenue transparency especially relating to so called 'conflict resources'.

James's day job is at SAP working within the Sustainability team. You can view James' extended profile on Linkedin and you can follow him on Twitter.

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RE: Microsoft lobbies for mandatory sustainability disclosure regulation ('do as we say' or 'do as we do'?)
jamesfarrar.1@... 6th Aug 2010
Bill -- you make a good point, we need to be more grown up about these things and we need to be moving forward.
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Sideshow
Economister 6th Aug 2010
If MS were really serious, they would lean down their OS to reduce energy consumption of their OS installed on hundreds of millions of computers. For example, when my son runs Vista on his notebook, the HDD seems to be busy a lot of the time, even when the computer is not being used. When he runs Ubuntu, the HDD light stays off most of the time. My gut feeling is that Windows does a LOT of background activity in order to achieve acceptable performance, which is not good from an energy conservation perspective.

Windows has at times been described as a "hairball". Maybe this is where MS needs to focus, rather than promoting its bio-diesel sideshow.
@Economister Interesting point. Do you have any stats?
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Well.....
Economister 6th Aug 2010
@jamesfarrar.1@...

My point goes beyond MS to include all the HW suppliers, but given certain HW, the OS and its efficiency/power management plays a major part. I cannot lay my hands on specific numbers at the present time, but a simple calculation may suffice to illustrate:

Say the average PC consumes 150W and a 10% saving is readily achievable, ie 15W. There are about one billion PCs world wide, which would give a saving of 15 billion watts or 15GW. This equals 10-15 fairly large coal fired or nuclear generating stations.

By extension, it takes 100 to 150 large generating stations to keep the world's PCs operating. Certainly the HW and SW community can achieve a substantial reduction in that number if they really tried. Of course, the consumer needs to be supporting such and initiative.

MS's bio-diesel initiative really pales in comparison.
James,

Thanks for this contextualization of MSFT's words v. actions. What's most interesting is the UK government's decision to exhume the OFR, which met an untimely death at the hands of then Treasurer Gordon Browne on charges of "goldplating" -- or adopting EU-based regulations that weren't relevant in the UK -- which was preposterous, given that the OFR was completely home-grown!

Here's a link to my 2005 article on this: http://www.socialfunds.com/news/article.cgi/1882.html

I've also written in the past that greenwash is the first step toward sustainability (ok, I copped the idea from Hunter Lovins), so from this perspective, it makes sense to welcome MSFT's advocacy for mandatory sustainability reporting, even if their own work falls short.

Bill Baue
Principal | The Transition Group
Editor | The Murninghan Post
Bill

Yes indeed the return of the OFR is almost worthy of its very own post. I wonder if it will see light of day this time round?

I agree wholeheartedly - we should welcome Microsoft's policy play here for it is in the interest of the commons.

I'm not sure I agree though that greenwash is ever a good option but I suppose I could see it as an OK first step as you say. In this post however, though I haven't said MS are greenwashing they certainly don't fit your chronological bill. Time was when Microsoft used to provide a very full and detailed sustainability report - now they no longer do.

Thanks for reading Bill.
James,

Here's a link to my "Greenwash is Good" piece, which was intended to be provocative.

http://www.csrwire.com/csrlive/commentary_detail/1207-Greenwash-is-Good-

Of course I don't think that greenwash is good when it's a company that has every capacity to do otherwise. My point was that it's understandable when companies early in sustainability curve don't know what they're doing. According to your account (I must admit I haven't read MSFT's sustainability reports), Microsoft can't claim to be in this category...

Bill
Bill -- you make a good point, we need to be more grown up about these things and we need to be moving forward.

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