Cisco Announces New Greenhouse Gas Reduction Goals

In our fiscal year 2012, which ended in July, Cisco completed and met our latest greenhouse gas (GHG) reduction goal.  To recap our past goals:

• September 2006: Clinton Global Initiative (CGI) commitment to reduce GHG emissions from all Cisco business air travel worldwide by 10% absolute (FY06 baseline).
  This goal was met in 2009.

• June 2008: EPA Climate Leaders commitment to reduce all Scope 1, 2, and business-air-travel Scope 3 GHG emissions worldwide by 25% absolute by CY12 (CY07 baseline).
  Both the Scope 1 / 2, and Scope 3 parts of this goal were met in 2012.

We believe formal goals should address the most material environmental issues—which for Cisco are GHG and energy. Over the years, we accumulated several insights—some learned on our own and others suggested by stakeholders—that informed the creation of our new goals.  Below, I introduce our new goals and the thinking behind each one.

New Goals:

We thought the basic outline of our EPA Climate Leaders goal was sound, so we carried the form of that goal forward, but this time separated Scope 1 / 2 and Scope 3 emissions into separate goals:

1. Reduce total, Cisco, Scope 1 and 2, GHG emissions worldwide by 40% absolute by FY2017 (FY2007 baseline).
2. Reduce total, Cisco, business-air-travel, Scope 3 emissions worldwide by 40% absolute by FY2017 (FY2007 baseline).

Our 2008 EPA Climate Leaders goal was sometimes read as a reduction goal for the sum of all three types of emissions listed; we intended them to be separate and thought we’d make that intention clearer with separate goals. We decided to reference both these new goals to the original FY2007 baseline to provide better long-term perspective on our performance, climate change being a long-term problem.  We thought 5 years continued to be an appropriate time frame. Some stakeholders champion annual goals, but our experience is that efforts with more reduction potential need more runway.

Our next concern was to put more emphasis throughout Cisco on the underlying energy use behind the reported GHG emissions. Most of our emissions are from electricity—and can be reduced by purchasing low-carbon electricity—but we wanted more attention and resources applied to energy efficiency.

3. Reduce total, Cisco, operational energy use per unit of revenue worldwide by 15% by FY2017 (FY2007 baseline).

By the way, if you’re wondering what’s with all the words, we want to be clear that these goals are for all of Cisco without qualification.  We found a lot of companies set goals for their headquarters site or country, or only one business, or exclude subsidiaries.  That’s why we are a bit redundant with “total” and “worldwide.”

Next, we wanted to address stakeholder concerns that we site our facilities—particularly data centers—in regions that don’t rely on “dirty” electricity (i.e., coal).  We have 15 to 20 criteria for facility siting, each weighted less than 10% of the total siting score.  We don’t have decision gates, such as “no coal,” but think we can address the underlying concern by focusing on electricity emissions factor.

4. Reduce Cisco’s FY2017, net, consumption-weighted, electricity emission factor to half of the latest International Energy Agency (IEA) world average emission factor publicly available before the end of FY2017.  

If all companies (and individuals!) were able to cut their electricity emissions factor in half, all energy-related emissions would drop by 20%. (Electricity generation is about 40 percent of global, energy-related, GHG emissions per the U.S. Energy Information Agency—see Figure 3 of an EIA report.)

Last, we will continue to support renewable sources of electricity, both from onsite and offsite generation.

5. Use electricity generated from renewable sources for at least 25% of our electricity every year through FY2017.

It is hoped that eventually (perhaps through a smarter grid) any individual or organization could easily buy electricity from any power generator on their grid—whether from solar, wind, natural gas, geothermal, nuclear, or hydro—but for now, only renewables are readily available for separate purchase.

What About Our Supply Chain?

Many stakeholders are concerned about supply chain emissions—a type of Scope 3 emission.  If business functions are outsourced, so are the emissions.  To respond to this concern, Cisco has had an ongoing initiative, with accompanying targets, to encourage  various categories of suppliers to report their Scope 1 and 2 emissions to Carbon Disclosure Project (CDP).

To summarize our supplier CDP reporting performance to date:

• Contract manufacturers, Tier 1 partner: 100% of Cisco spend with contract manufacturers reports to CDP (goal = 100%)
• Approved Vendor List (AVL) components, Tier 2 partner: 80% of spend reports (goal = 80%)
• Global transportation, Tier 1 partner: 93% of spend reports (goal = 90%)

These data plus prior year performance are provided in Table 12 of the Environment chapter of our 2012 CSR report).  We plan to extend the reach of this initiative by adding more categories of suppliers to future CSR reports.

Let us know what you think.