Scope 3 category Emissions calculation methodology Supplier dat a percen tage * Employee commuting This category captures emissions from commuting by all employees and con tractors that work in Microsoft buildings. Microsoft conducted a survey in May 2019 to capture detailed commuting habits from employees and vendors at our Puget Sound campus, representing ~36% of global Microsoft headcount. The survey is typically conducted an n ually but was not performed in 2021. The results were scaled to estimate global commuting emissions for Microsoft. CO2 emission rates for passenger vehicles (single occupancy vehicle [SOV] and carpool) are based on fuel consumption and miles travelled. A weighted average fuel economy using the 2012 EPA Fuel Economy Trends Report 1975–2012 was derived, which provides combined fuel economy for cars and trucks by year, and a set of car and truck age fractions provided by the Puget Sound Regional Council. This data was used to develop a weighted average fuel economy for the Puget Sound area. Emission factors are derived from the Inventory of US. Greenhouse Gas Emissions and Sinks: 1990–2010, Annex 2 (Methodology for estimating CO2 emissions from fossil fuel combustion). CO2 rates per passenger mile are based on Federal Transit Administration, 2010 (Public Transportation’s Role in Responding to Climate Change, US DOT, Federal Transit Administration, January 2010). GWPs are from the IPCC Fourth Assessment Report (AR4), 100-year average. As nearly all Microsoft employees worked from home during the COVID-19 pandemic, FY20 was the first year to include emission impacts from telework. Telework energy consumption is assumed to include workstation/plug-load energy usage, additional lighting and household cooling/heating consumption. 1 laptop, 2 monitors and 3 lightbulbs are assumed for each employee; other assumptions include 8 work hou rs/day and 250 days/year using the devices. Office/workspace floor area and cooling/heating intensity are assumed based on EIA’s 2015 Residential Energy Consumption Survey (RECS) data. From these assumptions, a carbon emission intensity per employee is calculated, and total emissions are calculated by multiplying the intensity by number of employees during the period of remote work. 10 Upstream leased assets Appendix D (continued) Scope 3 category Emissions calculation methodology Not relevant. Microsoft includes leased assets in our Scope 1 and Scope 2 emissions reporting boundary. Downstream transp ortation and distribution Included in this category are the emissions from transporting and ware housing of devices Microsoft sold (including, but not limited to, Xbox devices, Microsoft Surface devices, HoloLens, keyboards, mice, and other peripherals) from Microsoft manufacturing sites to retailers and customers. Calculations are based on standard assumptions of distance between retailers and their distribution centers and warehouse floorspace from an MWPVL International analysis of Walmart’s distribution center network. Assumptions about the energy intensity of warehouses come from the US Energy Information Administration (EIA)’s Commercial Buildings Energy Consumption Survey (2012). Emission factors for shipping come from the GaBi database. GWPs are from the IPCC Fourth Assessment Report (AR4), 100-year average. 0 Processing of sold produ cts Not relevant. Microsoft did not have any physical intermediate products in the y ears reported. Use of sold products Included in this category is the lifetime electricity use of devices Microsoft sold i ncluding, but not limited to, Xbox devices, Surface devices, HoloLens, keyboards, mice, and other peripherals. Lifetime electricity use per device is calculated based on standard product-use assumptions as included in our ISO 14040– and ISO 14044–compliant lifecycle analyses. This year updates to energy use assumptions that reflect latest understanding of device use via telemetry data are also included. Assumptions on total lifetime expected use (years) are used. Sales geography for the products sold is used to determine the electricity emission factor used to calculate emissions. GWPs are from the IPCC Fourth Assessment Report (AR4), 100-year average. 0 End of life treatment of sold pr oducts Included in this category is the end-of-life treatment of devices Microsoft sold d uring the reporting year including, but not limited to, Xbox devices, Surface devices, HoloLens, keyboards, mice, and other peripherals. End-of-life emissions for each product are based on modeling within our ISO 14040– and ISO 14044–compliant lifecycle analyses. To generate an estimate for this category, the model assumes that all devices are sent to landfills at the end of their useful life. GWPs are from the IPCC Fourth Assessment Report (AR4), 100-year average. 0 * Represents the percentage of emissions calculated (by category) using data obtained from suppliers or value chain partners. Supplier data percentage * 108