What does Microsoft's supplier requirement for carbon-free electricity mean for an Indian IT or hardware supplier?
Microsoft's Supplier Code of Conduct asks suppliers to move the goods and services they deliver to Microsoft onto 100% carbon-free electricity by 2030. For an Indian supplier, that means near zero market-based Scope 2 for the Microsoft share of your work, backed by solar, open access or green tariff evidence that Microsoft's guidance accepts.
Who it applies to
Microsoft's supplier code page lists the sustainability requirements: transition to and maintain 100% carbon-free electricity for Microsoft-delivered goods and services by 2030, plan to cut absolute greenhouse gas emissions from those goods and services by at least 55% by 2030, and use sustainable aviation fuel for Microsoft business flights where possible.
Microsoft says each supplier's reporting, targets and timelines are set in its contract or in written communication from Microsoft. So read your contract and any Microsoft request first; if neither mentions it, ask your Microsoft contact whether it applies to you yet.
What carbon-free electricity means in your accounts
- It is a market-based Scope 2 claim under the GHG Protocol Scope 2 Guidance, so each kWh needs a contract or certificate behind it.
- Options in India: rooftop solar you consume, green energy open access, a discom green tariff, or renewable energy certificates.
- Microsoft publishes a Supplier CFE Guidance document that sets which purchases count. Read it, and confirm with your Microsoft contact, before you buy any instrument; do not assume unbundled certificates will be accepted.
Working out the Microsoft share
- IT services: take office and data-centre kWh and allocate by billable hours or headcount on Microsoft work.
- Hardware: take kWh per unit for the product line and multiply by units shipped to Microsoft.
- Write the allocation key down and keep it the same each year, so the claim can be checked.
Location-based still gets reported
Even with full coverage, report location-based Scope 2 alongside the market-based figure, as the Scope 2 Guidance requires both. The location-based figure shows the grid you actually draw from; the market-based figure shows the contracts you bought.
Worked example: a Pune IT services office
- Office electricity: 3,00,000 kWh a year; 25% of billable hours on Microsoft work
- Microsoft share: 3,00,000 x 0.25 = 75,000 kWh
- Location-based: 75,000 x 0.710 = 53,250 kg CO2, about 53.3 t
- Instruments needed for 100% coverage: 75,000 kWh, for example rooftop solar or a green open access contract on that share, of a type the Supplier CFE Guidance accepts
Office load and share are illustrative. Check the instrument type against Microsoft's Supplier CFE Guidance before buying.
What Senseible does here
Senseible reports location-based Scope 2 from office and data-centre bills, and market-based Scope 2 where you add REC, green tariff or PPA evidence. The share allocated to Microsoft work follows your own allocation key.
- Scope 3 categories for IT services
- Does a green tariff make Scope 2 zero?
- How the India REC mechanism works
- Market vs location-based Scope 2
Sources: GHG Protocol Scope 2 Guidance (2015), market-based method and quality criteria
Last reviewed 2026-10-18. Checked 18 October 2026 against Microsoft's Supplier Code of Conduct page (microsoft.com/en-us/procurement/supplier-conduct): 100% carbon-free electricity for Microsoft-delivered goods and services and at least 55% absolute reduction by 2030, terms set per supplier contract. Recheck that page and the Supplier CFE Guidance for changes.