MICROSOFT CORPORATION | Report on AI and Machine Learning Tools for Oil and Gas Development and Production at Microsoft Corporation

Status
Filed
AGM date
Proposal number
10
Resolution details
Company ticker
MSFT
Lead filer
As You Sow
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Environment
ESG sub-theme
  • Climate change
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Shareholders request that Microsoft report on the climate and financial risks to the Company associated with providing advanced technology, including artificial intelligence and machine learning tools, to facilitate oil and gas development and production.
Whereas clause
Microsoft is widely recognized for its efforts to address its contribution to climate change. It has set targets to reduce its near-term emissions, use 100 percent carbon-free energy, and aims to be net carbon-negative by 2030.1
Despite these actions and commitments, Microsoft is also the global leader in developing advanced technology platforms that facilitate new oil and gas production projects, including artificial intelligence (“AI”), machine learning, Internet of Things, cloud computing, and high-performance computing (collectively, “advanced technology”).2 A 2022 study found that Microsoft controls nearly 60 percent of all cloud services contracts with the oil and gas industry,3 and independent analyses show that just two of these contracts had a greater emissions impact than Microsoft’s entire Scope 1 – 3 emissions.4
However, these contracts and their associated emissions are not addressed by Microsoft’s existing disclosures or targets, leaving investors in the dark about their financial and climate impacts and the potential risks posed to the Company and its investors.
Microsoft’s continued sale of advanced technology to the fossil fuel industry exposes it to material reputational and legal risks. The development and deployment of advanced technology for the fossil fuel industry has caused outcry,5 and even led to staff resignations.6 Microsoft consistently heralds its efforts to “accelerate sustainability with AI,”7 without providing material information about its fossil fuel partnerships in its sustainability reporting, raising legal and reputational risks associated with greenwashing.8 Similarly, without ensuring that the oil & gas companies it serves are aligned with global climate goals, Microsoft increases its exposure and that of its investors to financial, legal, and reputational risks associated with the energy transition.
By assessing and reporting on the risks associated with selling advanced technology for fossil fuel production, Microsoft can increase transparency and provide investors with the information necessary to evaluate the Company’s climate impact and exposure to climate-related financial risk.

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.