Cisco Achieves 2020 Supply Chain GHG Goal; Announces New Goals

This post was written by guest blogger Katie Schindall, Senior Manager, Circular Economy Program, Cisco.

“With great power comes great responsibility.”

The “power” referred to in this oft-cited quote is of course not the power we generate from energy, but it’s quite relevant to how we think about and manage the energy we consume as we live our lives and run our businesses.

Cisco’s owned and extended operations, including the use of our equipment, provide an important service in helping to power the internet, but also require significant energy. We have a responsibility to do everything we can to reduce the emissions that result from those activities.

According to the 2018 IPCC report, greenhouse gas (GHG) emission levels continue to rise, even with global commitments made under the Paris Climate Agreement. It is everyone’s responsibility to step up and take meaningful action to address the climate crisis. It is also our collective opportunity. Reducing energy consumption and increasing renewable energy has been repeatedly shown to drive substantial economic benefits. In other words, it’s just good for business.

At Cisco, we are making good progress toward our Scope 1 and 2 emissions from our own operations, as well as our Scope 3 emissions related to product use (our most significant impact).

But we need to look beyond. The greenhouse gas emissions from our supply chain are five times larger than the footprint of our own operations. We have an important opportunity to collaborate with our global network of component, manufacturing, and logistics suppliers, as well as our industry peers, to drive the large-scale change needed to transition to a low-carbon economy.

In 2016, we set a goal to avoid one million metric tons of supply chain GHG emissions by 2020 (FY12 base year). This was our first quantitative goal to encompass the GHG emissions related to supply chain activities that Cisco directs or influences. I am pleased to announce that Cisco achieved its 2020 supply chain emissions goal one year ahead of schedule.

This is a moment to celebrate and to thank everyone involved in this highly collaborative effort, which relied on smart supply chain decisions across the organization, from utilizing more ocean shipments to redesigning product packaging to energy efficiency partnerships at manufacturing sites. But there is still more work to be done.

That is why Cisco is announcing two new goals to drive absolute GHG emissions reductions in our supply chain. We are committing:

To reduce Cisco’s supply chain-related Scope 3 GHG emissions by 30% absolute by FY30 (base year FY19)1

That 80% of Cisco’s component, manufacturing, and logistics suppliers by spend will have a public, absolute GHG emissions reduction target by FY252

“The business case for pursuing ambitious greenhouse gas reduction targets is clear. The work our team did to achieve our 2020 target drove cost savings for the business, as well as increased operational efficiency and resiliency across our value chain. I am confident that the path to our new goal will bring additional benefits and further strengthen our supply chain.”  – John Kern, SVP of Supply Chain Operations at Cisco

These goals are built from our last ten years of working with suppliers to improve and report environmental data through CDP’s supply chain program, as well as collaboration with industry peers to advance our  supplier emissions modeling and to gain more real-time insight into suppliers’ targets, capabilities, and performance. With this information, we have the data needed to set an absolute reduction target in alignment with an approved science-based reduction scenario. It also enables us to better target and prioritize our efforts to drive engagement and reductions in our supply chain. With that lens, we plan to focus on:

Targeted supplier engagement and increased performance expectations for our top component, manufacturing, and logistics suppliers,

Expanded efforts to reduce our use of air transportation, and

Industry collaboration to collectively increase the availability of renewable energy and to reduce energy consumption across the electronics value chain.

“Leadership on climate change is no longer just about tackling your company’s direct emissions alone. Over a decade of working with supply chains, we at CDP have seen that companies can best drive transformation when they wield their procurement spend to incentivise environmental excellence among their suppliers. Cisco is an exemplar of this approach: having set its own science-based target, the company is now committing to driving supply chain emissions down by 30%. Procurement is a powerful lever for change – utilising it to cascade ambitious action through the economy is absolutely key to the low-carbon transition. To meet the potentially devastating environmental risks the world faces, we need every business to engage and take action, not just a handful of leaders.”
– Sonya Bhonsle, CDP Global Supply Chain Director

Solving problems, connecting people, and doing what’s good for the world is part of Cisco’s culture. It is important that we set a sustainable course for our business, which includes setting ambitious goals to reduce the carbon footprint of our own operations and beyond.

We cannot solve the climate crisis on our own, but we do have an important role to play. Between today’s innovation and a sustainable future, there’s a bridge.

For more information on Cisco’s environmental sustainability, please read our CSR Report.

1 Includes allocated emissions from Cisco’s Tier 1 and Tier 2 manufacturing, component, and warehouse suppliers, and calculated emissions associated with transportation emissions managed and paid for by Cisco. Emissions are allocated based on Cisco’s financial share of the supplier’s reported global Scope 1and Scope 2 GHGemissions.  Transportation emissions will be reported as Upstream Transportation and Distribution according to GHG Protocol methodology because they are paid directly by Cisco.

2 Preferably in line with an approved science-based methodology (applying either a 1.5 or well below 2°C reduction scenario). Includes suppliers that set intensity targets that produce an absolute emissions reduction during the target period.