When you look through a sustainability lens at Cisco’s supply chain, you see three things clearly: a focus on climate and carbon impacts, a deep concern for the protection of human rights, and an imperative around product take-back opportunities. Cisco’s approach to a responsible supply chain is structured around this impact framework.
One of the key differentiators for Cisco lies in how we are tackling carbon reduction in a fully outsourced supply chain, and doing it in a way that is measurable and auditable. Being an outsourced global supply chain means we are faced with both challenges and opportunities to reduce the carbon footprint associated with our products. Simply put, we have to find ways to create a carbon emissions program that fits with our structure. To do that, we must partner externally to better understand the impact of our actions as well as those of our suppliers. Sustainability is about mutually beneficial outcomes, so it’s imperative that our internal teams, partners and suppliers understand from the very beginning that, in addition to cost, quality and delivery, reducing emissions is also a priority.
In addition to having a clear framework to communicate expectations and measure results, consistent leadership engagement has been essential to driving progress. There is simply no substitute to achieving deep alignment with partners that share your purpose. It’s essential to being able to act quickly and achieve truly transformational progress even in the face of complexity.
Cisco’s approach to Scope 3 supply chain emissions data management is what sets our efforts apart. Like many in the electronics industry, the availability and accuracy of outsourced emissions data remains our biggest challenge in creating a baseline from which to establish an emissions-reduction goal.
Through partnership, we see many innovative ways to address climate concerns, but we acknowledge it can be difficult to drive change when you don’t directly control the assets. At Cisco, our progress is driven by criteria, metrics and scorecards, which influences suppliers to lead their own emissions reductions, ensuring more holistic action across the responsibility spectrum. To accomplish that, we must have shared values.
Most are getting on board and see efficiency opportunities to share savings. In fact, this year, we recognized that all key manufacturing and logistics partners, as well as more than 60 percent of key commodity suppliers, had set emissions reduction goals. In 2016, our objective is to have 100 percent of key suppliers report their GHG emissions to CDP. Unlike cost data, emissions data is not cumulatively collected and reported about our products’ journeys through the value chain. Even the “best in class” supplier data currently being reported typically provides partial (supplier Scopes 1 and 2) revenue-based allocations of product emissions. Adding to this challenge is a wide gulf in supplier reporting capability and validation practices, as well as a continuously evolving list of suppliers. There is good reason why many companies opt out from establishing high-level supply chain emissions-reduction goals — it’s very difficult.
For Cisco, the outcome is worth the effort. With our roadmap approach, each initiative is assessed with the goal to leverage existing supply chain tools and build emissions reporting into the process. Involving process owners in development is imperative to employee engagement and is the framework for driving more informed and responsible decisions. When you combine all these efforts, the outcome demonstrates a truly innovative approach in Scope 3 supply chain emissions reductions. Ultimately, we are looking to align efforts and embed best practices to achieve dual benefits, such as increased resiliency and reduced costs for both Cisco and our suppliers. We also will integrate emission reduction activities with other business benefits, which serves as another proof point that sustainability is a leading supply chain capability. Cisco also is committed to building on the IGR Program roadmap and will soon be sharing a multi-year carbon reduction goal for our outsourced operations.
Our approach is working. The U.S. EPA has recognized Cisco for its innovative work in greenhouse gas reductions with the 2016 Supply Chain Leadership Award, which spotlights and incentivizes exemplary corporate, organizational, and individual leadership in response to climate change.
You can read more about our progress in our 2015 Corporate Social Responsibility Report.