On June 1, Microsoft submitted its second annual Conflict Minerals Report to the U.S. Securities and Exchange Commission (SEC) pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law requires companies to trace and audit their supply chains in order to ensure that raw materials, known as conflict minerals, used in products are not financing human rights violations occurring in eastern Congo.
Microsoft is committed to the responsible sourcing of raw materials used in our hardware products in support of human rights, labor, health and safety, environment and ethics, as outlined in our Responsible Sourcing of Raw Materials policy. This is a global commitment and responsibility that applies to all substances used in our products, unbounded by materials or location. This commitment to responsible sourcing and human rights also guides our efforts to responsibly address conflict minerals in our hardware products supply chain.
Our report documents our due diligence and outreach efforts in 2014 to responsibly address these conflict minerals (tin, tungsten, tantalum and gold) in our upstream hardware supply chain. It encompasses both legacy Microsoft devices such as Surface and Xbox as well as Nokia’s Devices and Service Group, which we acquired April 25, 2014, resulting in a significant expansion of our manufacturing and supply chain.
We are pleased to announce meaningful progress in this year’s report. The number of conflict-free smelters in our supply chain increased from 80 to 148 due to our work with our suppliers, the Nokia acquisition and the maturation of the Conflict-Free Smelter Program (CFSP), which we actively support. We recently learned, after our report was finalized, that that all tantalum smelters identified in Microsoft’s supply chain have been validated as conflict free – a significant milestone. We also strengthened our supplier audit process to improve due diligence, developed new controls to standardize supplier reports, and initiated third party assistance to help smelters prepare for CFSP validation.
In addition to our supply chain due diligence efforts, we support several industry organizations working toward similar goals, including the Global e-Sustainability Initiative (GeSI) and Electronics Industry Citizenship Coalition (EICC), two organizations that initiated the Conflict-Free Sourcing Initiative (“CFSI”). Microsoft also provided financial support to the Industrial Technology Research Institute’s (“ITRI”) Tin Supply Chain Initiative (“iTSCi”) to help establish a system of traceability and due diligence in Covered Countries, which include the Democratic Republic of Congo (DRC) and each of the nine countries that adjoin the DRC. We have also funded an early adopters program and provided initial audit funds to enable more smelters to become validated as “conflict free” through CFSP.
We also support the efforts of other organizations that promote responsible mining and raw material sourcing, including the Public Private Alliance for Responsible Minerals Trade (“PPA”), the Initiative for Responsible Mining Assurance (“IRMA”), the Alliance for Responsible Mining (“ARM”) and the “Pact” organization. We partner with organizations in several industry sectors that are working to foster end-to-end mining sustainability, from artisanal miners to larger mining enterprises. Microsoft also sponsors the Multi-Stakeholder Group, hosted by the Responsible Sourcing Network, which coordinates efforts to promote security and stability in the region by engaging governments to bring an end to the conflict in the DRC.
There is still more work to do on this issue. We will continue to work with external organizations, trade associations, and industry partners to refine and enhance our due diligence tools and supplier outreach. For more information about our progress and our future plans, please download the full report on our Corporate Citizenship website.