The following is based on an excerpt from the 2020 CSR Impact Report, published on December 8, 2020.
Making the world a better place with technology begins with how we make that technology. This commitment is core to our desire to power an Inclusive Future. Cisco addresses environmental and social impacts across our supply chain to ensure we uphold human rights, promote worker health and well–being, and minimize negative environmental impacts. A responsible, resilient supply chain is critical to our business success and supports our ability to transition from a linear economy to a circular economy.
GHG emissions from our supply chain are 5x greater than the footprint of our own operations, close to the average among global corporations. Engaging with suppliers is therefore a critical way for businesses to reduce their overall carbon footprint and address the increasing impacts of climate change.
As laid out below, we partner with our suppliers to drive forward progress on multiple aspects of environmental sustainability.
Tackling supplier GHG emissions
We have been working with suppliers to improve and report GHG emissions data through the CDP Supply Chain Program for over 10 years. We use this information to directly measure our supply chain carbon footprint and evaluate individual supplier performance. Reducing GHG emissions has clear business benefits to our suppliers and contributes to Cisco’s long-term operational success.
To drive progress, we have committed to a goal that 80 percent of Cisco component, manufacturing, and logistics suppliers by spend will have a public, absolute GHG emissions reduction target by FY25. To meet this goal, we are working with suppliers to set and work toward enterprise-wide emissions reductions, which will help scale impact across the IT industry. We are using a combination of targeted supplier engagement and collaboration with industry peers to advance emissions modeling and to gain more real-time insight and influence into suppliers’ targets, capabilities, and performance.
This engagement is critical to our ability to achieve our second goal, a science-based target to reduce Cisco supply chain-related Scope 3 GHG emissions by 30 percent absolute by FY30.There is a standard one-year lag between when emissions occur at our suppliers and when they are reported to Cisco through CDP. This year, we have reported our FY19 base year. Progress against this goal will be reported in our FY21 report.
Learn more about our supplier GHG emissions reporting in the ESG Reporting Hub.
Reducing material waste
Our focus on developing and promoting a circular economy has driven efforts to better understand how materials are consumed upstream in our supply chain. We are engaging our manufacturing partners on waste diversion reporting. This will build visibility into supplier waste sources and disposal methods and identify opportunities to reduce waste.
In FY20, Cisco continued our partnership with TRUE Zero Waste to support and verify completion of our manufacturing partners’ efforts to achieve a zero-waste diversion rate at specific sites and to maximize their efficiency in the use of resources. We are in the final stages of the TRUE certification process for Cisco operations at partner manufacturing sites in China and Thailand, and we have started similar initiatives at manufacturing partner sites in Mexico and Malaysia. We are on our way to reaching our goal of seeing 70 percent of Cisco component and manufacturing suppliers by spend achieve a zero-waste diversion rate at one or more sites by FY25.
Improving water security
During fiscal 2020, we dug further into how we could help to improve environmental vitality of water systems in the areas where our supply chain operates. We conducted a survey to identify the water consumption levels of different commodity types within our supply chain. Leveraging World Resources Institute’s Aqueduct tools and the data we collected from suppliers, we were able to identify high water consumption supplier sites operating in water-stressed areas. As a result, we have prioritized suppliers to engage in capability-building in partnership with the Alliance for Water Stewardship in fiscal 2021. Our goal is to reduce water-related risks to business and improve the health of water ecosystems long-term.
We also broadened the scope of environmental reporting and transparency to help us better understand the water footprint in our global supply chain. In addition to reporting GHG emissions, we asked suppliers to complete the CDP water survey during fiscal 2020.
Managing environmental risk in China
We have an ongoing partnership with the Institute of Public and Environmental Affairs (IPE) and conduct a series of activities to prevent and mitigate the environmental risk from our supplier sites in mainland China. We are recognized for our work on Green Supply Chain by IPE and were ranked #1 in the IT industry for the Corporate Information Transparency Index (CITI) in October 2020, up from #2 in July of 2020.
Some of the work we conduct leverages IPE’s Blue Map database, which identifies existing and historical environmental violations. In fiscal 2020, 50 supplier sites in mainland China remediated environmental violations and were delisted from the IPE Blue Map.
We also work with our manufacturing partners to cascade these expectations to their next-tier suppliers in a program called the Green Supply Chain initiative. By building the capability of suppliers, we can influence better environmental performance and transparency further down in the supply chain. In fiscal 2020, 100 percent of our manufacturing partners in mainland China set up programs to manage their suppliers’ environmental performance using IPE Blue Map. With direct one-on-one coaching from Cisco, partners developed the capacity to identify their suppliers’ environmental pollution violations and work with suppliers on remediation. IPE recognized one of our partners for their focused efforts to launch and scale the program without prior experience. They shared their positive experience of working with Cisco at the IPE Annual Forum so peers, NGOs, government, and other stakeholders could learn from it.
Environmental reporting and transparency are critical to understanding the environmental impact of our supply chain in China. To drive this work, we encourage high-environmental-impact suppliers to disclose energy conservation, water, air, and waste information through the Pollution Release and Transfer Report (PRTR) reporting system on the IPE website. In fiscal 2020, 102 supplier sites completed PRTR reporting, compared to 60 in fiscal 2019. We saw large increases in part by motivating our manufacturing partners to ask their high-environmental-impact suppliers to complete this reporting.
We are also taking steps to help suppliers address current environmental compliance challenges. In fiscal 2020, we organized virtual environmental training seminars with more than 219 attendees from 173 suppliers. The seminars included presentations on how to protect the environment in their daily operations. For manufacturing partners who have struggled with addressing their pollution violations, we hired third-party consultants to identify gaps and coach partners to implement corrective actions onsite for more than four months. After coaching, the facilities were able to successfully remediate their environmental issues.
To learn more about the progress we’re making to power a more inclusive future through CSR, visit our Cisco ESG Reporting Hub, where you can read our CSR Impact Report.