Engaging Microsoft on Human Rights

In this post, Stewardship Assistant Ffion Spencer discusses our recent engagement with Microsoft; held in the Thoughtful World Equity Fund, on its performance in the World Benchmarking Alliance’s Corporate Human Rights Benchmark. 

The Corporate Human Rights Benchmark

In recent months, we have been working in partnership with US-based organisation Interfaith Centre for Corporate Responsibility (ICCR) to engage companies on their performance in the World Benchmarking Alliance’s Corporate Human Rights Benchmark. 

The Corporate Human Rights Benchmark assesses the human rights commitments, due-diligence processes, and implementation efforts of companies operating in five high-risk sectors (food and agricultural products, apparel, extractives, ICT manufacturing and   automotive manufacturing). The benchmark provides investors with a structured way of assessing how effectively companies manage human rights risks and helps identify areas where disclosure or practice may fall short of emerging best practice.

Castlefield is the lead investor for engagement with Microsoft. We have two supporting investors: French firm Sycomore Asset Management and the Germany-based Working Group of Church Investors (AKI).

ICCR requested that we focus on the theme of ‘Embedding Human Rights into Company Culture’ for our first meeting, as this is an area in which companies consistently score poorly. This was Microsoft’s lowest scoring section and we focused on the areas where we believe Microsoft could make the greatest improvements ahead of the next benchmark cycle, as well as areas  where it should focus its efforts over the coming years.

We felt that engagement through the benchmark was important, particularly given the increased criticism in the press that  the company has faced in recent months.

While Microsoft has not historically been subject to the same level of scrutiny over human rights issues as some other large technology companies, we felt that engagement through the benchmark was important, particularly given the increased criticism in the press that  the company has faced in recent months.

Our Call with Microsoft

The call included several Microsoft representatives from both the Human Rights and Investor Relations teams. During the discussion, we were encouraged to hear that investor feedback is incorporated into a quarterly board paper, providing a route for our human rights concerns to reach the company’s highest decision-making body.

We highlighted that it is clear that Microsoft puts a huge amount of resource and effort into its human rights work, and that although the company’s disclosure on this topic is detailed, it is not quite meeting the requirements of the benchmark. We wanted the call to be constructive, and therefore focused on elements of the benchmark we believe Microsoft could make meaningful difference to its scores by altering the wording of or disclosing a little bit more information. 

The first element we discussed was Mapping and Disclosing the Supply Chain. This element asks companies to disclose how they assess which parts of their supply chain are most significant, identify those suppliers, and indicate whether they are direct or indirect suppliers. Many of Microsoft’s peers already meet this requirement, and we believe the company could improve its disclosure in this area.

Microsoft stated that its supply chain differs from those of many of its peers in the benchmark, as it is less reliant on physical products. In our follow-up email, we clarified that the benchmark requests disclosure of the most significant parts of a company’s supply chain, regardless of whether these relate to physical products or other types of suppliers.

Microsoft also noted that it had previously disclosed a list of its top 100 suppliers. We recommended that the company reinstate this disclosure and provide additional information on how these suppliers are identified as “top suppliers” (e.g. by spend, revenue generation, or other criteria), as requested by the benchmark.

Additionally, we asked whether Microsoft has conducted training for its procurement team on responsible purchasing practices and the impact that last-minute changes, tight deadlines, etc. can have on human rights within the supply chain. Microsoft noted that it delivered training on responsible purchasing practices in 2025, including how contract terms can affect suppliers. The company made this training available to procurement colleagues and reported that it was well received by participants. The company pointed to a brief paragraph in its report covering training, however, we feel that this existing text does not quite meet the requirements to pick up additional points on the benchmark. 

We encouraged the company to include a brief statement on this specific training (i.e. listing the poor purchasing practices training was provided for and how these practices contribute to human rights concerns) in its next report, as this would help improve its score in the benchmark with minimal edits to the existing text. 

While Microsoft did not commit to implementing our recommendations, the discussion helped clarify areas where relatively minor disclosure enhancements could improve alignment with the benchmark. In our follow-up email, we set out our recommendations again and provided examples of how Microsoft’s peers have met these elements. 

While Microsoft did not commit to implementing our recommendations, the discussion helped clarify areas where relatively minor disclosure enhancements could improve alignment with the benchmark.

At the end of the call, we took the opportunity to question Microsoft of the recent controversy surrounding the misuse of its products by the Israeli military for mass surveillance purposes .  The company representative talked through the company’s stance on the issue, stating that surveillance is prohibited under Microsoft’s terms of use. He went on the explain that Microsoft has revoked the military’s access to the cloud services, conducted an internal investigation and published the findings. The company was also able to point to examples of contracts that they had turned down due to concerns around legality. 

We ended the conversation by stressing that, against a backdrop of criticism from the press and other stakeholders for inadvertently facilitating human rights abuses, Microsoft should look to tools like the Corporate Human Rights Benchmark as an independent validation of the company’s commitment to tackling human rights abuses throughout its business. 

Outcome: Engagement with the company is ongoing and, as part of the benchmark engagement process, we will seek a further meeting with Microsoft in the second half of the year to discuss the benchmark's second theme and continue advocating for the recommendations outlined above.

Written by Ffion Spencer

This article was originally published as part of our Q2 2026 Investment Management Report (IMR).

Information is accurate as at 17.07.2026. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.