2020_Environment_Technical

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Cisco

2020

Environment

Technical Review

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Table of contents

Table of contents ....................................................................................................................................... 2

List of tables .............................................................................................................................................. 5

List of figures ............................................................................................................................................. 7

Introduction ................................................................................................................................................ 8

Environmental sustainability reporting frameworks ................................................................................... 8

GRI ......................................................................................................................................................... 8

SDG ....................................................................................................................................................... 9

SASB...................................................................................................................................................... 9

TCFD...................................................................................................................................................... 9

General ...................................................................................................................................................... 9

CSR materiality - environment ............................................................................................................. 10

Stakeholder inquiries ........................................................................................................................ 11

Life-cycle assessment ...................................................................................................................... 11

ESG rankings and ratings ................................................................................................................ 13

Clean revenue .............................................................................................................................. 14

Environmental policy ............................................................................................................................ 15

Environment goals ............................................................................................................................ 16

Environment governance ................................................................................................................. 17

Energy/GHG emissions ................................................................................................................ 17

Circular economy .......................................................................................................................... 18

Risk management ............................................................................................................................ 18

Design for environment .................................................................................................................... 18

Environmental management system ................................................................................................... 19

Scope and implementation ............................................................................................................... 20

Environmental compliance ............................................................................................................... 22

Environment employee engagement ................................................................................................... 22

Education and awareness ................................................................................................................ 22

Activities and volunteering ............................................................................................................... 23

Supplier environmental performance ...................................................................................................... 24

Supplier GHG emissions...................................................................................................................... 25

Supplier material waste........................................................................................................................ 25

Supplier water security......................................................................................................................... 26

Environmental risk management in China ........................................................................................... 26

Audits and self assessments ............................................................................................................... 27

Energy and GHG emissions .................................................................................................................... 28

Energy and GHG emissions goals ....................................................................................................... 28

Energy and Scope 1 and 2 GHG emissions ........................................................................................ 28

The Cisco workplace ........................................................................................................................ 31

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Energy efficiency in our buildings, labs, and data centers ............................................................... 31

Labs and data centers .................................................................................................................. 32

GHG emissions from outsourced IT ................................................................................................. 33

Green building standards ............................................................................................................. 33

Renewable energy ........................................................................................................................... 33

Onsite renewable power ............................................................................................................... 33

Purchasing renewable electricity .................................................................................................. 33

Scope 3 GHG emissions...................................................................................................................... 34

Scope 3 reduction strategy .............................................................................................................. 34

Scope 3 supply chain operations ..................................................................................................... 34

Scope 3 category 1: purchased goods and services ....................................................................... 35

GHG emissions from outsourced IT – DCaaS, IaaS, SaaS and PaaS ........................................ 35

Scope 3 category 4: upstream transportation and distribution ........................................................ 36

Scope 3 category 6: business travel ................................................................................................ 36

Scope 3 category 7: employee commuting ...................................................................................... 36

Flexible work practices ................................................................................................................. 36

Transportation services ................................................................................................................ 37

Scope 3 category 11: use of sold products (product energy efficiency) .......................................... 38

Stakeholder engagement and standards development ................................................................ 38

Improving product energy efficiency ............................................................................................. 39

Reducing product energy consumption ........................................................................................ 41

Scope 3 category 12: end-of-use treatment of sold products (end-of-life) ....................................... 43

IT solutions for the environment .......................................................................................................... 43

Reducing GHG emissions from business air travel and teleworking ............................................... 43

Products and packaging materials .......................................................................................................... 44

Product and packaging goals .............................................................................................................. 44

Stakeholder engagement for the circular economy ............................................................................. 44

Circular design ..................................................................................................................................... 45

Product materials ................................................................................................................................. 46

Recycled material content ................................................................................................................ 46

Eliminating paper from new product shipments ............................................................................... 47

Materials of concern ......................................................................................................................... 47

Halogenated flame retardants ...................................................................................................... 47

Polyvinyl chloride .......................................................................................................................... 47

Batteries ........................................................................................................................................ 47

Product life-cycle management ........................................................................................................... 48

Use ................................................................................................................................................... 48

End of use ........................................................................................................................................ 48

Returns ......................................................................................................................................... 48

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Improving the customer returns experience ............................................................................. 48

Customer and partner programs ............................................................................................... 49

Cisco-internal programs ............................................................................................................ 49

Reuse ........................................................................................................................................... 50

End of life ......................................................................................................................................... 50

Harvesting ..................................................................................................................................... 51

Recycling ...................................................................................................................................... 51

Product packaging ............................................................................................................................... 53

Product packaging materials ............................................................................................................ 54

Product packaging end-of-life .......................................................................................................... 54

Water ....................................................................................................................................................... 55

Water usage ......................................................................................................................................... 55

Water stewardship ............................................................................................................................... 56

Water-energy nexus ............................................................................................................................. 57

Biodiversity (including land use) .............................................................................................................. 57

Operations ........................................................................................................................................... 57

Species conservation ........................................................................................................................... 58

Solid waste from operations (trash) ......................................................................................................... 58

RTP zero waste ................................................................................................................................... 60

Other campus waste initiatives ............................................................................................................ 60

Effluents (Liquid) ...................................................................................................................................... 60

Non-GHG emissions ................................................................................................................................ 60

Appendix I – Sustainability Accounting Standards Board (SASB) .......................................................... 62

Appendix II – Task Force on Climate-related Financial Disclosures (TCFD) .......................................... 64

The science and scenarios .................................................................................................................. 64

Analysis ................................................................................................................................................ 66

Appendix III – Supplier environmental engagement and performance ................................................... 70

Appendix IV – Cisco FY20 Scope 3 emissions ....................................................................................... 71

Appendix V – Past Cisco environment goals .......................................................................................... 72

Appendix VI – United Nations Sustainable Development Goals (SDGs) ................................................ 73

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List of tables

Table 1: Cisco environmental reporting frameworks .................................................................................... 8

Table 2: GRI standards environment topics compared to ETR sections ...................................................... 9

Table 3: Cisco materiality ranking of environment topics ........................................................................... 10

Table 4: Breakdown of GHG emissions by life-cycle phase for various Cisco product categories ............ 12

Table 5: IP phone and blade server breakdown of GHG emissions for manufacturing phase ................... 12

Table 6: Blade server impacts by life-cycle phase ...................................................................................... 12

Table 7: Blade server manufacturing environmental impacts by component or subassembly ................... 13

Table 8: Key environment ratings and rankings performance .................................................................... 13

Table 9: Cisco historical CDP Climate Change scores ............................................................................... 14

Table 10: Current Cisco environmental goals ............................................................................................. 16

Table 11: Cisco ISO 14001 certified site locations ..................................................................................... 20

Table 12: Cisco Environment Management System ISO 14001 certification ............................................. 20

Table 13: Environment aspect teams per region ........................................................................................ 20

Table 14: Supply-chain, environment-focused organizations and initiatives .............................................. 24

Table 15: Suppliers with public absolute GHG reduction target ................................................................. 25

Table 16: Supply-chain-related Scope 3 GHG emissions and reduction goal ............................................ 25

Table 17: Performance toward supplier zero waste goal ............................................................................ 26

Table 18: Self-assessment questionnaire coverage by supplier type ........................................................ 27

Table 19: RBA audit nonconformances for FY20, Environment category .................................................. 27

Table 20: Summary of Scope 1 and 2 GHG emissions

............................................................................. 29

Table 21: Electricity emissions factors

....................................................................................................... 30

Table 22: Summary of Scope 1 and 2 energy usage ................................................................................. 30

Table 23: Energy and GHG emissions reduction projects

........................................................................ 32

Table 24: Electricity from low-carbon sources (renewables) ...................................................................... 34

Table 25: Supplier adoption of absolute GHG reduction goals ................................................................... 35

Table 26: GHG emissions from outsourced IT services (IaaS, SaaS, PaaS). ............................................ 36

Table 27: Scope 3 emissions from employee commuting .......................................................................... 36

Table 28: Cisco locations with EV charging ................................................................................................ 37

Table 29: Percentage EVs in Cisco company cars ..................................................................................... 37

Table 30: Total estimated electricity and GHG emissions from use of sold products. ............................... 38

Table 31: Cisco product categories by power consumption and product revenue ..................................... 38

Table 32: Energy efficiency initiatives and organizations with whom Cisco actively engages ................... 39

Table 33: Product power efficiency improvements (large rack-mounted-equipment) ................................ 41

Table 34: Remote collaboration technology solutions ................................................................................ 43

Table 35: Circular economy-related initiatives and organizations in which Cisco participates ................... 44

Table 36: Progress toward meeting our virgin-plastics goal ....................................................................... 46

Table 37: Cisco product return programs ................................................................................................... 49

Table 38: Product return, reuse and recycling ............................................................................................ 52

Table 39: Performance toward foam reduction goal ................................................................................... 53

Table 40: Focus areas for sustainable product, packaging and fulfillment solutions.................................. 54

Table 41: Water use in direct operations .................................................................................................... 55

Table 42: Biodiversity and land use ............................................................................................................ 57

Table 43: Cisco solid waste reduction initiatives......................................................................................... 58

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Table 44: Recycling rates for solid waste (trash) from major campus locations ......................................... 59

Table 45: Solid waste from operations (trash) ............................................................................................ 59

Table 46: Effluent spills and discharges ..................................................................................................... 60

Table 47: Non-GHG emissions ................................................................................................................... 61

Table 48: SASB sustainability disclosure topics & accounting metrics (Hardware industry) ...................... 62

Table 49: TCFD recommended disclosures* .............................................................................................. 66

Table 50: Cisco climate-related risks and potential financial impact .......................................................... 68

Table 51: Cisco climate-related opportunities and potential financial impact ............................................. 68

Table 52: Supplier progress reporting to CDP and achieving key GHG-related milestones ...................... 70

Table 53: Scope 3 emissions for FY20 ....................................................................................................... 71

Table 54: Cisco completed environment goals ........................................................................................... 72

Table 55: United Nations SDGs aligned with Cisco environmental Initiatives ............................................ 73

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List of figures

Figure 1: Cisco reverse logistics locations .................................................................................................. 52

Figure 2: Atmospheric CO

concentrations at Mauna Loa Observatory ..................................................... 64

Figure 3: Atmospheric CO

concentrations for the past 800,000 years ...................................................... 65

Figure 4: Global total net CO

emissions in pathways limiting global warming to 1.5°C ............................ 66

Figure 5: Climate-related risks and opportunities ....................................................................................... 68

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Introduction

The Environment Technical Review (ETR) provides a comprehensive reference for all Cisco

environmental sustainability information. Information is provided either directly in this report or through a

hyperlink to other publicly accessible material. This report and information referenced therein should be

considered the comprehensive source for Cisco’s environmental sustainability reporting.

Because corporate social responsibility (CSR) reporting (1) includes a wide range of environmental,

social and corporate governance issues (ESG), and (2) addresses the interests of a broad range of

stakeholders—including customers, financial and industry analysts, shareholders and investors, media,

advocacy, academia and Cisco employees—Cisco is publishing its CSR information in three formats:

1. The 2020 Corporate Social Responsibility Impact Report (CSR Impact Report) provides summary and

highlight information on ESG topics of stakeholder interest.

2. This Environment Technical Review (ETR), is a detailed compendium of all Cisco environment-related

information. All environment information in the CSR Impact Report or the online ESG Reporting Hub is

included in this ETR.

3. An online ESG Reporting Hub

(ESG Hub) contains detailed information and data related to our social and

corporate governance ESG pillars, performance, policies and initiatives.

A list of all hyperlinks embedded in this report is provided as Appendix VII.

Environmental sustainability reporting frameworks

Based on feedback from stakeholders, especially customers, analysts, shareholders and advocacy

organizations, the four reporting frameworks shown in Table 1 were used in preparing this report.

Table 1: Cisco environmental reporting frameworks

GRI

Global Reporting Initiative

UN SDG

United Nations Sustainable Development Goals

• Economic, environmental, social

• Global comparability and quality

• 37 topic-specific standards

• 2015: Adopted by United Nations members

• Shared blueprint: peace and prosperity, people an

d the

planet, now and future

• 17 goals, detailed targets and indicators

SASB

Sustainable Accounting Standards Board

TCFD

Task Force on Climate-Related Financial Disclosures

• 11 sectors: 77 industry-specific standards

• Topics: 5 Dimensions; 26 Issue Categories

• Cisco

o Sector – Technology Communications

Industry – Hardware

• Financial impact of climate related risks and

opportunities

• Governance, strategy, risk management, metrics and

targets

GRI

Cisco’s ESG reporting has been prepared in accordance with the Global Reporting Initiative (GRI)

Standards (Core). We have standardized on GRI terminology for the major sections of this report. The

GRI standards address non-environment-related topics and that reporting is provided in the CSR Impact

Report and ESG Hub.

Tags to GRI topics are embedded throughout the report at the beginning of the relevant section and

reference the standard effective July 1, 2018. In organizing the ETR, we’ve adjusted the topic names

slightly to better align to the specifics of Cisco business as shown in Table 2.

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Table 2: GRI standards environment topics compared to ETR sections

GRI Topic-Specific Standard Related ETR section

301: Materials Products and packaging materials

302: Energy Energy and GHG emissions

303: Water and Effluents

Water

Effluents (Liquid)

304: Biodiversity Biodiversity (including land use)

305: Emissions Non-GHG emissions

306: Effluents and Waste

Effluents (Liquid)

Solid waste from operations (trash)

307: Environmental Compliance Environmental sustainability

Environmental compliance

308: Supplier Environmental Assessment Supplier environmental performance

There are two significant differences between our report headings and GRI topics.

• Energy and a subset of emissions—greenhouse gases (GHG)—are grouped under a single heading

• “Waste” refers to operational waste from our labs and offices. It does not include Cisco product

manufacturing. Refer to Products and packaging materials for information on Cisco’s circular economy

initiatives implemented throughout the product life cycle, from product design and manufacturing to

service and end-of-life management.

SDG

A cross-reference between Sustainable Development Goals (SDG) and Cisco’s environmental initiatives

and goals is provided as Appendix VI – United Nations Sustainable Development Goals (SDGs). All

environment-related SDGs are listed for clarity and completeness. Like GRI requirements, the UN

Sustainable Development Goals address non-environmental topics that are addressed in the CSR Impact

Report and the ESG Hub.

SASB

Guidance by the Sustainability Accounting Standards Board (SASB) was used in the preparation of

Appendix I – Sustainability Accounting Standards Board (SASB). SASB requirements address more than

environment-related issues, but our assessment against all SASB requirements is provided here for

convenience.

TCFD

Climate change is a very significant and material issue that continues to receive heightened attention by

our stakeholders, especially analysts and other members of the financial community. Cisco’s assessment

against the guidance provided by the Task Force on Climate-Related Financial Disclosures (TCFD) is

provided as Appendix II – Task Force on Climate-related Financial Disclosures.

General

Under this general major heading, sustainability materiality, environmental policies, our environmental

management system (EMS) and environment related employee engagement are discussed.

The remaining major sections address environmental topics using the terminology from the GRI

Standards as modified per Table 2.

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CSR materiality - environment

The environmental sustainability team at Cisco continually evaluates sustainability materiality based on

inquiries received daily from stakeholders, including customers, analysts, investors, advocacy and

employees. Every two years we complete a full materiality assessment, in partnership with an

independent environmental consultancy, to confirm our understanding of global priorities.

Prioritization based on environmental materiality has been stable for more than ten years. Our latest full

assessment, completed in FY19, confirmed our environment-related priorities remain:

• Energy and GHG emissions: energy consumption and GHG emissions from our operations, our supply

chain and our products.

• Product and packaging materials: circular economy initiatives implemented throughout the product life

cycle, from product design and manufacturing to service and end-of-life management

These top two issues are addressed through initiatives with dedicated funding and program structure.

Progress is motivated and measured through publicly announced goals and annual performance

reporting. Internally, our energy/GHG and circular economy programs have equal visibility, but

energy/GHG is ranked higher on our materiality assessment due to the global impact expected from

increasing GHG emissions in the Earth’s atmosphere.

All environment-related topics are stack ranked in Table 3 based on stakeholder input and our

environmental sustainability materiality assessment. We began publishing this stack ranking starting in

our 2011 CSR Report

(p. F2).

Table 3: Cisco materiality ranking of environment topics

Tier Environment topic

1 Energy / GHG emissions

Material use & waste

2 IT solutions for the environment

3 Water

Biodiversity (including land use)

Solid waste from operations (trash)

Effluents (liquid)

Non-GHG emissions

Cisco also takes action on Tier 3 environmental issues through normal, operational due diligence by the

responsible business functions. The order within Tier 3 also indicates a prioritization but recognizes a

wider uncertainty band compared to Tiers 1 and 2. Water is ranked highest in Tier 3 because of scarcity

in some areas where Cisco maintains operations, but also because of its substantial use in electricity

generation. Details of our efforts and performance are provided in the topic-specific sections of this

document.

In FY20, we continued to see increasing customer and investor interest in environmental sustainability, as

reflected in customer requests for proposals, customer and environmental advocacy surveys, and other

inquiries. The scope of environment impact includes our operations, extended operations (supply chain),

and products and services.

Stakeholder inquiries, life-cycle assessments (LCA) and key ESG rankings and ratings provide significant

insight into materiality and are discussed in the following sections. A sustainability materiality assessment

is separately completed for social and corporate governance issues with those results provided in the

ESG Reporting Hub

Our fiscal 2021 sustainability materiality assessment will utilize multiple methods, including big data and

direct stakeholder input. A full description of the sustainability materiality assessment process and the

current materiality matrix can be found on the ESG Reporting Hub

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Stakeholder inquiries

Cisco’s CSR business process is based on our annual sustainability materiality assessment and ongoing

stakeholder engagement. In addition to the formal materiality assessment, the environment team

independently gathers feedback on emerging issues, the quality and accessibility of our reporting, and

our sustainability performance from additional sources including stakeholder inquiries and key rankings

and ratings. “Stakeholder inquiries” is the umbrella term we use for questions we receive from a variety of

sources, including:

• Customer and partners. The visibility of environmental sustainability continues to increase in customer

and partner request for proposal (RFP), supplier qualification, and contract processes.

• Employees

• Financial and industry analysts

• Shareholders and investors

• Sustainability data aggregators, which includes companies like EcoVadis that collect sustainability

information for our customers and partners as well as a broad range of organizations that collect and

package sustainability information for resale or for their own analysis.

• Environmental advocacy groups

• Academia, including researchers and students

• Media

Environment-related topics form the majority of CSR-related inquiries from customers and partners.

These inquiries provide continuous, real-time insight into the environmental issues of interest to different

categories of stakeholders.

Life-cycle assessment

Cisco uses life-cycle assessments (LCAs) to estimate the GHG emissions associated with our products,

which feeds into our understanding of the environmental impacts of our products through their entire life

cycle.

Our LCAs use the five product life-cycle stages defined by the GHG Protocol in the

Product Life Cycle

Accounting and Reporting Standard, which itself is based on the ISO 14040 standard:

• Material acquisition and pre-processing

• Manufacturing

• Transport (distribution and storage)

• Use

• End-of-life

We continue to see that our products consume the largest proportion of energy and are responsible for

the most GHG emissions during the product-use life-cycle phase.

In building our LCA approach, we have used external tools and data sources, including thinkstep GaBi

7.3 and publicly available data sources, such as the International Energy Agency (IEA); the United

Kingdom’s Department for Business, Energy, and Industrial Strategy; and the Greenhouse Gas Protocol.

In FY19 we began using the Product Attribute to Impact Algorithm (PAIA) tool, which uses a streamlined

LCA methodology that relates product attributes such as Printed Wiring Board (PWB) area or product

weight to its global warming potential (GWP) impact. Using the PAIA tool, we have reduced our cost and

time to complete an LCA and, based on this experience, we continue to use the PAIA tool for LCA work.

One limitation of the PAIA is that only our servers and network switches are in scope for the tool. Due to

the similarity between the components used in our switches and routers, we are working with the PAIA

team to evaluate whether or not the network switch tool could be expanded to include routers. This would

allow us to bring a larger share of our products in scope of the PAIA tool.

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Table 4 provides a snapshot of percent of GHG emissions by life-cycle phase for a representative sample

of Cisco products. The use phase is the leading contributor to our product’s GHG emissions ranging from

81% to 95% of total life-cycle emissions. This range of total life-cycle emissions varies depending on

weight, material, and power.

Table 4: Breakdown of GHG emissions by life-cycle phase for various Cisco product categories

Cisco device Life-cycle phase (percent of total emissions)

Use Manufacturing Transport End-of-Life

IP Phone

81.5% 19.4% 0.9% -1.8%

Chassis-based switch

88.0% 5.2% 6.8% -0.1%

Desktop switch/router 92.4% 6.1% 1.7% -0.2%

Large chassis router/switch

92.7% 5.6% 2.0% -0.3%

Chassis-based router

95.2% 3.0% 1.1% 0.6%

Blade-server

91.2% 9.0% 0.1% -0.3%

FY19 LCA

FY13 or earlier LCA

Our last full life-cycle assessments were completed in FY19 on an IP phone and blade server. The results

were similar to previous assessments that showed the use phase dominates product life-cycle GHG

emissions.

From a product manufacturing perspective, LCAs also help us understand how the various

subassemblies in a given product impact manufacturing phase GHG emissions. Table 5 provides a

breakdown of GHG emissions by product component or subassembly for an IP phone and blade-server.

Table 5: IP phone and blade server breakdown of GHG emissions for manufacturing phase

Percent of GHG emissions by product component type

Cisco device

Printed

wiring

board

Integrated

circuits

Hard disk

drive

Electronics

(other)

Packaging

Enclosure

materials

Assembly

& test

LCD screen

IP Phone 21% 40% na 14% 2% 17% 4% 2%

Blade-server 46% 24% 22% 5% 2% <1% <1% na

LCAs also provide information on other environmental impacts besides GHG emissions. The extraction

and processing of precious metals like copper and gold required to make printed circuit boards (PCBs)

and integrated circuits (ICs) are the primary drivers of all categories of environmental impact, including

abiotic depletion, which is the decreasing availability of non-living resources like minerals and fossil fuels.

Hard-drive manufacturing processes, including washing and cooling of production chemicals, are the

primary drivers of blue water consumption and smog formation, respectively.

• Table 6 breaks out LCA environmental impact categories by life-cycle phase for a blade server.

• Table 7 breaks out LCA environmental impact categories by product component or subassembly for the

same blade server.

Table 6: Blade server impacts by life-cycle phase

Life-cycle phase (percent of total impact)

Life-cycle phase environmental impact Use Manufacturing Transport End-of-Life

Global warming potential 91% 9% 0% 0%

Primary energy demand 94% 6% 0% 0%

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Blue water consumption 79% 21% 0% 0%

Eutrophication potential 77% 21% 1% 0%

Acidification potential 85% 15% 1% 0%

Abiotic depletion 3% 98% 0% -1%

Smog formation potential 66% 34% 0% 0%

Table 7: Blade server manufacturing environmental impacts by component or subassembly

Manufacturing environmental

impact

Printed

wiring board

Integrated

circuits

Hard disk

drive

Electronics

(other)

Packaging

Enclosure

materials

Assembly &

test

Global warming potential

46% 24% 23% 5% 2% 0% 0%

Primary energy demand

52% 34% 1% 7% 5% 0% 0%

Blue water consumption

26% 8% 59% 6% 1% 0% 0%

Eutrophication potential

44% 20% 31% 4% 1% 0% 0%

Acidification potential

38% 26% 26% 9% 1% 0% 0%

Abiotic depletion

39% 51% 0% 9% 0% 0% 0%

Smog formation potential

17% 9% 71% 3% 0% 0% 0%

ESG rankings and ratings

Cisco relies on six key rankings to gain insight into how Environmental topics are prioritized and to

evaluate our sustainability reporting and performance, shown in Table 8. We have chosen these rankings

based on their public visibility, the transparency of the scoring methodology, and our ability to engage

consistently with analysts to discuss their priority topics and our areas for reporting and performance

improvement.

Except for Barron’s and the Wall Street Journal, which have only reported rankings the last three years,

we have maintained this set of benchmarks for more than five years. For example, we’ve reported to CDP

since its inception and to RobecoSAM (DJSI) since at least 2005.

Table 8: Key environment ratings and rankings performance

Key Environment Benchmarks 2016 2017 2018 2019 2020

S&P Dow Jones Indices (DJSI) World & North

America

World & North

America

World & North

America

World & North

America

World & North

America

Corporate Knights Global 100 (Release date) #57 #3 #7 #14 #4

CDP Climate Change A List A List A List A List A List

Institute of Public and Environmental Affairs (IPE)

Corporate Information Transparency Index (CITI)

IT Sector

#11 #12 #7 #2 #2

Barron’s Most Sustainable U.S. Companies - - #1 #2 #7

WSJ Management Top 250 - #9 #13 #5 #6

For information on Cisco’s historical CDP Climate Change performance see Table 9. The CDP Climate

A List

includes companies from around the world that have been identified as leaders in their reporting

and actions to reduce greenhouse gas emissions.

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Table 9: Cisco historical CDP Climate Change scores

CDP Year / Cisco FY

Cisco CDP

Score

Disclosure /

Performance

CDP

A List

CDP

CDLI

CDP

CPLI

2005 (CDP1) / FY04 Responded

–

2006 (CDP2) / FY05 70

–

2007 (CDP3) / FY06 70

–

2008 (CDP4) / FY07 96

√

2009 (CDP5) / FY08 88

√

2010 (CDP6) / FY09 92 / A

√ √

2011 / FY10 98 / A

√ √

2012 / FY11 96 / B

√ –

2013 / FY12 100 / A

√ √

2014 / FY13 100 / A

√ √

2015 / FY14 100 / A √ √ #

2016 / FY15 A √

2017 / FY16 A √

2018 / FY17 A √

2019 / FY18 A √

2020 / FY19 A √

√: on index

–: not on index

#: CPLI transitioned to the A List in 2015; CDLI followed in 2016

CDLI: Carbon Disclosure Leadership Index

CPLI Carbon Performance Leadership Index. Performance scoring and the CPLI began with CDP 2010.

Clean revenue

Each year more stakeholders are asking us to quantify the percent of our yearly revenue that is

considered “clean” or “green.” Different stakeholders provide differing criteria defining what should be

included in this metric. The method provided by Corporate Knights, in their Clean Taxonomy version 3.0

uses the following definition: “Clean revenue measures a company’s revenue from all goods and services

which have clear environmental and, in a limited number of well-defined cases, social benefits. This

includes revenue from clean transition, low-carbon economy and circular economy revenue segments.”

Revenue included in our Corporate Knights green revenue calculation includes:

• Products with environmental certifications (e.g. ENERGY STAR, EPEAT)

• Collaboration products such as Webex Meetings, Webex Rooms, Cisco Virtual Office and Meraki Virtual

Office.

• Products that have been recycled or refurbished

• Software and services that reduce energy consumption and enable longer product life

Based on Corporate Knights Clean Taxonomy version 3.0, we determined that 58 percent

of our FY19

revenue can be considered clean/green. Although this FY19 figure is a year behind our typical

The FY19 clean revenue percent reported in our FY19 CSR report has been recalculated and restate here using version 3.0 of the Corporate Knights

taxonomy. The ‘2021 Corporate Knights Global 100’ survey requests FY19 data.

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environmental reporting cycling it is what is requested by Corporate Knights during this (FY20) reporting

year.

FTSE’s Green Revenue Classification System definition 2.0

defines green revenue as “those that are

derived from products and services that have a positive environmental utility: that help prevent, restore

and adapt to issues deriving from climate change, natural resource limitations and environmental

degradation.”

Based on the FTSE classification system, we have determined that 27 percent of our FY19 revenue can

be considered green. Revenue included in our FTSE green revenue calculation includes:

• Collaboration products such as Webex Meetings, Webex Rooms, Cisco Virtual Office and Meraki Virtual

Office.

• Products that provide private and hybrid cloud solutions for enterprise customers, such as Cisco ONE

Enterprise Cloud Suite.

• Products that provide Cisco smart grid solutions, including Cisco Connected Grid Network Management

solution which helps utility operations manage converged smart grid communications networks.

• Cloud services such as Cisco Powered cloud services for infrastructure-as-a-service and Cisco

Powered Desktop-as-a Service solution.

We believe stakeholders should use caution in comparing companies with a self-reported green/clean

revenue number. There are multiple and differing frameworks that are open to interpretation, which

makes this reporting difficult to verify. Due to competitive considerations, the categories that make up

clean/green revenue are often not aligned with current public financial reporting.

Environmental policy

Cisco has developed a series of policies over the last ten years that guide our environmental efforts.

These policies declare our values and inform our decision-making. Our practices are:

• We will eliminate or mitigate our environmental impacts. Cisco accepts responsibility for negative

environmental impacts from our operations, extended operations (supply chain), and throughout the life

cycle of our products.

• We will implement our environmental policies consistently across all Cisco operations and legal entities

worldwide, all extended operations, and all products.

• We will govern our environment-related efforts using an externally certified,

ISO 14001, environmental

management system.

• We will take a broad approach. The scope of our EMS includes energy and GHG emissions, product

and packaging materials, water, biodiversity and land use, solid waste from operations, liquid effluents,

and non-GHG emissions.

• We will lead by example. When we ask our suppliers to contribute to our efforts, it will be on the

foundation of Cisco’s successful action. Our supply chain environmental requirements will be

documented, retrievable, and made available through our annual CSR reporting and our

report

archives.

• We will listen. The Earth’s ecosystem is complex and there is much to be learned from our customers,

our employees, advocacy groups, academia, and other stakeholders.

• We will identify key analysts and advocacy groups and form strong working relationships. This will help

us build a consistent, independent, external measure of our environmental performance.

• We will identify our environmental impact through annual sustainability materiality assessments

informed by stakeholder listening. We will follow the precautionary principle in establishing priorities and

implementing initiatives.

• We will set unambiguous, public goals to drive improvement and demonstrate accountability. Please

refer to Table 10, Cisco current environmental goals, for more detail. A table of past environment goals

is in Appendix V.

Cisco 2020 Environment Technical Review 16 feedback?

• We will report annually and publicly our environmental performance, prioritizing full disclosure and the

stakeholder perspective.

Environment goals

Our sustainability materiality assessment process incorporates input and feedback from our stakeholders

as well as a technical assessment of the global problem and Cisco’s contribution to both the problem and

the solution. In 2006, we announced our first public goal, for business air travel reduction. Since then,

we’ve understood the importance of public goals for our most material issues, accompanied by a strong

governing protocol. Table 10 lists Cisco’s current goals for our top 2 material issues in chronological

order.

Links in the table’s left-hand column direct to the Cisco blog post announcing each goal. Links in the right

column direct to pages of this document if we are reporting performance against the goal this year. Table

54 lists past goals with a link and page reference to the CSR Impact Report corresponding to the target

year, or completion year if the goal was reached early.

Table 10: Current Cisco environmental goals

Date goal

announced

Goal topic

Goal statement (performance table)

September 2017 Energy / GHG 1

. Reduce total Cisco Scope 1 and 2 GHG emissions worldwide by 60 percent absolute by

FY22 (FY07 baseline). (Table 20)

2. Use electricity generated from renewable sources for at least 85 percent of our global

electricity by FY22. (Table 24)

Assurance statement

September 2018 Energy / GHG

Improve large rack-mounted-equipment system power efficiency—as measured from the

input power from the facility to the board-mounted ASICs, memory and other chip

devices—from 77 percent to 87 percent by FY22 (FY16 baseline). (Table 33)

October 2018 Product and

packaging materials

Decrease the use of virgin plastic by 20 percent by FY25 (FY18 base year)

(Table 36)

December 2018

(p. 19)

Products and

packaging materials

Design 100 percent of new Cisco products and packaging to incorporate circular design

principles by FY25.

July 2019

Product and

packaging materials

1. Reduce all foam used in Cisco product packaging by 75 percent, measured by weight,

by FY25 (FY19 base year). (Table 39)

2. Increase product packaging cube efficiency by 50% by FY25 (FY19 base year)

3. 70 percent of Cisco component and manufacturing suppliers by spend will achieve a

zero-waste diversion rate at one or more sites by FY25.

(Table 17)

August 2019 Energy / GHG 1. 80 percent of Cisco component, manufacturing, and logistics suppliers by spend will

have a public, absolute GHG emissions reduction target by FY25.

(Table 15)

2. Reduce Cisco supply chain-related Scope 3 GHG emissions by 30 percent absolute by

FY30 (FY19 base year).

(Table 16)

July 2020 Product and

packaging materials

Eliminate all paper documentation included in new product shipments by FY21.

The plastics included in this goal make up the majority of Cisco’s use. However, it excludes plastics contained in commodity

components sourced from suppliers (such as printed circuit boards). Most of these electronic components require the electrical

insulating property provided by plastics.

This goal language has been slightly modified from that published in FY19, to better align with industry standard terminology. It

does not reflect a change in the goal itself. We refined our packaging efficiency efforts to focus on packaging volume rather than

volume per weight of product. In doing so, we will both reduce the total amount of packaging used and realize logistics savings.

According to current standard definitions used in certification protocols, “zero waste” diversion is defined as a 90 percent or

greater overall diversion of solid, nonhazardous wastes from landfill, incineration (waste-to-energy), and the environment.

Diversion methods can include reduction, reuse, recycling, and/or compost.

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.

Cisco 2020 Environment Technical Review 17 feedback?

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 1 and Scope 2 GHG emissions. Transportation emissions will

be reported as Upstream Transportation and Distribution according to GHG Protocol methodology because they are paid directly

by Cisco.

Exceptions to this policy will be allowed where it is business critical or legally required for the product to include paper

documents in the shipment.

Cisco has also made public environmental commitments that are outside of our materiality-driven goal

process but provide inspiration for attacking difficult problems that aren’t well suited for a fixed horizon

goal. For example:

• At Davos in January 2018, CEO Chuck Robbins committed to 100 percent product return, pledging that

Cisco will take back used equipment upon request from any customer, expand tools and incentives to

promote that practice, and grow our reuse of equipment through remanufacturing, refurbishment, and

repair (Capital Equipment Pledge

from World Economic Forum).

• At our RTP campus, we are piloting techniques to achieve water neutrality and zero waste

• Cisco e-scrap recycling partners will maintain a diversion rate to landfill of less than 0.38 percent by

weight of all material received.

Cisco’s Scope 1 and 2 and Scope 3 (product power efficiency) emission reduction goals have been

approved by the Science-Based Targets initiative

(SBTi). Our scopes 1 and 2 targets are consistent with

reductions required to keep global warming to “Well-below 2°C”, per the SBTi target classification.

Environment governance

Corporate Affairs, part of the People and Communities organization (HR), champions Cisco’s strategic

approach to corporate social responsibility, including environmental sustainability. Corporate Affairs

stewards our commitments to sustainability, our performance, and transparency in our public reporting.

The Corporate Affairs environment team is responsible for:

• Setting and stewarding Cisco’s sustainability strategy and materiality process

• Engaging with internal and external stakeholders

• Researching and monitoring environment-related issues and trends

• Conducting impact assessments and developing programmatic data-driven insights

• Producing our annual CSR reporting

Business functions also own sustainability priorities. Teams integrate priorities into their business strategy

by setting goals, implementing plans, and measuring performance. Some priorities touch multiple

functions. In these cases, we establish cross-functional teams to align and implement against our

commitments. Governance of our environment program has evolved as sustainability has become better

integrated into the business.

Corporate Affairs, reporting to the Chief People Officer, champions Cisco’s overall CSR strategy,

including environmental sustainability. CSR and environmental sustainability are represented through Tae

Yoo, senior vice president of Corporate Affairs, and Francine Katsoudas, executive vice president and

Chief People Officer.

Energy/GHG emissions

Three executives sponsor our energy and GHG initiatives. This structure reflects the multipronged nature

of the issue affecting operations, extended operations (supply chain), and our products.

• The Executive Vice President, Chief of Operations (COO) is the executive sponsor for all initiatives

impacting operations, including Scope 1 and 2 emissions reduction, renewable energy and our

response to the annual CDP climate change questionnaire.

Overall CSR governance is discussed in the ESG Reporting Hub.

Cisco 2020 Environment Technical Review 18 feedback?

• The Senior Vice President, Supply Chain Operations is the sponsor of initiatives related to supplier

operations’ energy efficiency and GHG emissions reduction.

• The Senior Vice President, Hardware Engineering, along with two Cisco Fellows, sponsors product

power architecture and product energy efficiency efforts.

Circular economy

In 2018, Cisco launched an enterprise-wide circular economy program. The program extends from how

we design, build, and deliver products, to how we value the assets we have and turn them into new

products. We also apply Cisco technology to support our customers in their own circular transformations.

Our circular economy initiatives are focused in five major areas:

• Circular design: Design products and packaging with circularity in mind (e.g. design for reuse, repair,

recycling, and resource efficiency)

• Circular operations: Reduce consumption and use renewable sources across our value chain

• Circular consumption: Manage our equipment for multiple life cycles and deploy new business models

to facilitate this approach

• Circular solutions: Shape and pioneer technology-driven solutions and services to enable circular

economy value creation for customers

• Ecosystem leadership: Advance the circular economy through industry innovation, collaboration, and

public policy

The program operates under a dedicated program management office under the executive sponsorship of

our Senior Vice President of Global Supply Chain Operations. The team runs multiple levels of

governance bodies and cross-functional working groups to establish and achieve strategic priorities

across the company. These include:

• Circular Economy Executive Change Network: Champions Cisco’s holistic circular economy vision;

drives engagement and business alignment.

• Operational Leadership Committee: Responsible for making decisions, taking accountability,

influencing, and allocating resources for circular economy end-to-end at Cisco.

• Circular Consumption and Circular Design Steering Committees: Responsible for driving strategic

initiatives to advance product returns and reuse and product and packaging design, respectively. These

committees operate cross-functionally and are responsible for helping to envision the future state,

making decisions, taking accountability, influencing, and allocating resources for circular economy

within their specific pillar of focus.

• Working Groups: Responsible for initiating, implementing, and managing specific circular economy

projects; organized by pillar or strategic priority area.

• Circular Economy Regional Leader Network: Responsible for championing our vision within their

regions, facilitating local engagement, and providing business support.

Risk management

The Board of Directors, acting directly and through the Audit Committee

, is responsible for oversight of

risk management at Cisco, including risks associated with CSR and sustainability. Our enterprise risk

management (ERM) process supports the identification, assessment, mitigation and monitoring of risks—

including climate—and Cisco’s response to those risks. Risks are identified through industry reports, peer

benchmarks and executive interviews. Input is prioritized, risk owners are assigned, risk management and

mitigation work plans are developed, and metrics measuring the effectiveness of risk management and

mitigation actions are tracked and reported.

Design for environment

In the past, we used a Design for Environment (DfE) program which incorporated environmental design

principles into our products and manufacturing processes. Our DfE program included both formal

requirements (for example, ECMA-TR/370) and best practices developed within our business which led to

Cisco 2020 Environment Technical Review 19 feedback?

fewer raw materials used, less packaging needed, and product refurbishment and recycling becoming

more feasible and effective.

Cisco’s DfE approach focused on the following areas:

• Energy efficiency (with a goal to improve system power efficiency of large rack-mounted equipment

from 77 percent to 87 percent by 2022 (FY16 baseline)

• Reduction of hazardous materials

• Design for upgradability and longevity

• Recycling markings on plastic components (ISO 11469, formerly SPI codes) for ease of sorting during

recycling

• Packaging and fulfillment (reduction of materials and package volume as well as logistics impacts)

• Ability to opt out of product accessories not needed (power cords, cables)

• Use of recycled content materials and materials with less environmental impact

• Standardized and modularized components and enclosures, which allow us to reduce use of unique

components on each product

• Design for disassembly, repair, and reuse, using easily separable components with similar materials to

facilitate recycling and reusable components

We have built on our DfE principles to form a holistic circular design strategy focused on five main areas:

• Material Use

• Standardization and modularization

• Sustainable packaging

• Smart energy consumption

• Design for disassembly, repair, and reuse

Further details on our Circular Design Principles can be found in the Products and packaging materials

section of this document.

Environmental management system

Cisco’s ISO 14001 Environmental Management System (EMS) is a global framework that touches all

functions and aspects of our CSR program. It relies on individual accountability, management

responsibility, measurement of key performance indicators (KPIs), and a continuous improvement

philosophy to meet business and environment goals and drive environmental performance.

Cisco’s Corporate Environmental Policy

outlines Cisco’s high-level environmental framework that helps

make our EMS so successful, driving continuous improvement of Cisco’s environmental performance.

Our EMS is certified by TUV SUD America Inc. to the international EMS standard ISO 14001:2015. A

copy of our EMS certification is available for

download. We have found that an increasing number of our

customers request that we have and maintain our EMS certification.

We select Cisco sites for ISO 14001 certification based on criteria including:

• Facility size and lab area

• Building headcount capacity or persons housed

• Primary facility function

These criteria focus on sites with the greatest potential to reduce negative environmental impacts and

enhance positive impacts. Once we’ve selected a site for certification, we evaluate its associated impacts,

including corporate functional areas; associated products, activities, or services at that location; and the

environmental impacts associated with the generation or use of materials, impacts on air and water, and

depletion of natural resources. Using this information, we calculate an environmental score to further help

Cisco 2020 Environment Technical Review 20 feedback?

us prioritize facilities and issues. Each site aligns with Cisco’s corporate sustainability priorities, in addition

to site-specific goals. Cisco continually assesses existing sites and acquisitions against the certification

criteria and incorporates them into the ISO 14001 certification roadmap to meet business and customer

needs. Table 11 shows Cisco’s global ISO 14001 certified site locations by region.

Table 11: Cisco ISO 14001 certified site locations

Americas

Europe, Middle East, Africa, and Russia

(EMEAR)

Asia Pacific, Japan, China, and India

(APJCI)

Austin, Texas

Alpharetta, Georgia

Lawrenceville, Georgia

Boxborough, Massachusetts

Fulton, Maryland

Herndon, Virginia

Kanata, Canada

New York, New York

Richardson, Texas

Research Triangle Park, North Carolina

San Jose, California

Toronto, Canada

Amsterdam, Netherlands

Bedfont Lakes, United Kingdom

Reading, United Kingdom

Brussels, Belgium

Dusseldorf, Germany

Galway, Ireland

Krakow, Poland

Netanya, Israel

Paris, France

Vimercate, Italy

Bangalore, India

Beijing, China

Hong Kong, China

Shanghai, China

Singapore, Singapore

St. Leonards, Australia

N. Sydney, Australia

Tokyo, Japan

Scope and implementation

Cisco’s ISO 14001 certified sites are audited annually by TUV SUD America Inc. Sites that were part of

an acquisition are included in the scope of our corporate environmental policy and associated

environmental initiatives. Therefore, they may become 14001 certified and audited. Table 12 shows our

ISO 14001 certification KPIs.

Table 12: Cisco Environment Management System ISO 14001 certification

KPI FY16 FY17 FY18 FY19 FY20

Number of Cisco sites with ISO

14001 certification

26 30 32 32 31

Percent of real estate portfolio with

ISO 14001 certification

>90%

We have met our goal of certifying a high percentage of our real estate portfolio. We will maintain >90 percent coverage of sites

that meet the certification criteria.

We use our EMS process to help identify our most significant environmental impacts, evaluate their risks

at each Cisco site, and set relevant corporate and local objectives. All ISO 14001 certified sites have

environment aspect teams. Each site’s team reports on goals, initiatives, and metrics to measure our

environmental performance. Local initiatives are aligned to corporate-level programs where possible.

Table 13 lists the number and type of aspect teams per region.

Table 13: Environment aspect teams per region

Aspect Teams

Global

Teams

Americas

Europe, Middle

East, Africa and

Russia

(EMEAR)

Asia Pacific,

Japan, China

and India

(APJCI)

Total

Waste reduction and

recycling

6 7 9 22

E-scrap management

√ 13 10 2 25

Energy management

√ 0 2 9 11

Green Initiative/

Environmental awareness

7 5 0 12

Cisco 2020 Environment Technical Review 21 feedback?

Wastewater management 1 0 0 1

Total per region 27 24 20 71

These teams have site-specific activities and goals but also support a corporate-level/global goal.

Used at smaller sites, these teams typically include activities around employee engagement, energy management, e-scrap

management, waste reduction and recycling, and local “green” activities.

Cisco’s corporate sustainability activities are included in our certified EMS and are part of the internal and

external audits we perform annually. This enables us to internally track key corporate environmental

performance goals, initiatives, and metrics.

Our EMS aligns closely with our circular economy, GHG emissions, waste and energy management

programs and supports the management of our sustainability information. This alignment has helped us

automate our sustainability data collection and focus resources on other important tasks, such as

evaluating and implementing mitigation projects. Internal EMS audits provide insight into how our

environmental processes and commitments have been implemented and how well we are improving our

EMS at our certified sites. The frequency of these audits depends on criteria such as site size, operational

activities at the site, and the results of previous audits. In a typical three-year period, every site will

receive one on-site audit and one virtual audit.

As part of our ISO 14001 certification, we participate in annual audits conducted by a third-party registrar.

These audits identify areas of improvement and performance while providing external validation and

verification of our EMS processes and programs.

Cisco has piloted virtual external ISO 14001 certification audits with our third-party registrar. For the last

three years, at least one of our annual external site audits is done virtually using Cisco technology. This

helps decrease Cisco’s travel footprint.

In response to the 2020 COVID-19 pandemic, the environmental programs and aspect teams reviewed

their activities, metrics and goals to make needed adjustments to align with the March 2020 transition to

remote working. Several teams developed innovative ways to engage with employees, while others had

to adjust timelines and programs for in-person activities like our company wide Recycle IT Day. The ISO

14001 EMS internal and external audit programs utilized Cisco technology to shift completely to virtual

audits. This resulted in a Best Practice to ensure effective ‘site’ audits where accomplished while teams

were not traveling, and only critical employees were allowed on site. The ISO 14001 EMS and associated

green programs and activities adapted to the physical distancing requirements dictated by the pandemic

and were still able to realize some positive outcomes.

During our internal and external audits in FY20, Cisco received 19 Positive Comments and five Best

Practice recognitions on our ISO 14001 certified EMS. The Positive Comments were primarily tied to

innovative employee engagement, activities and communication, improving Cisco environmental

performance, excellent and meticulous green metrics, exceeding environmental goals and targets, risk

management and aligning our day-to-day operations with sustainability in mind. The Best Practices were

found across the globe and include:

• Cisco’s green product design resulting in the reduction of e-scrap and waste

• A focus on green operational management, actively mitigating environmental risks and impacts

• Emergency response SMOKE TENT program where volunteers were trained on life saving evacuation

techniques, e.g. gain better visibility by crawling when an area is filled with smoke

• Detailed and thoughtful reporting and easily accessible and comprehensive metrics in the

environmental portion of the FY19 CSR report

• Adapting to the remote and virtual world required given the COVID-19 pandemic. This has led to the

creation of an innovative virtual site audit process making them more immersive and value-add

All numeric claims made in this ETR are subject to a multiday, detailed, bottom-up audit conducted by our

internal ISO 14001 audit team and part of the annual ISO 14001 internal audit plan. Verification is key to

reporting valid data and helps us actively identify needed corrective actions. All environmental claims

Cisco 2020 Environment Technical Review 22 feedback?

made in the 2019 CSR report were successfully audited and verified through Cisco’s internal audit

process. Cisco’s environment-related claims in the 2020 ETR will be audited in FY21.

Environmental compliance

Cisco has incurred no significant fines— defined as more than $10,000—in any of the last five years. Nor

have we been subject to nonmonetary sanctions for noncompliance with environmental laws and

regulations. Cisco is not aware of any formal grievance filed about environmental impacts.

Cisco closely monitors developing Waste Electrical and Electronic Equipment (WEEE) legislation globally

and complies with applicable WEEE regulations. Products are labeled with a crossed-out “wheelie bin”

symbol to encourage users to reuse or recycle electronics instead of putting them in the trash. For

additional information on our compliance with the WEEE Directive and other takeback and recycling

regulations visit WEEE Compliance

on Cisco’s website.

Environment employee engagement

We encourage employees to be global problem solvers related to environmental sustainability. The

actions they choose to take often depend on their experiences, their location, their expertise, and issues

they care about. Through digital tools, educational activities, and volunteer opportunities, Cisco helps

improve employees’ awareness of the many ways to get involved.

Education and awareness

Cisco employees receive many hours of education and awareness per year. One hour of our New

Employee Orientation (NEO) is dedicated to sharing information about Cisco’s CSR program. We also

help employees incorporate environmental design principles into our products, packaging, and solutions.

To further embed environmental practices into our business operations, we offer employee training on our

business management system. This training covers our Environment Management System (EMS) and

environmental policies. The supply chain human rights training educates employees on how they can

help follow through on our human rights commitments. We also provide ad hoc training to employees on

topics such as correct waste sorting on campus.

The Cisco Green Team Network (GTN) is a global employee-led team with 12 local chapters and

hundreds of members. Cisco GTN envisions a more environmentally sustainable business and world. It’s

made up of people passionate about educating their fellow employees and making change. Chapters

raise awareness of environmental issues, share how to make changes at work and at home, and connect

employees with local resources—all while having fun. GTN-sponsored discussions and activities have

included the benefits of a plant-based diet, how to plant trees, and tips for composting at home.

Since Cisco GTN was established, the team has:

• Eliminated paper cups from select Cisco buildings in India, Europe, and the U.S.

• Established community gardens in San Jose, California and Bangalore, India

• Developed an urban farm at our Diegem, Belgium, site

• Designed and installed shadow boxes above the landfill, recycling, and composting receptacles in San

Jose and RTP cafeterias to help employees quickly and easily sort waste

• Received Cisco’s Excellence in Environmental Stewardship award (December 2017)

In addition, Cisco hosts events for employees to learn more about sustainability programs and current

opportunities to get involved, such as SustainX

, part of our annual Earth Aware campaign. Learning

opportunities include:

• Cisco Green. This is a hub on our internal social media site that enables employees to learn about

Cisco’s environmental sustainability activities. It provides links to programs, information, and other tools.

• Cisco GreenHouse. In 2016, we launched an interactive sustainability web platform for employees

hosted by WeSpire. Cisco GreenHouse connects passionate employees who want to find ways to lead

Cisco 2020 Environment Technical Review 23 feedback?

more sustainable lives with likeminded peers all over the world. By the end of FY20, more than 8,000

employees had joined the site and taken 48,000 actions to learn about or be more sustainable.

• SustainX. SustainX

is our thought leadership forum on sustainability. In FY20, our fifth annual event

was 100% virtual. During this event, we invite internal executives to share what their teams are doing to

reduce their environmental impact and external speakers to discuss the innovative ways they are

working to improve the environment. In FY20, leading environmentalist and author Paul Hawken shared

his

“Drawdown” approach to addressing global warming, and a Cisco Fellow explained how our new

8000 Series routers save significant amounts of power and materials.

• Virtual presentations. Cisco Green Teams hosted many Webex presentations for employees to learn

more about topics such as living a zero-waste lifestyle, environmental justice, and cleaning local

watersheds, as well as a sustainability trivia event. We even gave employees a virtual tour of the

new

beehives at our Research Triangle Park campus.

• Circular economy newsletter and Webex Teams space. Each quarter, the newsletter highlights circular

economy success stories, provides updates on progress towards our public goals, and shares

opportunities to collaborate on circular initiatives. Hundreds of employees keep tabs on the latest

announcements and events while connecting with others enthusiastic about sustainability.

• Circular Economy webinars and internal website. In fiscal 2020, we hosted two employee webinars on

topics related to circular operations and circular design. We launched an internal website and case

studies on the Cisco Circular Design Principles.

• Circular Economy working groups. Cisco regularly convenes a variety of extended-team workgroups.

These groups include the Circular Design Working Group, the Circular Economy Regional Leader

Network, and the Circular Economy Sales Champion Network.

• The Cisco Responsible Sourcing campaign. Launched in fiscal 2020, the campaign is raising internal

awareness of our commitment to source products ethically and sustainably. One element of the

campaign is our Champions of Sustainability, a recognition program that highlights the people behind

responsible sourcing at Cisco across our Supply Chain Operations and Global Procurement Services.

Activities and volunteering

Cisco provides opportunities for employees to volunteer or take part in annual sustainability events. Cisco

employees can also volunteer to help with a sustainable business project through our stretch assignment

program or create their own green team to advocate for sustainable changes in their location.

• Annual shutdown: Cisco requires employees in North America, and encourages other employees

worldwide, to take time off at the end of December. The shutdown gives us an opportunity to power

down facilities and unused equipment during a time when much of our workforce is already taking time

off. Over the 10-day shutdown beginning in December 2019, Cisco avoided approximately $690,000 in

energy costs and 3,400 metric tonne CO

e of emissions. Employees working in buildings in India, Hong

Kong, reduced their electricity consumption by at least 40 percent during the shutdown.

• Stretch assignments: Cisco groups post stretch assignments for employees to get involved in

sustainability-related initiatives. Examples of stretch assignments include managing communications for

sustainability-related activities, calculating sustainable solutions for our customers, and circular

economy projects focused on zero-waste initiatives at our manufacturing sites and embedding our

Circular Design Principles into our internal tools and processes.

Given COVID-19 restrictions, employees were not able to participate in annual sustainability events.

Once employees are cleared to return to our offices, Cisco will re-institute these programs. Some

examples are:

• Recycle IT Day: Employees love Recycle IT Day. Many collect their used electronics year-round and

bring them to their local Cisco office on Earth Day in April. Cisco responsibly recycles the equipment

using the same vendors we use to recycle Cisco products. In FY19, Cisco collected 422,108 pounds

(191 metric tonne) of electronic waste from over 160 sites around the world.

• Earth Aware: While Earth Day is just one day, Cisco extends the celebration with a two-month

employee volunteerism and awareness campaign, Earth Aware. During Earth Aware, we invite

employees to practice sustainable behaviors like biking to work and properly sorting waste in cafeterias.

We also host activities like on-campus farmer’s markets and information sessions about Cisco’s species

Cisco 2020 Environment Technical Review 24 feedback?

conservation efforts. Earth Aware sparks new ideas and renews dedication to live in more

environmentally responsible ways.

• Bike to Work Day (BTWD). As part of the Earth Aware campaign, Cisco sponsors Bike to Work Day

activities. While it is a global opportunity, Cisco employees and contractors in San Jose come out in

large numbers. They visit Cisco’s energizer station, grab bagels and fruit, get free chair massages, use

the repair station, and visit with fellow cyclists. In partnership with the Silicon Valley Bike Coalition,

Cisco helps remove thousands of cars from the roads in the Bay Area through this event. Also, in the

month of May, employees in Bangalore take part in the Zero Emissions Ride.

Supplier environmental performance

Cisco has consolidated its supplier sustainability requirements into a single document linked from the

Supply Chain Sustainability web page. The Environmental Stewardship and Circular Economy sections of

this document, address environment-related requirements Cisco applies to its supply chain. GHG

emissions, water, waste, environmental pollution and public reporting requirements are described.

Our suppliers are essential partners as we work to improve environmental performance across our supply

chain. We hold our suppliers—and their suppliers—to the same high standards we practice through the

Supplier Code of Conduct and other responsible sourcing policies

. To follow through on our

commitments, we conduct due diligence with suppliers and address impacts to protect workers,

communities and the environment from harm. Through supplier engagement, we believe in building

foundations that can drive positive outcomes for people and ecosystems in our supply chain. Per

Table

14, we collaborate extensively with industry groups, peers, suppliers, and other stakeholders to advance

responsible, sustainable supply chains across our industry.

Table 14: Supply-chain, environment-focused organizations and initiatives

Organization Engagement areas

Alliance for Water Stewardship (AWS)

Cisco has adopted AWS International Water Stewardship Standard for evaluating

and driving water stewardship in the supply chain.

CDP (formerly Carbon Disclosure

Project)

Cisco participates in CDP’s disclosure system to report on our efforts and promote

public reporting within the supply chain.

Clean Electronics Production Network

We are a full member of CEPN, a multi-stakeholder network with the goal to

address workers’ exposure to toxic chemicals during electronics ma

nufacturing. We

work to develop tools for due diligence and identify best practices to be propagated

in the supply chain.

European Partnership for Responsible

Minerals (EPRM)

We are a member of EPRM, a multi-stakeholder partnership aimed at increasing

the availability of responsibly produced minerals through supporting mine sites,

supporting mid- and downstream companies, and strengthening linkages between

production and sourcing.

Institute of Public and Environmental

Affairs (IPE)

Cisco has an ongoing partnership with IPE to prevent, mitigate, and remediate

environmental risks with supplier sites in mainland China.

Responsible Business Alliance (RBA)

Cisco is an original founder and full member of the RBA. We collaborate with peers

at the RBA to propagate best practices across the industry and supply chain.

• RBA Chemical Management

Taskforce

We promote the adoption and dissemination of tools and resources to improve

chemical management practices and protect workers from exposure to

chemicals in

the electronics supply chain.

• RBA Environmental Sustainability

Working Group (ESWG)

We collaborate with peers at the RBA ESWG to develop tools and disseminate

resources to build more sustainable supply chains.

• RBA VAP Advisory Council

Cisco participates in RBA’s VAP Advisory Council which comprises of member

companies who advise RBA leadership regarding the VAP program.

Responsible Minerals Initiative (RMI) We actively participate and collaborate with peer companies at RMI to address

concerns and develop new solutions for responsibly sourcing minerals.

Cisco 2020 Environment Technical Review 25 feedback?

Supplier GHG emissions

Because Cisco has a fully outsourced supply chain, these emissions are captured in our Scope 3

Category 1 Purchased Goods and Services and Category 4 Upstream Transportation and Distribution

inventory. Cisco has committed to reduce supply-chain-related Scope 3 GHG emissions by 30 percent

absolute by FY30 (FY19 base year). To support Cisco in meeting this goal suppliers are expected to

report GHG emissions and energy consumption to CDP on an annual basis.

Our expectations for supplier reporting are:

1. Provide a complete and accurate inventory of corporate-wide Scope 1 and 2 GHG emissions

2. Make the response publicly available via the option provided by CDP

3. Obtain third-party assurance of reported GHG emissions

4. Set an absolute GHG emissions reduction goal and report annual progress against that goal

5. Request suppliers and business partners report to CDP using this same five-step process.

Progress by our suppliers towards meeting these expectations is provided in Appendix III – Supplier

environmental engagement and performance. Our active supplier GHG emission reduction goals are

shown in Table 10. Performance towards these GHG emissions goals is shown in Table 15 and Table 16

below.

Table 15: Suppliers with public absolute GHG reduction target

KPI FY19 FY20 Comments

Suppliers with a public absolute GHG reduction target

Goal: 80 percent of Cisco component, manufacturing, and

logistics suppliers by spend will have a public, absolute

GHG emissions reduction target by FY25.

23% 33%

Table 16: Supply-chain-related Scope 3 GHG emissions and reduction goal

KPI FY19 FY20 Comments

Supply chain GHG emissions: Scope 3, metric tonne

1,845,000

Percent progress toward goal.

Goal: Reduce Cisco supply chain-

related Scope 3 GHG

emissions by 30 percent absolute by FY30 (FY19 base

year).

baseline *

Due to the nature of Scope 3 targets and how emissions are calculated, we have established a standard process to govern any

future required adjustments, e.g., due to the availability of new data or improved methodology. While we do not expect any such

changes to impact these figures more than 1%, any increase or decrease exceeding this threshold would cause a restatement of

the baseline.

* Due to the lag between when emissions occur at our suppliers and when they are reported to Cisco through CDP, we will be

reporting our FY19 baseline in this report. Progress against this goal will not be available until our 2021 CSR report.

Supplier 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. Cisco has committed that 70 percent of Cisco

component and manufacturing suppliers by spend will achieve a zero-waste diversion rate at one or more

sites by FY25. To support Cisco in meeting this goal, first-tier manufacturing suppliers are expected to

monitor and collect waste diversion data. These requirements include:

• Reporting facility-level data to Cisco as requested

• Striving to achieve a zero-waste diversion rate across each site

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

Cisco 2020 Environment Technical Review 26 feedback?

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 plan to kick off similar

initiatives at manufacturing partner sites in Mexico and Malaysia in the first half of FY21.

Table 17: Performance toward supplier zero waste goal

KPI FY19

baseline

FY20 Comments

Suppliers achieving a zero waste diversion metric at one

site.

Goal: 70 percent of Cisco component and manufacturing

suppliers by spend will achieve a zero waste diversion rate

at one or more sites by FY25.

21% 23%

According to current standard definitions used in certification protocols, “zero waste” diversion is defined as a 90 percent or

greater overall diversion of solid, nonhazardous wastes from landfill, incineration (waste-to-energy), and the environment.

Diversion methods can include reduction, reuse, recycling, and/or compost.

Information on solid waste in our operations (Cisco-owned or -leased facilities) is provided in the Solid

waste from operations (trash) section below.

Supplier water security

During FY20, 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 FY21. Our goal is to reduce

water-related risks to business and improve the health of water ecosystems long-term.

We also worked to broaden 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 supplier sites to complete the CDP water survey during FY20.

Environmental risk management in China

We have an ongoing partnership with 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 at IPE and were ranked 2nd in the IT industry for the Corporate

Information Transparency Index (CITI) at the end of FY20. See

Table 8 for 5 years of our CITI IT industry

ranking.

Some of the work we conduct leverages IPE’s Blue Map database which identifies existing and historical

environmental violations. We work closely with these suppliers to ensure that they remediate any

environmental issues and comply with the local environmental law. In addition, Cisco requires suppliers to

publish their corrective actions on the IPE website to improve environmental transparency, and get the

violations addressed and delisted within the required timeline. In FY20, 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 FY20,

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

became able to identify their suppliers’ environmental pollution violations and work with suppliers on

remediation. IPE recognized one of Cisco’s partners for their focused efforts to launch and scale the

program without prior experience. The supplier shared their positive experience of working with Cisco at

the IPE Annual Forum so peers, NGOs, government, and other stakeholders could learn from it. These

manufacturing partners regularly report to Cisco the environmental violations identified within their supply

Cisco 2020 Environment Technical Review 27 feedback?

chains, how they engage with their suppliers, and how many violations have been resolved. They receive

continued guidance from Cisco on driving successful pollution abatement programs.

Environmental reporting and transparency are critical to understanding the environmental impact of our

supply chain. This reporting includes making information publicly available on what chemicals are being

released to the air, water, and soil, and what pollutants are being transferred to another site for treatment

and disposal. Collecting this data also helps us identify environmental conservation initiatives and to set

supply chain goals for reducing pollution. To drive this work, Cisco encourages 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 FY20, 102 supplier sites completed

PRTR reporting compared to 60 in FY19. 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

FY20, Cisco organized virtual environmental training seminars with more than 219 attendees from 173

suppliers. The seminars included presentations and 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 mitigate and remediate

identified environmental issues and validate closure through IPE’s review processes.

Audits and self assessments

We have adopted the RBA’s industry standard accountability and assessment tools. These include Self-

Assessment Questionnaires (SAQs) and the Validated Assessment Program (VAP). SAQs engage

suppliers to assess their conformance to the RBA Code of Conduct and identify any gaps. Using RBA’s

industry-standard protocol reduces audit fatigue and makes clear the expectations suppliers should

perform to. Table 18 show SAQ coverage by supplier type.

Table 18: Self-assessment questionnaire coverage by supplier type

FY19 FY20

Manufacturing partners 100% 100%

Components suppliers (by

spend)

80% 80%

Logistics suppliers 100% 100%

Our comprehensive supplier auditing program helps suppliers build capability and improve their

performance. Third-party auditors trained and certified in social and environmental auditing and RBA’s

VAP protocols conduct audits on site. Auditors walk through production areas, dormitories, and canteens;

interview workers and management; and review policy and procedure documentation. More information

about VAP standard protocols can be found on the RBA website

Suppliers share their audit results with Cisco through the RBA-ONLINE platform. We require regular

audits of manufacturing partners every two years. And each year, we audit at least 25 percent of

component supplier facilities that are deemed high risk according to our risk assessment process.

Environmental responsibility is a key dimension of the Cisco Supplier Code of Conduct

. Cisco performs

audits on our high-risk suppliers through the RBA Validated Audit Protocol (VAP). Read more about our

audit processes and supplier audit results in the

ESG Hub. Environment specific audit nonconformances

are shown in Table 19.

Table 19: RBA audit nonconformances for FY20, Environment category

Total Component

Suppler

Total Contract

Manufacturer

Nonconformances

Identified as Priority

Nonconformances

Identified as Major

Nonconformances

Identified as Minor

Environmental permits and

reporting

6 1 0 7 0

Cisco 2020 Environment Technical Review 28 feedback?

Pollution prevention and

resource reduction

2 1 0 1 2

Hazardous substances 22 0 0 20 2

Solid waste 3 0 0 3 0

Air emissions 10 1 0 8 3

Materials restrictions 1 0 0 0 1

Water management 5 0 0 3 2

Energy consumption and

greenhouse gas emissions

9 0 0 3 6

There were no priority environment audit nonconformances in FY20. We worked with our suppliers to

close nonconformances according to RBA timelines and helped suppliers to improve environmental

management systems.

Energy and GHG emissions

We are making progress reducing our energy use and GHG emissions through energy efficiency

initiatives, investments in renewable energy, engagement with our supply chain partners, and

improvements to the efficiency of our products. All of these topics are described below.

Energy and GHG emissions goals

Our current energy and GHG emissions goals are summarized, along with other environmental goals, in

Table 10. Past goals are summarized in Appendix V.

We form our GHG emission reduction goals based on internal best practices and expert opinion, including

recommendations from the IPCC, SBTi, the U.S. EPA, the IEA, and The 3% Solution report

published by

the World Wildlife Fund (WWF) and CDP. Cisco has set science-based targets that exceed the rate of

decarbonization required to keep global average temperature increase below 2°C compared to pre-

industrial temperatures, as described in the Fifth Assessment Report of the IPCC. Our FY22 GHG

reduction goal of 60 percent (FY07 baseline) equates to a 4 percent reduction per year.

Cisco typically sets public goals in 5-yr increments that include appropriate funding and expected financial

return on investment. We also set internal annual targets that are reviewed on a quarterly basis to ensure

annual progress is made against our public goals.

Energy and Scope 1 and 2 GHG emissions

To achieve our Scope 1 and 2 GHG reduction and renewable energy goals, we will:

• Invest more than $45 million between FY18 and FY22 in energy efficiency and renewable energy

• Implement hundreds of energy efficiency and on-site renewable energy projects across our real estate

portfolio

• Increase renewable energy procurement through utility green power programs, power purchase

agreements (PPAs), and renewable energy certificates (RECs)

Reducing our energy consumption and GHG emissions while enabling a diverse energy supply for our

operations helps us stay competitive and benefits the environment. Our overall strategy to accomplish

these objectives is to:

• Use our real estate space more efficiently

The 3% Solution report is named for the annual emissions reduction thought to be needed through 2020 to meet IPCC guidance. According to the

IPCC Annex 1, developed countries need to reduce GHG emissions by 25 to 40 percent below 1990 levels by 2020, and by 80 to 95 percent below

1990 levels by 2050. Such a stabilization pathway was said to provide a “reasonable chance” of averting warming beyond 2°C above preindustrial

temperature.

Cisco 2020 Environment Technical Review 29 feedback?

• Increase the energy efficiency of our real estate operations

• Generate low-carbon electricity from on-site systems and purchase renewable energy

• Engage our stakeholders, including customers and employees, on our sustainability strategy

Our Scope 2 emissions result almost exclusively from electricity use and represent 94 percent of our

Scope 1 and 2 emissions. As a result, implementing projects to reduce our electricity use and increasing

our use of renewable electricity are major parts of our energy and GHG reduction strategy. In FY20, our

Scope 1 and 2 GHG emissions were 55 percent lower than our FY07 baseline on an absolute basis. See

Table 20 for details.

Table 20: Summary of Scope 1 and 2 GHG emissions

KPI

FY07

baseline

FY16

FY17

FY18

FY19

FY20

Comments

Total GHG emissions:

Scope 1, metric tonne

48,311 53,123 41,926 41,171 41,181 34,777

Total GHG emissions:

Scope 2 (location-based),

metric tonne CO

448,950 731,662 744,929 666,708 651,331 613,211

“Location-based” is used

consistent with GHG

Protocol and does not

include renewable energy

purchases.

Total GHG emissions:

Scope 2 (market-based),

metric tonne CO

402,422 247,933 223,558 205,141 187,428 167,381 “Market-based” is used

consistent with GHG

Protocol and includes

renewable energy

purchases.

Scope 1 and 2 emissions

(location-based) intensity,

metric tonne CO

e per

million dollars of revenue

14.2 15.9 16.0 14.4 13.3 13.1

Location-based intensity is

a measure of operational

efficiency commonly used

by many Cisco

stakeholders.

Scope 2 emissions from

primary data, percent

96.4% 98.1% 98.0% 98.2% 97.5% 97.7%

Total GHG emissions:

Scope 1 and 2 (market-

based), metric tonne CO

450,733 301,057 265,484 246,312 228,610 202,158

Percent progress against

FY22 reduction goal

Goal: Reduce total Cisco

Scope 1 and 2 GHG

emissions worldwide by 60

percent absolute by FY22

(FY07 baseline)

baseline -33.2% -41.1% -45.4% -49.3% -55.1% Results are based on

Scope 2 GHG Protocol

methodology released in

2015. Cisco’s current GHG

reduction goal was

announced in September

2017.

Our reporting policy for environmental metrics is to show the baseline year, data for the past five completed years, the goal, and

progress against the goal.

Scope 2 emissions for all years have been adjusted to reflect the GHG Protocol’s new Scope 2 guidance. This new guidance

was released in 2015 and had material impacts on Cisco’s current and Scope 2 figures calculated prior to 2015.

Cisco uses the GHG Protocol Corporate Accounting and Reporting Standard as the basis for our Scope 1

and 2 calculations. We report Scope 1 and 2 emissions based on operations over which we have

operational control. Calculations are based on site-specific data for fuel consumed and utilities

purchased, applying published emissions factors and global warming potentials (GWPs). See Table 21

for details.

Cisco 2020 Environment Technical Review 30 feedback?

Table 21: Electricity emissions factors

KPI

FY07

baseline

FY16

FY17

FY18

FY19

FY20

Comments

IEA world average emission

factor, g CO

e per kWh

507.1 536.0 506.0 491.8 487.5 480.9 Latest factors used for our

current FY20 report from IEA,

RE-DISS, and EPA GHG

Emissions Factors Hub. Prior

years used the latest factors

available at time of prior-year

reporting. See footnotes for

emission factor and GWP

sources.

Cisco global average electricity

emission factor (location-bas

ed),

g CO

e per kWh

437.9 448.2 447.1 407.9 404.7 394.8

Cisco major data center average

electricity emission factor

(location-based), g CO

e per

kWh

394.7 419.4 419.5 353.9 353.6 332.8

Cisco global average electricity

emission factor (market-based),

g CO

e per kWh

392.5 152.8 134.5 125.5 116.5 107.8

Our reporting policy for environmental metrics is to show the baseline year, data for the past five completed years, the goal, and

progress against the goal.

Cisco used emission factors from the following databases for its FY20 GHG inventory: 2020 IEA Electricity Information Database

2018 IEA factors, 2019 EU Residual Mix Factors from RE-DISS, Center for Corporate Climate Leadership GHG Emission

Factors Hub (modified March 9, 2020). 2020 country-specific emission factors for Australia, Brazil, Canada, India, and United

Kingdom provided from those countries’ governments. 100-year GWPs from IPCC Fourth Assessment Report (AR4), 2007.

The EPA Center for Corporate Climate Leadership provides additional program guidance. Of the seven

GHGs covered by the GHG Protocol (CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3), four (CO2, CH4,

N2O, and HFCs) are applicable to our operations. We do not have biogenic carbon emissions.

We report market- and location-based Scope 2 emissions in accordance with the GHG Protocol’s Scope

2 guidance. Each year, an independent third party provides a limited assurance review of our Scope 1

and 2 GHG inventory. This limited assurance review is provided in accordance with the ISO 14064-3

International Standard and is published as part of our CDP submittal. The assurance statement is

available for download here

Historical Scope 1 and 2 emissions data in Table 22 may vary from previous publicly reported values,

either in the most recent CDP survey or our previous CSR report. This is due to updated reporting

guidance, emissions factors, adjustments for acquisitions or divestitures, or correction of errors found

during review.

Table 22: Summary of Scope 1 and 2 energy usage

KPI

FY07

baseline

FY16

FY17

FY18

FY19

FY20

Comments

Energy generated, GWh 0 2.5 2.6 2.6 2.2 2.3 Cisco uses all the energy generated by its

onsite solar PV systems and does not sell

any energy.

Energy usage, GWh 1,239 1,850 1,831 1,815 1,788 1,701

Indirect energy usage, GWh 1,025 1,641 1,656 1,637 1.612 1.556

Electricity is the only indirect energy source

used by Cisco—we do not purchase any

heating, cooling, or steam.

Direct energy usage, GWh 213 209 176 178 177 146 Direct energy consumption is the sum of

Cisco’s natural gas, propane, and diesel

usage for heating and backup power

Cisco 2020 Environment Technical Review 31 feedback?

generation and regular gasoline and diesel

fuel used in Cisco’s fleet.

Electricity usage, GWh 1,025 1,641 1,656 1,637 1,612 1,556

Natural gas usage, GWh 135 94 90 90 93 79

Stationary diesel usage,

GWh

18 33 15 21 20 19

Stationary diesel is typically used for backup

power generation.

Propane usage, GWh 0.8 0.2 2 2 2 0.8

Transportation fuel usage

(combined gasoline and

diesel fuel), GWh

59 73 68 65 62 46.3

Transportation fuel includes regular gasoline

and diesel fuel used in Cisco’s fleet.

Energy use per unit of

revenue, GWh of energy

consumed per billion dollars

in revenue

35.5 37.6 37.2 36.8 34.5 34.5

The Cisco workplace

We continue to optimize our real estate portfolio while reducing energy use and GHG emissions. Our

solutions integrate leadership engagement, change management, design, procurement, policy, and

technology to transform the workplace experience. For example, our activity-based workspaces can

accommodate more employees than a traditional office layout, substantially reducing space and land

requirements and associated environmental impacts.

New buildings and renovation projects include energy efficiency requirements such as standards for LED

lighting and efficient air conditioning. We have changed our workplace occupancy model from individual

to group assignment, giving our employees flexibility and choice while increasing the utilization of our

assets. In addition, with our flexible work policy and mobile technology solutions, employees can work

from any Cisco office, as well as from home, a customer site, or even a coffee shop.

Energy efficiency in our buildings, labs, and data centers

Our Global Energy Management and Sustainability (GEMS) team leads all energy and sustainability

initiatives across our 19 million square feet of global real estate. The team currently manages the $45

million, five-year global EnergyOps program. EnergyOps aims to implement hundreds of efficiency and

renewable energy projects every year through FY22. The GEMS team includes Cisco employees and

contracted energy managers who have the following primary responsibilities:

• Managing Cisco’s global annual utility budget and contracts

• Identifying and implementing demand- and supply-side energy solutions, such as energy efficiency

upgrades and on-site renewable energy projects

• Embedding sustainability and efficiency criteria into our building, lab, and data center design standards

• Exploring and evaluating options for higher efficiency in all of Cisco’s real estate projects

• Engaging employees to participate in resource conservation

In FY20, the GEMS team enabled Cisco to avoid approximately 19.3 GWh of energy consumption and

8,600 metric tonne CO

e by investing $8.7 million to implement 44 energy efficiency projects. This does

not include our renewable energy purchases or on-site renewable energy generation. We estimate that

the over 440 energy efficiency and on-site renewable energy projects we have implemented since FY16

have avoided approximately 142 GWh of energy and 62,000 metric tonne CO

e. This program has also

allowed us to make our operations more efficient and increase the amount of renewable electricity we

buy, directly contributing to the achievement of the FY17 sustainability goals and the creation of our FY22

goals.

Table 23 shows the energy savings associated with the GHG reduction projects we implemented

between FY16 and FY20. Projects the GEMS team implemented globally in FY20 include:

Cisco 2020 Environment Technical Review 32 feedback?

• Updating lighting controls and using LED technologies to increase lighting efficiency

• Installing and upgrading waterside economization technologies to improve free cooling utilization

• Balancing airflow and improving hot and cold aisle containment within our labs

• Recommissioning and optimizing major mechanical equipment and control systems to improve energy

efficiency of our heating and cooling systems

• Participating in emergency energy demand response programs in both Texas and California

• Continuing an employee engagement campaign to promote, educate, and incentivize employees to

conserve energy

Table 23: Energy and GHG emissions reduction projects

KPI FY16 FY17 FY18 FY19 FY20

Number of projects implemented 103 103 145 48 44

Annual energy avoided, GWh/yr 31.2 40.1 32.4 19.4 19.3

Total estimated annual CO

e savings, metric tonne

e /yr

12,400 23,600 10,300 7,100 8,550

Does not include renewable energy purchases

Labs and data centers

Approximately 80 percent of our operational electricity is used to power and cool equipment in our labs

and data centers. Increasing the energy efficiency of these spaces is our greatest opportunity to reduce

Cisco’s operational GHG emissions and energy costs. We can do this by focusing on efficiency in the

design of our labs and practicing smart approaches to utilization and power management.

Our Global Lab Specification includes efficiency standards for new, high-density labs and retrofits. Our

standards mandate airflow management in all new labs globally and recommend it for renovation

projects. EnergyOps projects, as well as projects initiated by lab managers, also help us improve existing

airflow management, ventilation, cooling, and other building infrastructure systems.

To reduce electricity usage in our labs and data centers, we use smart power distribution units to monitor

our lab equipment. We increase server utilization by using virtual machines. Our Cisco Customer

Experience labs use a check-in, check-out system of automation pods to allow lab employees to set up

configurations virtually and then release equipment when they are finished with it. This system maximizes

the number of people who can use the equipment, minimizes the amount of equipment physically needed

in each lab, and reduces the amount of energy used collectively by our labs. When a lab team moves to a

different lab, users remove unused or old equipment, thereby saving space, power, and cooling.

Our data center efficiency strategy focuses on design, utilization, and power management. Our data

centers in RTP, North Carolina, and Allen, Texas, were designed to achieve a power usage effectiveness

(PUE) of 1.41 and 1.35 at full load, respectively. Both centers have achieved Leadership in Energy and

Environmental Design (LEED) New Construction (NC) Gold Certification (v2.2) from the U.S. Green

Building Council for incorporating numerous sustainable design features. Examples of efficiency retrofits

we completed in our labs and data centers over the last several years include:

• Balancing airflow and improving hot and cold aisle containment

• Replacing electric-resistance heaters with more efficient heat pumps in our backup generators

• Retrofitting existing Computer Room Air Handling units with EC fans to allow more efficient variable fan

speed

• Installing mixed-mode waterside economizers to allow greater utilization of free cooling throughout the

year

We have also increased efficiency by migrating IT loads into key locations. By consolidating our footprint,

we’ve reduced our square footage costs and our overall electricity use. Since July 2013, we have reduced

data center square footage by over 25 percent.

Cisco 2020 Environment Technical Review 33 feedback?

GHG emissions from outsourced IT

Refer to a later section, Scope 3 category 1: purchased goods and services, for a discussion of

outsourced IT GHG emissions.

Green building standards

We have integrated green building standards into our real estate since our first LEED-certified building

was built in 2009. By the end of FY20, 18 Cisco facilities were LEED-certified, with 13 rated Gold or

Platinum. These facilities represent over 2.5 million square feet of LEED-certified space, which is about

13 percent of Cisco’s global real estate portfolio.

We also incorporate principles of green building standards into our standard workplace design, even if

we’re not planning for LEED certification. These standards make our spaces more comfortable for our

occupants while reducing our buildings’ environmental impact.

Renewable energy

Generating and purchasing low-carbon electricity is a key component of our GHG reduction strategy. We

prefer on-site power projects where possible, but off-site power is often the better option due to factors

such as location, budget, and space constraints. While we do use unbundled renewable energy

certificates (RECs) today to help meet our renewable energy goal, we continue to engage utilities and

renewable energy providers to expand both our on-site and off-site renewable energy activities so we can

help support the development of new renewable energy systems in locations where we operate. We

identify and evaluate potential projects in the following order:

1. On-site power opportunities

2. Green power contracts with utilities

3. Off-site power opportunities

4. RECs

Onsite renewable power

We have 2.9 MW of onsite solar PV installations in Texas, Massachusetts, North Carolina and India that

produce an average 3.2 million kWh of electricity, avoiding 1,200 metric tonne CO

e each year over the

projected 25-year life of the systems. We continue to look for new onsite renewable opportunities and are

currently planning to add two new onsite solar projects in Raleigh, NC and India over the next 12 months.

Purchasing renewable electricity

Purchasing electricity generated from renewable or other low-carbon sources is a key component of our

GHG reduction strategy. We summarize our global renewable electricity purchases in Table 24. We have

purchased renewable electricity in the U.S. and Europe since FY06 by buying RECs and entering into

green power contracts with various electricity suppliers.

We are actively exploring how to increase the percentage of renewable energy obtained from utility

contracts and PPAs. We engage with green power providers and buyers through the Renewable Energy

Buyers Alliance (REBA) and also participate in the EPA's Green Power Partnership

, where we are

consistently ranked highly in their Green Power Top Partner Rankings.

In April 2020, Cisco completed a 10 MW virtual PPA to purchase power from the Mesquite Star wind

farm, a 419-megawatt (MW) wind farm in Texas. Cisco’s portion of the project provides approximately 40

percent of the electricity we use annually at our data centers in Richardson and Allen, Texas. See blog

for

details.

We have expanded our renewable electricity purchases in India to include both long-term by buying

RECs and entering into green power contracts with various electricity suppliers. In 2018, Cisco signed

two solar power purchase agreements (PPAs) that will collectively deliver 85,000 megawatt-hours of

clean, renewable electricity every year to the local electric grid where our Bangalore campus is located.

These agreements provide nearly 40% of the electricity we need to power our Bangalore campus. For

more information, read our blog

on the project.

Cisco 2020 Environment Technical Review 34 feedback?

Other renewable energy accomplishments in FY20 include:

• Purchased 100 percent of the electricity used at Cisco facilities in the U.S., Belgium, Denmark, France,

Germany, Ireland, Italy, Switzerland, and the United Kingdom from renewable sources.

• Partnered with multiple companies to sign a 10 MW virtual PPA from a large wind farm in Texas.

Construction began in May 2019 and we started receiving power from the system in April 2020. See the

blog

for details.

• Continued participation in Duke Energy’s Green Rider program to purchase about 10 percent of the

electricity used at our RTP campus from 10 MW of solar projects located in North Carolina

• Continued participation in Austin Energy’s Green Choice program to purchase 100 percent of the

electricity used at our facilities in Austin, Texas, from local wind power systems

Table 24: Electricity from low-carbon sources (renewables)

KPI

FY07

baseline

FY15

FY16

FY17

FY18

FY19

FY20

Electricity from renewable sources, GWh 110 1,167 1,264 1,324 1,344 1,344 1,292

Percent progress against renewable energy goal

Goal: Use electricity generated from renewable

sources for 85 percent of our global electricity by

FY22

11% 71% 77% 80% 82% 83% 83%

Electricity usage from renewable sources by region:

EMEAR (Europe, Middle East, Africa, and

Russia)

31% 48% 44% 49% 62% 65% 63%

India 0% 2% 33% 45% 49% 52% 60%

United States 10% 97% 100% 100% 100% 100% 100%

Scope 3 GHG emissions

Cisco measures our environmental footprint across our supply chain to prioritize areas for improvement.

Scope 3 emissions cover a broad range of activities across Cisco’s supply chain, operations, products,

and solutions. Below we discuss the most significant areas of impact. For a complete table of our Scope 3

emissions as reported to CDP, see Appendix IV

. Additional Scope 3 emissions information is available in

our response to CDP Question 6.5 of our 2020 CDP Investor Survey response.

Scope 3 reduction strategy

Our Scope 3 focus areas are reducing emissions related to product energy use and in our supply chain

operations by:

• Increasing product power efficiency through continual engineering improvements

• Integrating carbon accounting metrics into our supply chain operations to optimize transport and

materials in the manufacturing of our products, and increase energy efficiency in our extended

operations

• Collaborating with manufacturing, component, and logistics suppliers to manage and report GHG

reduction targets, influencing improvements in performance year over year (see Supplier environmental

performance section for more details)

Scope 3 supply chain operations

Cisco and the broader electronics industry rely on suppliers worldwide to provide components, assemble,

test, and ultimately ship products to our end customers. As a result, supply chain emissions make up a

significant proportion of Cisco's GHG footprint. To help us understand critical impacts in our supply chain,

we use recognized global frameworks and industry standards for accountability and reporting.

Cisco 2020 Environment Technical Review 35 feedback?

As a member of the CDP Supply Chain Program, we request that all of our direct suppliers—with whom

we have a significant business relationship—report their carbon impacts to CDP. Table 52 in Appendix III

provides the percent of our manufacturing, component, and logistics suppliers, by spend, that report their

Scope 1 and Scope 2 GHG emissions to CDP. Furthermore, Scope 3 category 1 and category 4 GHG

emissions are included in the boundary for our Supply Chain related Scope 3 absolute GHG emissions

goal.

Scope 3 category 1: purchased goods and services

This Scope 3 category is included in our supply chain absolute reduction goal. The boundary incorporates

the allocated GHG emissions of our Tier 1 and Tier 2 manufacturing, component and warehouse

suppliers. Emissions are allocated based on Cisco’s financial share of the supplier’s reported global

Scope 1 and Scope 2 GHG emissions. The majority of emissions are related to the electricity

consumption used to manufacture sub-components and complete final testing for our products.

To reduce Scope 3 category 1 emissions, we have set an absolute GHG reduction goal for our supply

chain as shown in Table 25.

Table 25: Supplier adoption of absolute GHG reduction goals

Supply chain GHG emissions FY19 FY20

Suppliers, by spend, with a public, absolute GHG reduction

target

Goal: 80 percent of Cisco component, manufacturing, and

logistics suppliers by spend will have a public, absolute GHG

emissions reduction target by FY25.

23% 33%

* Preferably in line with an approved science-based methodology (applying either a 1.5°C or well below 2°C reduction scenario).

Includes suppliers that set intensity targets that produce an absolute emissions reduction during the target period.

GHG emissions from outsourced IT – DCaaS, IaaS, SaaS and PaaS

IT services come in several forms: on premise, co-located data center as a service (DCaaS),

infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). As part

of our annual GHG emissions reporting, we calculate the on-premise emissions of Cisco-managed data

centers. However, we are shifting more IT services into co-located data center facilities or the cloud (as-a-

service providers). In 2019, our Chief Information Officer confirmed this shift to outsourced IT. As part of

this transition to cloud resources, Cisco is targeting a 30 percent reduction in the number of Cisco on-

premise data centers within the next five years. When IT services move from on-premise to co-located

DCaaS facilities and remain in our operational control, the GHG emissions accounting remain in our

Scope 2. When IT services move from on-premise facilities to the cloud, operational control is

relinquished and GHG emissions accounting shifts, from our Scope 2 to Scope 3 (IaaS, SaaS and PaaS).

This year is the first year we calculated our GHG emissions from these types of outsourced IT. Due to

data availability these estimates were calculated for FY19. The methodology for calculating DCaaS GHG

emissions can be straight forward. Where possible, we used publicly reported revenue, GHG emissions

reported to CDP and our spend with each partner to estimate our portion of emissions. In the cases

where annual revenue and carbon emissions information was not available, we used a carbon intensity

average and our spend with the provider to estimate our portion of emissions.

We classify our use of IaaS, PaaS and SaaS products as purchased goods and services (Scope 3). We

have estimated our GHG emissions for our use of IaaS and PaaS services using the Greenhouse Gas

Protocol guidance for calculating Scope 3 emissions (version 1.0). For our IaaS calculation, we used

facility-level data provided by our partners. If this wasn’t available, we allocated our portion of our

partner’s scope 2 emissions. To do this calculation, we used publicly reported revenue, GHG emissions

reported to CDP and our spend with each partner.

There is difficulty aligning these 3 sources as they all cover a slightly different time period, but we believe

that we are in the correct order of magnitude. Our emissions for DCaaS, IaaS and PaaS can be found in

Table 26.

Cisco 2020 Environment Technical Review 36 feedback?

Table 26: GHG emissions from outsourced IT services (IaaS, SaaS, PaaS).

KPI FY19 FY20 Comments

Scope 2 GHG emissions from outsourced IT - DCaaS

(Location-Based), metric tonne CO

8,690 TBD

Scope 3 GHG emissions from outsourced IT – IaaS

and PaaS (Market-Based), metric tonne CO

5,935 TBD

SaaS is not included in our FY19 estimate

FY20 emissions calculation is dependent on receipt FY20 CDP supply chain data and will be reported when data is available.

Scope 3 category 4: upstream transportation and distribution

This Scope 3 category is included in our supply chain absolute reduction goal. The boundary incorporates

the GHG emissions from transportation and distribution services directly purchased by Cisco over the

reporting year. The majority of emissions are related to the air transportation used to deliver products and

services within our manufacturing and distribution networks.

Downstream transportation emissions, paid by Cisco, are included in Category 4 Upstream

Transportation and Distribution (in accordance with the GHG Protocol).

Scope 3 category 6: business travel

Cisco closed its last travel goal in 2017. Our two travel goals are listed in Appendix V. We continue to

report travel emissions as part of our Scope 3 CDP reporting, summarized in Appendix IV – FY20 Scope

3 emissions. Due to the impacts of COVID-19 on corporate travel our scope 3 business travel emissions

are approximately 40 percent less than we would have expected during a normal year.

Scope 3 category 7: employee commuting

Cisco used our latest employee commuting survey completed in FY18 to estimate the emissions

produced from employees commuting to work in FY20. Our Scope 3 emissions from employee

commuting decreased significantly from FY19 to FY20 due to our mandatory work from home policy

during the COVID-19 pandemic. Table 27 summarizes our associated Scope 3 commuting emissions.

Table 27: Scope 3 emissions from employee commuting

KPI FY16 FY17 FY18 FY19 FY20 Comments

Scope 3 GHG emissions from employee

commuting, metric tonne CO

91,586 80,506 81,394 79,735 47,973

Our FY18, FY19 figures were

externally verified

. FY20 data is

not being verified due to the

impacts from COVID-19

pandemic.

Flexible work practices

In addition to the collaboration tools we make widely available to our employees, several Cisco network

technologies also permit flexible working environments (for example, working from home or remotely).

These include Cisco Virtual Office and Cisco OfficeExtend. Cisco Virtual Office provides wired and

wireless voice, data, and video service for an employee’s home or for small commercial offices, using

Cisco integrated services routers (ISRs) and IP phones. Cisco OfficeExtend is an even simpler solution.

It’s a remote wireless access point in the employee’s home that provides the same highly secure

communications to a wireless local area network (WLAN) controller at the connected Cisco campus.

Many employees also use Cisco’s AnyConnect Secure Mobility Client to connect to our enterprise

network, enabling them to work from any device, at any time, in any location. Although working remotely

does not directly reduce air travel, it helps our employees become more proficient in using collaborative

technologies, which is especially important for a global technology company.

Cisco 2020 Environment Technical Review 37 feedback?

Transportation services

We provide a variety of transportation services to our employees to help them commute, move around

our campus locations and adjoining communities, and maintain their vehicles. Cisco also maintains over

500 ports available for employees and guests at our headquarters in San Jose. Globally, Cisco has over

380 stations with more than 680 charging ports (Table 28).

Table 28: Cisco locations with EV charging

United States Outside the United States

Irvine, California

Pleasanton, California

Rancho Cordova, California

San Francisco, California

San Jose, California

Lawrenceville, Georgia

Fulton, Maryland

Boxborough, Massachusetts

Research Triangle Park, North Carolina

Malvern, Pennsylvania

Richardson, Texas

San Antonio, Texas

Salzburg, Austria

Vienna, Austria

Diegem, Belgium

Ottawa, Canada

Toronto, Canada

Hangzhou, China

Hefei, China

Suzhou, China

San Jose, Costa Rica

Prague, Czech Republic

Espoo, Finland

Paris, France

Lyon, France

Berlin, Germany

Budapest, Hungary

Bangalore, India

Rome, Italy

Vimercate, Italy

Lysaker, Norway

Krakow, Poland

Bucharest, Romania

Madrid, Spain

Stockholm, Sweden

Bedfont Lakes, United Kingdom

Chandlers Ford, United Kingdom

Green Park, United Kingdom

Cisco includes the electricity used to charge employee EVs in our Scope 2 emissions reported as shown

in Table 22.

Cisco also maintains a fleet of company cars for our employees in Europe and has been working to

reduce the GHG emissions associated with this fleet over the last five years (Table 29). We have set a

limit on the allowable CO2 emissions of newly purchased vehicles and promote EVs when possible. The

current limit we set is 151 g/km for diesel cars, and 160 g/km for gasoline cars (WLTP). We expect to

further reduce these limits over time, as the automobile industry continues to release more fuel-efficient

and less polluting vehicles, as well as an increased number of full electric vehicles.

Table 29: Percentage EVs in Cisco company cars

Year FY16 FY17 FY18 FY19 FY20

Total fleet size 6,100 5,950 5,440 4,772 4,620

Number of electric vehicles 334 420 469 540 773

Percentage of electric vehicles 5.5% 7.1% 8.6% 11.3% 15.7%

Cisco 2020 Environment Technical Review 38 feedback?

Scope 3 category 11: use of sold products (product energy efficiency)

Cisco calculates our Scope 3 use of sold products GHG emissions based on the Greenhouse Gas

Protocol guidance for calculating Scope 3 emissions (version 1.0). Our use of sold products are classified

as direct use-phase emissions as our products directly consume energy during their use. We use

equation 1 to estimate the total CO

e from the use of our sold products. Because our products have

varying expected lifetimes, we assume a conservative average of 5 years. In actuality, it could be

anywhere from 2-15 years depending on the product type. To account for the previous 4 years of product

energy consumption, we include those previous yearly estimates in our current yearly estimate.

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Table 30 provides the GHG emissions from the use of sold products. Electricity and GHG emissions

decreased in FY20 due to manufacturing restrictions due to COVID-19. About 80 percent of these

emissions were calculated using primary data.

Table 30: Total estimated electricity and GHG emissions from use of sold products.

KPI

FY17

FY18

FY19

FY20

Electricity from use of sold products, TWh 49.8 49.2 49.0 46.4

Scope 3 GHG emissions from use of sold

products metric tonne CO

26,423,996 25,653,819 24,929,174 23,271,302

To better calculate this number, we are creating a database to track our product energy consumption. Our

goal is to automate this process to allow for easier energy use calculations and more consistent data year

over year. By the end of FY21, we plan to have our initial database ready to help calculate our GHG

emissions from use of sold products.

We estimate that Cisco is responsible for around 6% of the electricity consumed by the Information and

Communications Technology (ICT) sector. This estimate is based on research published in 2018 by Jens

Malmodin and Dag Lunden which estimated that in 2015 the ICT sector consumed 805 TWh.

This same

study also found that electricity consumption by the ICT industry has not grown exponentially as once

predicted, but has remained roughly flat due to continued focus on product energy efficiency. This finding

was supported by further research finding that global data center usage only grew from about 194 TWh in

2010 to 205 TWh in 2018.

This assumption allows us to derive our estimate of 6% by assuming the ICT

sector still consumes roughly 805 TWh.

Table 31: Cisco product categories by power consumption and product revenue

Year % Total power % Total product revenue

Infrastructure 92.2% 75.4%

Applications 6.3% 15.9%

Security 1.5% 8.8%

Other products 0% 0.4%

Stakeholder engagement and standards development

Cisco engages with governments, regulatory agencies, and standards development organizations to

monitor and influence the development of emerging product energy efficiency requirements and

standards. Product energy efficiency standards can promote innovation by being performance-based, by

taking into account product functionality, and by relying on objective criteria, real-world data, and system-

level efficiency. Predictable requirements enable companies to focus on the environmental issues most

relevant to them.

J. Malmodin and D. Lunden. “The Energy and Carbon Footprint of the Global ICT and E&M Sectors 2010–2015” (2018)

E. Masanet, A. Shehabi, N. Lei, S. Smith, J. Koomey. “Recalibrating global data center energy-use estimates” (Science Magazine, 2020)

Cisco 2020 Environment Technical Review 39 feedback?

Many eco-design standards and regulations generally apply to a single point of energy conversion in the

power supply at the front end of the total system. Cisco supports the idea of studying energy consumption

more broadly. This systems approach should result in a fair and correct way to promote energy

efficiencies in tomorrow’s networks. One standard that embodies this approach is the Alliance for

Telecommunications Industry Solutions (ATIS) Telecommunications Energy Efficiency Ratio (TEER). This

measurement method covers all power conversion and power distribution from the front end of the

system to the data wire plug, including application-specific integrated circuits (ASICs).

The ATIS TEER standards created a framework for measuring product energy usage that takes product

functionality into account. They use real-world loads to determine energy efficiency across the entire

product. This is important because it allows companies like Cisco to compare energy-usage design

improvements from one product generation to the next, and it helps consumers make better-informed

purchasing decisions. The ATIS TEER standards have been incorporated into the Network Equipment

Building System (NEBS) design guidelines applied to telecommunications equipment in the U.S. NEBS is

the most common set of safety, spatial, and environmental design guidelines applied to

telecommunications equipment. Compliance with these guidelines is an industry (but not a legal)

requirement. Table 32 lists organizations Cisco works with on energy efficiency.

Table 32: Energy efficiency initiatives and organizations with whom Cisco actively engages

Organization Engagement Areas

Alliance for Telecommunications

Industry Solutions (ATIS)

Cisco is an active member of ATIS and engages with other member organizations

to develop standards relevant to the telecommunications industry. Last year, we

submitted a draft to update ATIS-0600015 (Servers and server blades) and bring

the IT in line with other energy efficiency standards

European Commission Joint Research

Center, Codes of Conduct

Cisco is a signatory and active member of the EU Code of Conduct on Energy

Consumption of Broadband Communication Equipment.

Aspirational goals are provided to reduce energy consumption of broadband

communication equipment without hampering fast-

technological developments and

service provided.

Electronic Product Environmental

Assessment Tool—EPEAT

Cisco has engaged with IEEE and NSF International in the development of server

standards for energy efficiency. Cisco is an advisory committee team member and

active member of the EPEAT program for servers and is contributing to both the

Common Criteria (NSF 487) and Sustainable Network Equipment specifications.

European Telecommunications

Standards Institute (ETSI)

Cisco is engaged with ETSI in the development of standards for energy efficiency.

We lead the ETSI server standard EN303470, which defines the active efficiency

metrics and idle measurements for 2- and 4-socket servers and where high

temperature testing are being defined.

Cisco also leads DEN/EE-EEPS47-2 on the verification of compliance with the

requirement on the secure data deletion functionality, including instructions on how

to use the functionality, the techniques used and the supported secure data

deletion standard(s).

International Telecommunication Union

(ITU) (worldwide)

Cisco is a contributor to the ITU-T SG5 Study Group while holding a Vice-

chairman

position on the management team.

U.S. Department of Energy (DOE),

Environmental Protection Agency

(EPA)

Cisco has been working with the EPA to define ENERGY STAR standards for

networking equipment: SNE, LNE, telephony equipment, and servers. Cisco has

also worked with Lawrence Berkeley National Laboratory, the EPA/DOE technical

arm; Navigant; the National Resources Defense Council (NRDC); and Ecova on

measurement methodologies and metrics. Cisco most recently provided feedback

expand the product scope for the LNE specification.

Improving product energy efficiency

Improving product energy efficiency addresses two key challenges for Cisco. First, to achieve the

projected product performance specifications for the next five to ten years, Cisco products need an

architecture with “energy scalability”. This is one that can provide energy-efficient service for variable

traffic types, traffic demands, customer usage, and installs. Second, product use is our largest, Scope 3

Cisco 2020 Environment Technical Review 40 feedback?

GHG emissions source. To address these challenges, Cisco is investing in five primary product energy

efficiency engineering initiatives. These initiatives were chosen because they enable the largest impact

on improving our products’ energy consumption.

• Power initiative: We are improving the efficiency of our products from plug to port and set a product

power efficiency goal in early FY18. This goal is to improve large rack-mounted- equipment system

power efficiency—as measured from the input power from the facility to the board-mounted ASICs,

memory, and other chip devices—from 77 percent to 87 percent by FY22 (FY16 baseline). Read more

about this goal in our goal announcement blog post. Progress toward this goal is shown in Table 33

. To

achieve this power efficiency goal we are reducing resistance – the hindrance of the flow of electrons –

in our Printed Circuit Boards (PCBs) and other components through the use of better conductive

materials. By reducing the overall resistance, we can decrease the energy lost as heat, increasing the

overall system level efficiency and reducing the amount of heat that needs to be exhausted from the

system.

• Thermal initiative: Commonly used forced air-cooling systems have limitations in cooling higher

powered next-generation products. As such, we are exploring alternative methods of cooling such as

liquid or refrigerant cooling, which will reduce power used by the products dedicated to cooling.

Currently, liquid and refrigerant cooling is technically feasible, but implementation is dependent on

customers upgrading their facilities to integrate properly with these cooling methods. Where appropriate

we advocate for the use of liquid or refrigerant cooling, but until these methods are more widely

adopted, we continue to develop advanced thermal techniques and optimize traditional forced air

cooling to remove heat from our products.

• High-speed interconnects and ASIC initiatives: High-speed silicon-to-silicon or optics-to-silicon

interconnects are an integral part of routing and switching systems. As throughput (or bandwidth)

requirements increase, the interconnects can consume a significant portion of the total system power.

Through advancements in optics, we can deliver increased bandwidth using the same or less power

compared with earlier generation interconnects. Previous generation ASIC packet processing

technology designs consumed large amounts of power. The Cisco Silicon One ASIC architecture, a

complete redesign, has allowed the ASIC to be twice as efficient than previous ASIC technologies while

enabling a move from Gbps to Tbps capacity with a single ASIC. For more information on how the

Silicon ONE is reducing energy, read our blog here

• Customer facilities initiative: We are working with customers to reduce the amount of energy required to

operate IT facilities with power solutions that increase the efficiency of overhead power, avoid step-

down transformers, and provide integrated cooling strategies. These end-to-end solutions reduce

hardware requirements and energy consumption while providing a more integrated method for

managing IT infrastructures. Our customers are constrained by the total amount of electricity that can

be delivered to a given data center. Because of this, every watt counts and delivering electricity to our

products in the most efficient way is becoming an even higher priority. Currently, data centers are using

208 or 239VAC or 48/60VDC inputs, while the most efficient input voltage is 277VAC or 380VDC. There

has been low adoption of the 380VDC input voltage due to concerns over safety. To alleviate these

safety concerns we are working with customers to design and implement fault managed power systems

which can be integrated into connected building applications and reduce the cost of building out of

future electrical infrastructure. To reduce energy consumption at facilities even more, we have proposed

an improved cooling system with a smart HVAC system. The paper can be found in Technical

Disclosure Commons here

• Power Supply Initiative: Power supplies play a critical role in managing product energy efficiencies, as

they are the first step where energy is lost. To overcome this loss, we are working to offer more energy-

efficient options for power supplies, giving customers the option of platinum or titanium 80+ rated power

supplies whenever possible. This provides cost-sensitive customers the option of selecting lower-rated

power supplies, such as gold or silver, while allowing customers concerned about reducing their total

energy use to select the higher-rated supplies. Over 50% of the new power supplies designs we

developed last year were tested for a rating of platinum and above. This initiative also includes

developing power supplies with wide-ranging AC and DC inputs that support AC/HVAC/HVDC for 200-

277VAC or 240/380VDC. These designs allow us to support both AC and DC with legacy low input AC

voltages or higher voltages that have higher efficiencies. Once customers begin to switch to 380VDC,

we will develop power supplies that are optimized for this input voltage. For external power supplies, we

ship products that are DOE6 compliant, aligning with the latest U.S. energy efficiency standards.

When we evaluate product energy efficiency, we consider the power performance of the entire system.

We measure the percent efficiency as electricity passes through each component or function. This can

Cisco 2020 Environment Technical Review 41 feedback?

include, for example, the external power supply units (PSU), intermediate bus converter (IBC), point of

load (POL), and ASIC, memory, or other chips.

Table 33: Product power efficiency improvements (large rack-mounted-equipment)

KPI FY16 FY17 FY18 FY19 FY20

System power efficiency (percent)

Goal: Improve large rack-mounted-equipment system

power efficiency—as measured from the input power from

the facility to the board-

mounted ASICs, memory and other

chip devices— from 77 to 87 percent by FY22 (FY16

baseline).

77%

baseline

80% 82% 85% 85%

Reducing product energy consumption

Increasing energy efficiency is key to Cisco’s strategy for managing the total amount of energy used by

our products, but it is only one part. Cisco produces a wide variety of products ranging in size from

access points (APs) to large networking equipment (LNE). This means we must take a multifaceted

approach to managing energy consumption.

Our products fall into three categories in which we report revenue: Infrastructure Platforms, Applications,

and Security. Each product segment requires a different approach. Switching, routing and optical

networking falls under the Infrastructure category and these products make up the backbone of the

network and consume the most energy. The total energy footprint of each of our products is determined

mainly by which components we use. As components, such as the ASICs, CPUs, PHYs, and DIMMs,

continue to consume more energy, our products will, too. To counter this energy increase, we’re utilizing

the below design techniques to reduce energy consumption.

• Reduced the process geometry of our ASICs which reduces the energy consumption and also allowed

us to combine multiple chips into one, improving energy efficiency even more.

• Utilize Automatic Voltage Scaling (AVS) which allows us to adjust the processor voltage and core

frequency, decreasing the energy consumption.

• Migrated from legacy synchronous DRAM and SRAM to DDR4 and Serdes based high density

memories like HMC and HMB and improving memory architecture with hybrid queuing and ingress VOQ

to improve energy consumption.

• Utilize fan speed controls that are based on component temperature and altitude as opposed to inlet-

based temperatures.

• Modules can be classified as normal or high power and depending on what is installed, the fans speeds

can be adjusted to fit the profile installed to save energy.

• Unused line cards or ports are powered-off to reduce energy consumption.

Our wireless portfolio, which includes APs, also falls under this segment. These products are primarily

powered through PoE, making energy consumption a high priority. Each product must fit into the desired

PoE standard, ranging from the 802.3af standard of max power at 15.4W to the 802.3bt max power rating

of 90W. Products are also designed with an option to reduce usage of certain features, such as link

speed, number of spatial streams available and USB availability to reduce power when these features

aren’t needed. Further design improvements include the following:

• Products are designed with Field-Effect Transistors (FETs) instead of diodes in our PoE system. This

can reduce the power draw and on an 802.3at powered device can save about 0.75W.

• Utilize automatic rate shifting for power savings through optimizing the amount of power internal buses

use when communicating between components.

Products falling under our IoT segment are essentially hardened versions of our switches, routers and

access points that are deployed in environmentally uncontrolled environments. They may be installed in

remote areas, with little power available so it’s essential that they’re designed to minimize energy

consumption and usage of high failure components such as fans. We released the IR1101, with a focus

on reducing energy consumption as a pilot and then utilizing these techniques on our next generation

Cisco 2020 Environment Technical Review 42 feedback?

hardened switches and APs whenever possible. These design improvements resulted in a 45% reduction

in power over the previous generation of router. Design improvements are listed below.

• Utilize front end power supplies that have an efficiency greater than 90%.

• Reduce the number of stages where voltage is reduced, improving system efficiency.

• Use a lower powered CPU at a reduced clock frequency.

• Reduce number of LEDs and the brightness for remaining ones to reduce energy consumption.

Compute products as a whole have continued to increase their energy use each year and our rack, blade

and node servers have followed this industry trend. The key drivers to this increase are processing

power, use of persistent memory, accelerators such as GPUs and FPGAs and denser packaging (e.g.

expanded storage and IO devices packaged into the same form factor. As the system power increases,

the servers also must use higher performing fans to support this increased power density trend.

Cisco’s compute products are Energy Star and EPEAT certified, and compliant with EU Directive

2019/424. The technology innovations that enable our compute products to comply with these standards

are:

• Architecture consolidation of data and management into a single fabric to reduce number of IO devices,

switches and redundant management components that consume energy.

• Dynamic power rebalancing between high and low customers to eliminate stranded power allocations to

improve efficiency of available power.

• Hardware layer is abstracted to enable policy-based management. This allows users to easily push

BIOS policies optimized for energy efficiency to their entire install base regardless of form factor,

version or processor architecture.

• Optimized fan design with policies biased towards low power operation and a use of a variable fan

speed algorithm which includes component temperature and power consumption to optimize fan speed

selection. This eliminates unnecessary overcooling and wasted fan power.

Our collaboration portfolio is made up primarily of our IP Phones, headset and telepresence products.

Like APs, IP Phones can spend an even greater amount of their lifetime not in use. It’s critical for these

products to be designed to efficiently power up for use, then switch into a standby mode to minimize their

energy footprint. It is also a priority for our IP Phones to be designed to meet ENERGY STAR standards.

Our headsets allow customers to integrate with our collaboration applications, while providing energy

efficient features such as battery management and Bluetooth-power optimization reducing energy

consumption and ultimately, providing longer call times between charges. With each new generation of IP

Phone and headset, we’re also improving the design with the following:

• Integrating the latest, most efficient silicon with our audio processing and call-control software

• Developing intelligent power-management features that selectively enable power to only those functions

needed for each use case.

• Adopting the latest Bluetooth/Wi-Fi standards that transmit only as much antenna power as needed to

maintain a stable wireless link.

Telepresence products help customers reduce their GHG emissions from business air travel and

commuting. When designing these products, we prioritize efficient switching between product use and

standby modes. Future generations will also support three modes to minimize energy consumption: off,

standby, and networked standby. Products can then be set to transition to either of the two standby

modes if no input signals are detected for a predetermined time. Each generation of video endpoints is

capable of supporting more features such as higher screen resolution, increased camera/video resolution

and transmission rates and various sensors. While the newer generation products may use more power,

we are improving the energy efficiency by using the latest ASIC, display and monitor technology.

Our security portfolio is made up of physical and cloud-based product offerings. Similar to our

infrastructure platforms, energy consumption is determined by component selection. Each generation of

products uses more energy, but bps/W ratios are also increasing. This offsets the additional energy

increase.

Cisco 2020 Environment Technical Review 43 feedback?

Scope 3 category 12: end-of-use treatment of sold products (end-of-life)

This Scope 3 category is not included in our supply chain absolute reduction goal. The boundary

incorporates the allocated Scope 1 and Scope 2 GHG emissions of our Tier 1 recycling partners. We do

not include embedded emissions related to reuse or recycling of Cisco products. Further details can be

found in the Product end-of-use section of this document.

IT solutions for the environment

We are making progress in managing GHG emissions in our own operations, in our supply chain, and at

other phases of the product life cycle. Our products and services also offer opportunities through the

“enabling effect.”

The enabling effect happens when technology helps lower emissions in other industries. For example,

high-definition videoconferencing can be used in place of face-to-face interaction to avoid air travel.

Energy monitoring and control of IP-enabled devices can reduce buildings’ energy consumption.

Cisco sponsored and contributed to the first SMART 2020 report in 2009. The report identified

opportunities for the ICT sector to develop and apply network technologies to reduce total GHG

emissions by 15 percent. The report continues to be a seminal work and guides industry strategy.

Considering the ICT sector was projected to be responsible for only 3 percent of global emissions in

2020, this represents a substantial positive impact. Potential reductions are concentrated in the areas of

transportation, buildings, power/energy, and industry.

Reducing GHG emissions from business air travel and teleworking

Remote collaboration technologies (Table 34) help Cisco and our clients reduce emissions from air travel

and commuting. These technologies include Webex Teams®, Cisco TelePresence®, Cisco Webex®,

Cisco Unified Communications, and Cisco Jabber® collaboration solutions. Beyond reducing emissions,

these technologies also increase employee productivity, promote work-life balance, and help us build

customer relationships.

Table 34: Remote collaboration technology solutions

Technology solution

Immersive videoconferencing We have more than 5800 multipurpose TelePresence rooms, an

additional 200 fully immersive TelePresence rooms and over 1000

Webex Teams Boards, deployed in our offices worldwide.

Small office/Personal video

conferencing

The Cisco Workplace is Cisco’s shared office space solution. Many

small, flexible-use rooms for one to two people have Webex Pro,

DX80, IP Phones or MX00 videoconferencing units installed.

We’ve deployed over 88,000 IP Phones and over 17,000 personal

Cisco TelePresence devices (Webex Pro, DX80, etc.) worldwide to

help enable our shared office space solution.

Desktop/Devices

videoconferencing

Webex Meetings, Webex Teams are available to all Cisco employees

using Cisco-assigned laptops.

- In FY20, we logged over 1.7M Webex meetings per month

consisting of both voice and video meetings, supporting over 7.3

M attendees per month.

- On Webex teams in FY20, we had over 122K monthly active

users exchange 150M messages and share over 3.6M files

monthly.

- There are over 92,000 deployments of Soft Clients, where

employee can forward phone calls through their computer

eliminating the need all together to be near a communication

device.

- Cisco Jabber, Cisco Webex Meetings and Cisco Webex Teams

interoperable on smart phones with over 67,000 devices

See the SMART 2020 report published by GeSI for a more detailed explanation of the enabling effect.

Cisco 2020 Environment Technical Review 44 feedback?

registered, providing flexibility to communicate in even more

locations.

Home/remote office

videoconferencing

Through our Cisco Virtual Office (CVO) hardware and Cisco

AnyConnect VPN, employees had more flexibility to either work from

home or any other location with network access. In FY20, we

supported over 29,000 CVO units and over 106 K Cisco AnyConnect

VPN users worldwide.

Replacing business air travel with remote collaboration requires more than just technology. Our business

processes, management practices, and culture have also had to adapt. As experience with collaborative

technologies increases, within Cisco and among our customers and partners, remote interactions have

gone from being the exception to standard practice.

Hosting and attending Webex meetings with other employees or with customers, partners, and other

stakeholders has become as common as using the telephone. We use Cisco TelePresence, Jabber, and

Webex for virtual company meetings, executive operational reviews, and department all-hands meetings.

In addition, about one-third of our annual global ISO 14001 site audits are performed using Cisco remote

collaboration solutions. This real-world experience guides product development and helps with the rollout

of supporting management practices. Because adoption of remote collaboration technologies has

matured, we are no longer tracking adoption metrics included in our previous CSR reports.

Products and packaging materials

Product and packaging goals

Cisco has set new goals and committed the necessary resources to meaningfully reduce our

environmental impact and contribute to a circular economy. See Table 10 for a complete list of our current

product and packaging goals. Our progress on these goals is reported in tables in this Products and

packaging materials section that are also listed in Table 10.

At the World Economic Forum in 2018 as part of the

Platform for Accelerating the Circular Economy

(PACE) initiative, Cisco made a 100-percent product-return pledge. Product return is a foundational

element of the circular economy. The Product return sections detail the various elements of our efforts to

increase product return from our customers and drive higher rates of reuse according to circular economy

principles.

Stakeholder engagement for the circular economy

Cisco engages with a variety of organizations, including governments, standards development

organizations, and nonprofits, to collaborate and influence on circular economy and related topics.

Through our involvement, we share with and learn from peers, work to help bring clarity and consistency

to the global marketplace, create predictable requirements that enable companies to focus on the

environmental issues most relevant to their business, and address opportunities or challenges that cannot

be solved alone. Table 35 highlights several circular economy initiatives and organizations in which Cisco

participated in FY20.

Table 35: Circular economy-related initiatives and organizations in which Cisco participates

Organization Engagement Areas

CDP IT Industry Collaboration Group

Cisco reports annually to CDP, a not-for-profit organization that runs the global

disclosure system for investors, companies, cities, states and regions to manage

their environmental impacts. Cisco engages with CDP and a group of peer

technology companies through the IT Industry Collaboration Group to set clear

expectations and provide joint training for our suppliers.

CENELEC Cisco is actively working with CENELEC, a European standards organization, on

standards for circular design.

Circular Electronics Partnership (CEP)

Cisco is an active participant in a multi-stakeholder collaboration with seven

organizations (GeSI, Green Electronics Council, ITU, PACE, Responsible Business

Cisco 2020 Environment Technical Review 45 feedback?

Alliance, World Economic Forum, WBSCD) and peer companies to establish a

shared vision and roadmap for a circular electronics value chain.

Digital Europe Cisco is a member of Digital Europe, a trade association representing digitally

transforming industries in Europe and is leading industry input to the

EU ICT impact

study and the EU Circular Economy Action Plan.

Ellen MacArthur Foundation (EMF)

Cisco was a founding partner of EMF, and we continue to leverage member

connections, trainings, and shared learnings as a Member of EMF.

European Telecommunications

Standards Institute (ETSI)

Cisco actively engages with ETSI, a European Standards Organization (ESO) that

is a recognized standards body dealing with telecommunications, broadcasting and

other electronic communications networks and services. Cisco engages in material

efficiency standards related to mandates from the European Commission, and is

leading the work on secure data deletion and on energy metrics for servers.

International Telecommunication Union

(ITU) (worldwide)

Cisco is a contributor to the ITU-

T SG5 WP2 Lead Study Group on ICT and climate

change. On circular economy aspects, we co-edited the standard “ITU-T L.1023:

Assessment method for circular scoring.”

Partnership to Reuse, Refill, Replace

Single-Use Plastics (PR3)

Cisco is a technology sponsor of PR3, a cross-industry initiative with the goal of

replacing single-use packaging by making reuse systems globally scalable, and

economically, socially and environmentally preferable for consumers and the whole

value chain.

Platform for Accelerating the Circular

Economy (PACE) Capital Equipment

Coalition (part of the World Economic

Forum)

Cisco is an active member of the Capital Equipment Coalition, an affiliated project

of PACE, which shares and publishes best practices as well as pro

gress toward the

pledges each member made in January 2018.

Product Attribute to Impact Algorithm

(PAIA)

Cisco is part of a multi-stakeholder consortium of ICT companies using shared

industry-standard inputs in the PAIA platform—a joint initiative of MIT and Quantis

— that provides a streamlined methodology for ICT product environmental

footprinting.

Responsible Business Alliance (RBA)

Cisco is an original founder and full member of the RBA. We collaborate with peers

at the RBA to propagate best practices across the industry and supply chain,

including those related to circular economy.

Reverse Logistics Association (RLA)

Cisco serves on the Advisory Board and is a Diamond member of the RLA, a global

trade association for the returns and reverse logistics industry.

Circular design

Circular design is fundamental to our ability to implement a circular economy, both now and in the future.

Our circular design strategy spans five focus areas, which address our most material impacts. In FY20,

guided this framework, we developed Circular Design Principles, allowing us to make progress toward

several of our product and packaging goals.

1. Material selection – Incorporate recycled content into our products, reduce the use of non-renewable

materials, and reduce exposure to resource scarcity risks as part of material selection.

2. Standardization and modularization – Standardize and modularize components and enclosures to simplify

our supply chain and enable reuse, repair, remanufacturing, and recycling.

3. Sustainable packaging – Use recycled and renewable packaging materials, reduce foam and plastic use,

move toward fiber-based designs, and increase packaging efficiency.

4. Smart energy consumption – Improve product energy efficiency through activity-based and power

management features.

5. Design for disassembly, repair, and reuse – Design products with easily separable components that use

similar materials to facilitate reuse, repair, remanufacturing, and recycling.

We are embedding these Circular Design Principles into standard design tools and processes, and

developing a product-scoring methodology to measure progress toward our circular design principles

goal. Per Table 10, we have set a goal to design 100 percent of new Cisco products and packaging to

incorporate circular design principles by FY25. We will report our progress against this goal in our FY21

CSR reporting.

Cisco 2020 Environment Technical Review 46 feedback?

In FY20, we held eight workshops globally with stakeholders from across our design community, including

Cisco employees from supply chain, engineering, and product management. These workshops increased

awareness of our circular design strategy, sparked innovative new design ideas, and grew the community

of advocates advancing circular design in their business units. We also established a Circular Design

Steering Committee and launched a Circular Design Working Group, which meets regularly to share case

studies, discuss best practices, and stay updated on key initiatives.

To increase awareness and understanding of our circular design strategy, we developed an interactive,

gamified training course targeted at our design community. In this course, launching in FY21, employees

will make a series of design decisions to “build” virtual Cisco products and learn about the Circular Design

Principles as they go.

Our Circular Design Principles are increasingly being incorporated into the design of new products,

making those products more durable, environmentally friendly, and easier to reuse through multiple life

cycles. In FY20, we launched our first products with closed-loop plastic. Another example is our IR1101

router, which employs a highly modular and expandable hardware design to extend product lifetime.

Customers have the flexibility to add or upgrade components as their needs and technologies evolve. The

updated design also reduced the idle power by 45% from the previous generation.

Product materials

Recycled material content

Like many companies, Cisco uses plastic in both our products and packaging. Plastic has many

advantages, from its technical properties to its low cost and light weight, the latter helping to reduce

emissions from transport. However, plastic in products and especially packaging presents sustainability

challenges if the product or packaging is not properly dispositioned.

Where technically feasible, we will design plastic out of our products and packaging to reduce the total

use of plastic material. Where it is not viable to design out plastic, we will increase the use of recycled

plastic to reduce the use of virgin material and associated drilling for oil. Driving increased demand for

recycled plastic helps making recycled materials a more economically viable option for more companies.

In FY20, we launched select models of the IP phone 8800 series and the Webex Room Kit Plus using

100 percent post-consumer recycled (PCR) plastic resin. These products are the first to carry a new

closed-loop plastic label Cisco has created to differentiate products made with recycled plastic sourced

from industrial recyclers including our own. And by using PCR resin, we will reduce the carbon footprint of

these plastic components by as much as 95 percent. Since the plastic components in these few products

account for more than 15 percent of Cisco’s total direct plastic procurement, full implementation in

manufacturing will have a significant impact toward achieving our goal to reduce virgin-plastic use by 20

percent by 2025. Progress toward meeting this goal is shown in Table 36.

Table 36: Progress toward meeting our virgin-plastics goal

KPI FY18 FY19 FY20 Comments

Total plastic consumption, metric tonne 6,175 not reported 4,563

Percent reduction in use of virgin plastic

Goal: Decrease use of virgin plastics by 20

percent by FY25 (FY18 base year)

baseline not reported -26%

Plastics contained in commodity components sourced from suppliers, such as printed circuit boards, are excluded. Most of these

components require the electrical insulating property provided by plastic.

The production of the 8800-series and WebEx Room Kit products was delayed due to COVID-19, but will

take full effect in FY21. COVID-19-related impacts beginning in March 2020 through the July end of

Cisco’s fiscal year largely drove the indicated 26% virgin-plastic reduction in FY20. Given this extenuating

circumstance, we do not consider the goal to be met and continue to drive reduction efforts in FY21.

Cisco 2020 Environment Technical Review 47 feedback?

Eliminating paper from new product shipments

In July 2020, we announced a goal to eliminate all paper documentation that is included in new product

shipments by the end of FY21. (See Table 10) For many of Cisco’s hardware products and software

solutions, a significant amount of paper is shipped in the form of licenses, manuals, and compliance

documentation. Eliminating these paper shipments and moving to electronic delivery represents an

opportunity to reduce waste, cost, and GHG emissions while streamlining the supply chain and enhancing

the customer experience. We will report our progress against this goal in our FY21 CSR reporting.

Materials of concern

As a global supplier of network equipment, we conform to applicable material regulations for product,

packaging, and battery materials. We’re committed to reducing the impact of the materials used in our

products and in our supply chain. We developed our Controlled Substances Specification to fulfill global

environmental regulations. The purpose of this specification is to share Cisco’s substance use and

reporting requirements with component suppliers and manufacturing partners. It outlines controlled

substances and any conditions of use, regulatory restrictions, substances to be reported and phased out,

and substances under study for potential inclusion. We restrict more than 230 hazardous substances and

38 previously allowed substance exemptions. In addition, we are evaluating more than 20 additional

substance groups for potential future restrictions beyond 2021 calendar year due to global trends and

customer priorities.

For additional information on materials-related regulations, visit Cisco’s Materials webpage. To obtain to-

date product-level information such as a CE Declaration of Conformity, visit our self-service

Product

Approvals Status (PAS) tool

The following sections cover a number of materials that, while currently not prohibited for use in our

industry, we are working to reduce or substitute in our products where possible.

Halogenated flame retardants

Nonregulated halogenated flame retardants (HFRs) can be found in PCBs and plastic parts. We have

worked with manufacturing partners, industry standards technical committees, and academia to validate

proposed alternatives to HFRs. Cisco continues to identify when and where, if technically possible, to

phase out nonregulated HFRs.

Some of the actions we have taken include:

• Qualifying additional halogen-free PCB laminate materials and increasing their use in new products

• Eliminating, from thousands of Cisco-designed plastic parts, the HFRs found in resin compounds

• Performing material assessments and identifying areas within our business with the greatest opportunity

to move to HFR-free materials

Polyvinyl chloride

Polyvinyl chloride (PVC) is a nonregulated substance found in cable insulation. Cisco worked on the

iNEMI PVC Alternatives Project to reduce PVC content in cable insulation. This work focused on

understanding the environmental trade-offs of standard, halogen-free, and bio-based cable jacketing.

Cisco will continue to research alternate materials and apply them to new products where we can

maintain quality and performance requirements.

Batteries

Batteries in Cisco products are generally used to maintain information in volatile memory when a device

is powered off at the switch or plug. Products with batteries are designed so that the batteries can be

easily located, removed and properly dispositioned for recycling. We use product labels to indicate if a

product contains a battery. This label alerts our recyclers to remove a battery before further processing.

Cisco.com registration is required. Register here. Note: This tool is only accessible using Internet Explorer and Mozilla Firefox.

Cisco 2020 Environment Technical Review 48 feedback?

Product life-cycle management

Central to the concept of a circular economy is maintaining physical assets at their highest and best use

for as long as possible. As Cisco transforms to become a software and features-driven business, we must

not lose sight of the importance of our hardware in enabling those solutions.

We continue to make progress toward our PACE pledge (above), as well as our broader circular economy

vision, building on close to two decades of programs to facilitate product returns for reuse and recycling,

offer comprehensive service and repair, and remanufacture used equipment for sale through Cisco

Refresh. Our strategy focuses on improving the customer experience to drive increased product returns

at end-of-use, expanding business and as-a-service models to facilitate return and reuse, and improving

product design to facilitate reuse and recycling. The programs covered in this section aim to extend the

useful life of our hardware and are organized by product life cycle stage—from use, to return to reuse and

end-of-life.

Use

After design, the use phase of our products is the first key step as we incorporate our circular economy

approach into the life-cycle management of our equipment. Cisco’s Global Service Supply Chain

organization delivers and supports customer and partner hardware Return Material Authorizations

(RMAs). Smart Net Total Care is Cisco’s service offering to support Cisco equipment in customer

facilities, offering return and replacement at varying service levels depending on the customer and

location in the network.

We are constantly optimizing our network and inventory levels as parts are used, customers deploy new

products, and old hardware becomes obsolete. To maximize products’ useful life, we replace, recover,

and refurbish equipment and components as necessary through an extensive logistics, warehouse,

planning, and repair operations network. Each device is repaired and repeatedly tested to ensure

compliance with the latest manufacturing specifications. Product energy consumption (above) is also a

key customer metric in the use phase of Cisco products.

End of use

Returns

End-of-use is not end-of-life. Enabling multiple lifecycles for our products and the components inside

them has long been a Cisco priority. We operate multiple programs to promote customer product return

and to then remanufacture, refurbish, and reuse at the product, component or material level, as

appropriate. Our various return programs are designed to support the needs of customers and partners,

suppliers, and internal users.

Information on our compliance with product recycling regulations, such as the Waste Electrical and

Electronic Equipment (WEEE) can be found in the Environmental compliance section above.

Improving the customer returns experience

Knowing that the user experience is key to driving product returns and the circular model we envision, we

simplified the product return process for customers and partners in FY20. We analyzed over two dozen

processes across Cisco and found two areas where we could make an immediate change, with

meaningful impact for our customers.

First, we consolidated all the information on Cisco returns procedures into one Cisco Returns Portal

. This

new portal walks the user through the process step by step, making it easier for customers and partners

to request and complete returns, and providing a phone number to answer any questions.

Second, we re-launched our product takeback program in the U.S.—Takeback and Recycle is now

Takeback and Reuse

. Customers can follow simple instructions using a web form, a new call center, or

our Send IT Back mobile app to conveniently request a free pickup of any used Cisco equipment. This

program can also be applied to competitive equipment with approval. In the coming months, we plan to

expand this program in compliance with all global trade regulations.

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A summary of Cisco product return programs is provided in Table 37 with additional detail provided in the

following sections.

Table 37: Cisco product return programs

Customer Programs

Programs for companies producing or

repairing Cisco products

Internal programs for Cisco

• Cisco Takeback and Reuse

Program

• Exceptional Pick-Up Program

(EPUP)

• Customer Recycling Solutions

(CRS)

• Cisco Migration Incentive

Program (MIP)

• Manufacturing Scrap/Reuse

Program

• Global Scrap Program

• eBin/Lab Scrap Program

• Cisco Data Center Server

Recycling Program

• Non-Genuine Brand Program

• Recycle IT Day events

The Cisco Returns Portal helps customers and partners find the right return path to meet their needs.

Customer and partner programs

Our trade-in and recycling programs are designed to bring back the products that Cisco or our acquired

companies sold to customers. The Cisco Migration Incentive Program

(MIP; formerly Technology

Migration Program) and Product Takeback and Reuse Program (formerly Takeback and Recycling)

enable customers to return equipment at end-of-use. MIP is a global channel partner program that uses

discounts in exchange for product returns to reward partners for migrating their customers’ networks to

new Cisco technologies. The Product Takeback and Reuse Program, which includes the

Exceptional

Pick-Up Program (EPUP), provides a simple, secure and sustainable means of returning end-of-use

Cisco equipment, along with Cisco-acquired-company equipment, at no cost. It was relaunched in FY20

in support of our commitment to the circular economy and our pledge of 100 percent product return.

Customers who specifically seek to return end-of-life equipment to be recycled can take advantage of

Cisco's free recycling program, recently rebranded as Customer Recycling Solutions (CRS

). The CRS

Program focuses on Cisco-branded items that are ready to be recycled. CRS also accepts equipment

from other manufacturers that has been replaced by newly purchased Cisco items. These materials go to

the closest Cisco-approved recycling site. The number of locations of Cisco authorized recyclers

continues to expand based on the growth in our business and the requirements of local regulations.

• Cisco Customer Recycling Solutions Submission Form

• Customer Recycling Solutions Program (email): recycling@external.cisco.com

Cisco-internal programs

Manufacturing scrap/reuse and global scrap

The Cisco Manufacturing Scrap/Reuse Program collects and works to redeploy excess, obsolete, or

damaged materials from our contract manufacturers, manufacturing partners, original equipment

manufacturers (OEMs), original design manufacturers (ODMs), and proprietary component suppliers. In

addition, the Global Scrap Program supports the recycling needs of our contracted repair manufacturers

and distribution depots. Both programs are a valuable source of reusable product.

• Global Scrap Program

• Manufacturing Scrap/Reuse (email): cmeod-recycling@cisco.com

eBin / Cisco data centers / non-genuine Cisco products

The largest of Cisco’s internal programs is the eBin/Lab Scrap Program. eBins are green plastic rolling

bins, or in some cases gaylord boxes, that are placed in labs or Cisco offices around the world to collect

orphaned, used, and test equipment for recycling. In FY20, our eBin program serviced 235 offices and

accounted for 13 percent of the total weight collected globally for recycling.

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The Cisco Data Center Server Recycling Program serves data centers in eleven countries. When a data

center no longer needs a server, it is offered to other Cisco data centers for possible reuse. When one of

these servers reaches the end of its useful life, it is recycled, and all parts are shredded.

The Non-Genuine Materials Program handles non-genuine Cisco products sometimes received in an

equipment return. Items are classified “non-genuine” if they are competitor products or if they are Cisco

products that have been altered by someone outside of our certified repair vendors. They can also come

to Cisco through law enforcement seizure of counterfeit Cisco equipment. When we find non-genuine

equipment, we use a special witnessed protocol whereby we shred and separate materials into their basic

components to send to downstream recyclers and vendors.

• Data center / eBin / Non-genuine Submission Form

Recycle IT Day

Employees have an opportunity to return unneeded personal electronics at our annual Recycle IT Day

scheduled as part of Earth Day-related activities. Cisco employees and contractors can bring their e-

scrap from home, and Cisco pays to have the materials recycled properly. Any Cisco office location can

host a recycling day event. In FY19, we held our 24th annual Recycle IT Day event, with 161 Cisco sites

around the world participating and 191.5 metric tonne of used electronics collected. Since Cisco started

holding these events in 1995, our employees and contractors have helped recycle 3,235 metric tonne of

used electronics.

Recycle IT Day usually takes place on or around Earth Day in April. Due to COVID-19, we postponed and

eventually canceled our FY20 Recycle IT Day for the safety of our employees. More information is

available in the Environment employee engagement section.

Reuse

Reuse is always our first priority. Returned devices that can be reused are remanufactured, refurbished,

or repaired and reused by Cisco CX Service Operations or our internal labs, or resold by Cisco Refresh.

Cisco Refresh, our certified remanufactured equipment program, plays an important role in our circular

economy initiatives, creating a second life for equipment and thereby not only saving the resources

required for new manufacturing, but also reducing waste. Cisco Refresh products are backed by the

same Cisco warranty and service options as new products. Equipment is sold only through Cisco

authorized resellers and is available in more than 80 countries. Inventory includes products from all

technology areas, including switching, routing, wireless, IP telephony, security, and other advanced

technologies.

We also reuse product in our Return to A-Stock program, where unused products from our distribution

centers are sent to be reused by our contracted manufacturing sites. In FY20, Cisco expanded this

program from nine sites to 10. Returned products that are considered “new-in-box” are sent back to be

tested and, if necessary, reconfigured. This allows us to better reuse these products while also improving

our ability to satisfy demand for new equipment without new manufacturing.

Alongside our efforts to increase our reuse of used equipment, we must also address external barriers in

order to scale these opportunities. We collaborate with peer companies, NGOs and policymakers to

address challenges and unintended consequences, such as the many global classifications of waste for

transboundary movement which can impact our ability to repair equipment.

End of life

When products can no longer be re-used, they are sent to recyclers for components to be harvested and

the remaining commodities to be responsibly recycled and redirected to global materials markets. We

currently have two contracted recyclers. Each recycler uses both company-owned facilities and

subcontracted recyclers to provide global recycling coverage. Cisco’s contracted recyclers are required to

be certified to one or more e-scrap-specific recycling standards, such as R2, R2 RIOS, eStewards

, and

WEEELABEX.

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In addition, our contracts with our recyclers include strict and formally documented recycling processes

that are also applied to subcontractors that work with Cisco equipment. We approve every prospective

recycling company and every recycling location before sending any Cisco equipment for processing.

Each contracted recycler provides Cisco with monthly reports showing all cases opened and processed

on a lot-by-lot basis. Reports include a mass balance showing the weight as received and the weights of

each fractional commodity adding up to the gross weight received. On a quarterly basis, we hold business

reviews with the recyclers to review recent results, action items, and upcoming focus areas. We also

conduct random site audits of recycling facilities.

Harvesting

Cisco’s overarching goal is to redeploy as much material as possible, which led to the launch of a

harvesting pilot program in January 2017. For the first time, Cisco allowed our recycling partners to

capture commodity components from product sent to the recycler for disposition. The pilot was a success,

and harvesting is now part of our standard process.

After material is received and weighed on a calibrated scale, recyclers review items for possible

component harvesting. They may harvest processors, memory, and other hardware with sufficient market

value to offset the cost of their harvesting, cleaning, packaging, and resale. Harvested components must

be cleared of data in compliance with the NIST 800-88 standard before being available for resale. In

FY20 our component harvesting program allowed more than 120 million components to be reintroduced

into the market, thus extending their useful lives and reducing the need to manufacture new parts.

After harvesting, the remainder of the product e-scrap is dismantled and sorted into “commodity

fractions”: steel, aluminum, cardboard, plastic, wire/cable, and printed circuit boards (PCBs). All other

materials, including any batteries or packaging materials, are sent to downstream recyclers.

Recycling

Recyclers are the last resort after we have exhausted all options for reuse. They are the common

destination of all end-of-life materials, including customer returns, employee office equipment, and lab

equipment, as well as excess, obsolete, and damaged materials from our contract manufacturers,

manufacturing partners, original equipment manufacturers (OEMs), original design manufacturers

(ODMs), contracted repair partners, and distribution depots.

Cisco’s two contracted recyclers together have worldwide coverage as shown shaded in blue in Figure 1.

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Figure 1: Cisco reverse logistics locations

Of products sent to our e-scrap recyclers, nearly 100 percent are harvested or broken down into

commodity fractions and sent to downstream vendors to create new products. From FY16–18, our target

was to keep the percentage of material sent to landfill under 0.48 percent. In FY19, this objective was

lowered to 0.38 percent. Because our customers or partners are responsible for packaging used product

for return to Cisco, we have limited control over the material received, including any packaging or trash. In

spite of this uncertainty, we will continue to use 0.38 percent to landfill as an operational measure of our

recycling partners.

In fiscal 2020, we saw an overall decrease in return volume coupled with an increase in our reuse, resale,

and refurbishment rate, while the percentage of material sent to landfill decreased (Table 38). Some of

the decline in returns is due to site access limitations due to COVID-19 restrictions, as well as a decline in

returns of unused products from our distributors. However, returns from customer end-of-use have held

steady, and this is the area we are focused on for growth. Increases in reuse can be attributed to

incremental improvements in the channels for reused or refurbished equipment, an area where we made

progress in fiscal 2020, despite challenges related to COVID-19. We continue to explore opportunities to

use recycled content in our new products as described under Recycled material content.

Table 38: Product return, reuse and recycling

KPI FY16 FY17 FY18 FY19 FY20 Comments

Product returns, metric tonne 12,609 11,398 13,946 9,881 8,914

All

materials sent for harvesting, recycling,

and reuse, including materials received via

a Product Return Materials Authorization

(RMA)

Refurbish, resell, and reuse rate,

percent

19.0% 15.7% 31.0% 13.1% 15.3% Material returned from customers, stock

rotations, or internal sources that is

redeployed by Value Recovery and Repo

Depot groups to Cisco Service Supply,

Cisco Refresh, or internal users to avoid

new purchases

Recycle rate, percent 80.7% 83.9% 68.6% 86.5% 84.6%

All remaining electronic waste materials,

including plastics, precious and

nonprecious metals, that are shredded

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and recycled by our contracted e-scrap

recyclers

Returned material sent to landfill,

percent

0.28% 0.36% 0.35% 0.38% 0.16%

Landfill material consists of nonelectronic

waste materials, such as broken pallets,

wet cardboard, and shrink wrap,

accompanying Cisco product returned by

customers

Product packaging

In a truly circular economy, there is no such thing as waste. The current reality is that many packaging

materials become waste immediately after first use. We are working to remove unnecessary packaging

and make what remains reusable and/or easy to recycle. Some common materials used for packaging

are difficult to recycle, like foams or expanded polymers, yet they continue to be selected due to their

ability to protect products during shipment. Products that are damaged in transit create negative business

and environmental impacts, since repairing or replacing a damaged good damages customer good will

and requires more material and energy resources.

To support Cisco’s commitment to sustainable packaging, we announced two new goals in July 2019

focused on reducing the use of foam and improving product packaging efficiency.

Table 39: Performance toward foam reduction goal

KPI FY19 FY20 Comments

Percent reduction in foam in packaging

Goal: Reduce all foam used in Cisco product

packaging by 75 percent, measured by weight, by

FY25 (FY19 base year).

baseline -11.5%

For the foam-reduction goal, COVID-19-related impacts beginning in March 2020 through the July end of

Cisco’s fiscal year affected reporting. We expect FY21 reporting to be more representative of actual

progress toward meeting this goal.

We are reducing the environmental footprint of our packaging and making progress toward our goals by

optimizing packaging efficiency, minimizing single-use plastics and foam, reducing unwanted or

redundant items in shipments, and using readily recyclable materials. In FY20, we updated the packaging

for our Carrier Routing System Performance Route Processor and Fan Controller spares by redesigning

the foam cushions and carton. These changes reduced the dimensional weight of the spare pack while

also removing nearly two pounds of foam for each product shipped. Through additional packaging design

changes, we also eliminated more than 80,000 pounds of corrugate from our total packaging shipped in

fiscal 2020. With a number of additional projects underway, we expect to see increased reduction in fiscal

2021.

Beyond basic packaging and material requirements, Cisco evaluates four additional aspects of

environmental package design: 

• Packaging material optimization: Designing a package that adequately protects the product from

transport damage or waste while optimizing the volume of material and complying with all relevant

environmental regulations 

• Space efficiency optimization: Designing a package that optimizes space efficiency during transport. 

Per Table 10, we have set a goal to increase product packaging cube efficiency by 50% by FY25 (FY19

base year). We refined our packaging efficiency efforts to focus on packaging volume rather than

volume per weight of product. In doing so, we will both reduce the total amount of packaging used and

realize logistics savings. We will report our progress against this goal in our FY21 CSR reporting.

• Multi-pack evaluation:  Design a multi-pack solution when appropriate for high volume products to

reduce the total amount of packaging material.

• Sustainable materials: Including recycled content and recyclability

Cisco 2020 Environment Technical Review 54 feedback?

Table 40: Focus areas for sustainable product, packaging and fulfillment solutions

Product packaging materials

Generally, our packaging uses corrugated cardboard that includes a minimum of 25 percent recycled

content. Almost all of our packaging for new products is made either of a single material or of multiple

materials that are separable for recycling. In our global market, customer, municipal, and

regional recycling practices vary greatly. Customers’ ability to recycle our packaging depends on the

recycling facilities in place in their location. 

The plastic used in Cisco packaging falls into categories identified by Resin Identification Codes 1 to 7.

Polyethylene (codes 2 and 4) is the predominant material. Some plastic components carry labels

indicating their plastic recycling code number to support end-of-life recycling. We use thermoformed

medium-density polyethylene cushions made from virgin material or from recycled substitutes. When

regionally available and technically feasible, we use cushions made from recycled polyethylene. Cisco

legacy products, including those produced by our acquired companies, may not incorporate all current

packaging best practices. A similar challenge also exists for packaging provided with OEM products that

a Cisco supplier delivers directly to a customer.

We strive to use recyclable packaging, however sometimes this is not possible due to limited options for

alternative, sustainable materials. For example, although metallized antistatic bags are not easily

recycled, they are essential to the safe transport of products susceptible to damage from electrostatic

discharge. We size bags to fit the product being shipped and minimize the amount of material we use.

Our contract manufacturers also reuse antistatic bags.

Product packaging end-of-life

Cisco product packaging is designed to be separable and recyclable so it can be absorbed by local

packaging material recycling programs. Cisco does not collect used packaging, as shipping empty

product packaging to Cisco for recycling would create unnecessary environmental impacts. However, we

are exploring reusable packaging options for specific scenarios. One example is using reusable

packaging for customers near our distribution sites. This would allow packaging to move between two

locations for reuse while minimizing the environmental impact of shipping empty material. Read more

about Cisco’s compliance with environmental packaging regulations

Category Benefits Cisco product examples

Secondary product

configurable options

Reduce materials, packaging, and shipping

costs by providing customers with a way to opt

out of receiving cables, brackets, and similar

items.

Customers can choose not to receive:

• Cables from our UCS Storage products, Security products and

Catalyst switching products

• Cisco Aironet® wireless access point mounting brackets and

clips

We intend to expand the availability of options to address growing

customer demands. However, widespread customer awareness and

adoption of such options remains a challenge.

Electronic delivery

of software, licenses,

and product

documentation

Increase dematerialization and operational

efficiencies. Reduce CDs, paper, and

packaging. Reduce packaging and fulfillment

costs.

The eDelivery program updates products available for electronic

delivery though unique product IDs and/or Cisco Commerce- based

electronic fulfillment preferences.  “Pointer cards” are used across

Cisco product lines to consolidate web links for product and

compliance documentation. 

Multi-packs Reduce packaging and shipping costs and

increase operational efficiencies by shipping

products in multi-unit packaging.

Bulk-pack models are available for select high-volume products or

spare, including cables, optics pluggables, memory, central

processing units, hard drives, fans, and rack gear kits.

Waste reduction Reduce amount of packaging being used on

Cisco products.

Improved product testing had led to a reduction in the amount of

packaging needed to protect products. Designs have been optimized

to reduce corrugate, paper, and foam.

Use of recycled

materials

Reduce the amount of new materials required

to produce our products and packaging and

divert waste from landfill.

Sourcing alternative materials with recycled content, such as molded

fiber and thermoform cushions.

Cisco 2020 Environment Technical Review 55 feedback?

Water

Even though Cisco does not use significant amounts of water in our direct operations

, we understand the

importance of reducing water consumption as much as we can in our operations and supply chain. It’s

essential to protect this limited resource not only for our business needs, but also for the sake of

communities in which we operate.

Cisco’s water strategy is to:

• Benchmark and report water use and risks according to industry best practices

• Conserve water in our operations, focusing on water-scarce and water-stressed locations

• Work towards setting long-term water goals at our major campuses

Water usage

Cisco’s primary use of fresh water in our direct operations is for water, sanitation, and hygiene (WASH)

services in the workplace, such as in restrooms and cafeterias. We also use water in our cooling towers

and for irrigation where we are unable to use recycled water. Our primary use of recycled water is for

irrigating landscapes and use in our cooling towers at several of our major campuses. See Table 41 for

details on Cisco’s water use.

Many of our suppliers require fresh water as a direct input during production, and for drinking water and

sanitation for their employees. Our Tier 1 suppliers’ (i.e., contract manufacturing and ODM suppliers)

primary use of fresh water is the same as Cisco’s. They provide WASH services in the workplace as well

as for cooling towers and irrigation. For some Tier 2 component suppliers that need large amounts of

water in their production process, such as semiconductor and PCB suppliers, water quantity and quality

impact their daily operations.

We use the WRI Aqueduct tool to better understand our water use and risks within our operations. The

Aqueduct tool revealed that 19% percent of Cisco’s water use by volume is withdrawn from water-

stressed areas – mainly in Bangalore, India. Notably, our headquarters in San Jose are no longer

considered water stressed. This because in 2019, the WRI Aqueduct Tool updated its baseline water

stress for the California Coyote River Basin, in which our headquarters are located, from Extremely High

(>80%) to Low (<10%). This change does not affect our commitment to water stewardship in California.

We will continue to monitor our entire portfolio for changes in water availability and will develop contextual

water management strategies accordingly.

Table 41: Water use in direct operations

KPI FY16 FY17 FY18 FY19 FY20 Comments

Total water withdrawn,

, thousands

3,050 3,220 3,394 3,299 3,018

This figure covers 100 percent of Cisco’s facilities within our

operational control. Withdrawal sources are reported below.

Cisco does not withdraw water from any source not listed

below.

Water withdrawn from

municipal supply (third-

party sources), m

thousands

3,010

3,204

3,366

3,111 2,823 The majority of Cisco's water withdrawals are from third-

party sources.

Water withdrawn from

fresh surface water, m

thousands

148 168 169 165 165 We withdraw water from a nearby lake at our Vaud,

Switzerland, location, use it on site in a closed-loop cooling

system, then discharge it back to the lake

Water withdrawn from

groundwater, m

thousands

40 16 28 22 30 Water is treated on site at our Boxborough facilities and

then discharged back to the groundwater.

Total water recycled and

reused, m

, thousands

95 106 116 109 65

Cisco recycles and reuses about 60 percent of the water it

withdraws for use at our Bangalore, India, facilities.

Cisco 2020 Environment Technical Review 56 feedback?

Total water consumption,

, thousands

- - 108 358 358 We are in the process of improving our water accounting

practices and expect to more accurately report the water we

use for evaporative cooling and irrigation.

Total water discharged,

, thousands

3,050 3,220 3,286 2,941 2,660

This figure covers 100 percent of Cisco’s facilities within our

operational control. Discharge destinations are reported

below. Cisco does not discharge water to any destination

not listed below.

Total water discharged

sewer (third-party

destinations), m

thousands

2,862 3,149 3,258 2,753 2,465 The majority of Cisco's water discharges are to third-party

destinations.

Total water discharged to

fresh surface water, m

thousands

148 168 159 165 165 We withdraw water from a nearby lake at our Vaud,

Switzerland, location, use it on site in a closed-loop cooling

system, then discharge it back to the lake.

Total water

discharged to

groundwater, m

thousands

40 16 28 22 30 Water is treated on site at our Boxborough facilities and

then discharged back to the groundwater.

Real estate portfolio

covered by water

reporting

100% 100% 100% 100% 100%

Real estate portfolio

where we receive water

data from the utility

73% 72% 71% 71% 71%

The Energy Information Agency (EIA) estimates large commercial buildings in the U.S. use about 18,400 gallons (69.7 m3) of

water per worker per year. In FY19, Cisco used 42 m

of water per employee, far below the EIA average.

Water stewardship

Cisco is committed to managing water responsibly across our direct operations and our supply chain, see

Supplier water security. We have implemented numerous water conservation projects in our direct

operations over the past few years. These projects are still conserving water today and will continue to do

so for many years to come:

• Upgrading irrigation controllers throughout the San Jose main campus

• Using reclaimed water for irrigation and cooling towers in RTP

• Installing variable-frequency drives in our cooling towers

• Installing two-way valves for toilets, waterless urinals, sink aerators, low-flow showerheads, and pre-

rinse spray valves for kitchen sinks

• Replacing water fountains and turf in San Jose and RTP with native planter beds that require little

water, and installing drip irrigation lines to improve irrigation efficiency

• Cisco has also implemented a comprehensive water management system in Bangalore, India. The

campus is a zero-discharge facility, meaning no wastewater is discharged to third parties or the

environment. All building water discharge is sent to two sewage treatment plants that use filtration and

reverse osmosis to treat the water for eventual reuse. The treated water is used in an evaporative

cooling system, for irrigation, and for toilet flushing in two campus buildings.

• We also achieved our water neutrality goal for our RTP campus. We began by completing a water audit

to determine how water efficient the campus was and identify opportunities to reduce our water usage.

The audit concluded that the campus is already quite water efficient; however, several efficiency

opportunities (such as replacing kitchen sprayers, sink and showerhead fixtures and installing new

filters in cooling towers) were identified that we plan to implement in FY21.

To balance the remainder of the water that we use in RTP, we invested in water restoration projects that

restore local watersheds in North Carolina and the Southeast. We are collectively restoring a volume of

water equal to RTP campus’ annual water consumption through these projects, enabling us to meet our

Cisco 2020 Environment Technical Review 57 feedback?

water neutrality goal. One of the projects we invested in is the removal of a decommissioned dam in

Western North Carolina. This project opens recreational access, improves public safety, restores

important free flowing aquatic habitat for several species and improves water quality. It also reconnects

140 miles of streams and ranks as the highest-priority dam removal project in the state and highest in the

region in terms of ecological improvement.

The next phase of our water stewardship journey is to develop targeted strategies to conserve water and

evaluate partnerships with local organizations to address local water issues at our major campuses

around the world. We are preparing for this initiative by performing water audits and upgrading key water

infrastructure in these locations.

Water-energy nexus

The production of electrical power is one of the largest users of fresh water. Therefore, one of the

greatest opportunities for Cisco to reduce our impact on water resources globally is by continuing to make

our products and operations more energy efficient.

The U.S. Geological Survey estimates in their latest 2015 water report that an average 15 gallons of

water are used to produce 1 kilowatt- hour of electricity in the U.S. Considering this, the energy savings

we achieve through our energy and GHG reduction efforts have a big impact on reducing water usage.

We estimate our FY20 energy reduction projects (Table 23), which avoided 19.3 GWh of energy usage,

also avoided 1.1 million cubic meters (m

) of water – roughly half/a third of our total FY20 water use.

Biodiversity (including land use)

Biodiversity is the variability among living organisms and the ecological complexes they are a part of. All

organizations impact biodiversity directly through their own activities or indirectly through their supply

chains. Cisco’s primary impact on biodiversity is the land we use for our facilities. We mitigate this impact

by reducing the demand for physical office space through employee telework programs and other support

solutions.

Operations

Cisco uses environmental impact assessments to evaluate the biodiversity and land-use impacts of our

sites. We generate annual biodiversity summary reports for all land and property we own. Table 42 shows

the percentage of our portfolio with biodiversity assessments in place. Note that as Cisco’s total square

footage decreases, our percentage of real estate portfolio with biodiversity assessment decreases as

well. Some of the buildings we own in San Jose are located near a protected area for the American Cliff

Swallow, which is a bird species on the Least Concern category of the International Union for

Conservation of Nature (IUCN) Red List. To protect their habitat during nesting season, we close our

balconies on those buildings. We then remove the mud nesting locations on our buildings after nesting

season is over.

Table 42: Biodiversity and land use

Over the last several years, we’ve come to understand the importance of ocean biodiversity and

ecosystem health. To support and promote improved ocean health, Cisco has become a signatory to the

UN Global Compact Sustainable Ocean Principles. Guided by these principles, Cisco commits, where

KPI FY16 FY17 FY18 FY19 FY20 Comments

Percent of real estate portfolio

with biodiversity assessment

59% 58% 54% 55% 53% Includes IUCN Red List and national conservation

list species with habitats in areas affected by

operations. See Cisco’s current CDP Water and

Climate responses.

Total real estate footprint square

footage, millions

22.2 20.8 21.4 20.6 19.4 Reducing our square footage minimizes our

physical impact.

Cisco 2020 Environment Technical Review 58 feedback?

relevant, to ensure that we integrate material ocean-related risks and opportunities in corporate strategy,

risk management, and reporting.

Species conservation

In FY20, Cisco donated networking equipment to five game reserves located in Botswana, Kenya and

South Africa. These game reserves are using networking technology to reduce poaching by improving

game reserve boundary control, monitoring people entering or within the reserves, or tracking the animals

to more effectively deploy park resources that protect the animals.

Solid waste from operations (trash)

Cisco’s waste reduction and recycling program is a key component of our ISO 14001 certification and

global environmental policy. While municipal and regional recycling practices vary, all our facilities take

steps to reduce their operational waste and reuse and recycle materials. Our strategy is to reduce both

our total waste produced and the proportion of waste sent to landfill by incorporating the principles of

reduce, reuse and recycle throughout all of our direct operations. See Table 43 for examples of our waste

reduction initiatives.

Information on reducing solid waste at our supply chain manufacturing facilities is addressed in the

Supplier material waste section above.

Table 43: Cisco solid waste reduction initiatives

Reduce

• Using online learning and communications technologies to reduce paper use

• Automatic double-sided print for all printers

• Making product information available online to reduce paper use

• Replacing plastic to-go containers with biodegradable alternatives

• Rightsizing meal portions and catering orders to minimize food waste

Reuse

• Managing an internal Repo Depot program, which allows us to reuse lab and testing equipment

• Reusing incoming pallets with outgoing shipments wherever possible

• Collecting PC equipment for reuse by our vendor

• Donating surplus used office supplies to local schools

• Utilizing reusable cutlery and dishware in select cafes and breakrooms

• Donating furniture from refreshed Cisco spaces

• Donating excess cafeteria food to local nonprofits

Recycle

• Batteries

• Kitchen Oil

• Lightbulbs

• Confidential materials

• Beverage containers

• Wood and pallets

• Glass

• Cardboard

• Mixed paper

• Toner cartridges

• Compost

• Polyurethane foam

• Landscape waste for onsite compost/mulch

• Electronic scrap

• Food waste

• Construction waste

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In FY20, we diverted approximately 80 percent of the waste generated at our facilities from landfill

globally (Table 45).

Table 44: Recycling rates for solid waste (trash) from major campus locations

Campus location FY16 FY17 FY18 FY19 FY20

San Jose 85% 84% 86% 87% 89%

Boxborough 84% 86% 100% 100% 100%

RTP 52% 60% 67% 67% 66%

Bedfont Lakes 22% 15% 100% 100% 100%

Greenpark NA 74% 100% 100% 100%

Shanghai 30% 29% 43% 59% 41%

Tokyo 90% 90% 87% 90% 75%

Bangalore 63% 71% 68% 84% 91%

Total 75% 68% 73% 81% 80%

COVID-19 had a significant impact on the total waste generated at our facilities (Table 45). The majority

of our sites were closed, with employees under mandatory work from home, for almost half the year. As a

result, we produced about half of the waste compared to the previous year. Our headquarters in San Jose

diverted 89 percent of all waste streams from landfill in FY20, including a compost program that diverted

approximately 520 metric tonne of waste from local landfills. To build upon the success of our program,

we continue to set and work toward aggressive waste and recycling goals.

Table 45: Solid waste from operations (trash)

KPI FY16 FY17 FY18 FY19 FY20 Comments

Total operational waste

generated, metric tonne

9,805 12,519 10,559 10,498 5,863 This figure covers 100 percent of Cisco’s

facilities over which we have operational

control. COVID-19 has significantly reduced

the amount of waste generated in our facilities

during FY20.

Waste sent to landfill

(municipal solid waste)

2,448 4,019 2,842 2,004 1,149 This includes waste sent to landfill and waste

incinerated.

Landfill diversion rate 75% 68% 73% 81% 80%

Total operational waste

diverted, metric tonne

7,358 8,500 7,717 8,480 4,714

This includes waste recycled, composted,

hazardous/universal waste recycled, and

waste to energy. The FY20 number is

dramatically down from FY19 due to the

COVID-19 work from home order.

Recycled 6,369 7,407 6,292 6,683 2,885 Municipal recycling

Composted 784 770 808 1,180 1,942

Hazardous/ Universal waste 205 323 617 617 254 This includes batteries, kitchen oil, lamps,

printer toner

Waste to energy - - - - 141 T

his is waste burned to generate energy. Data

prior to FY19 is not available.

Percent real estate portfolio

covered by waste reporting

100% 100% 100% 100% 100 % Includes major campus locations in the United

States, India, and China.

Cisco 2020 Environment Technical Review 60 feedback?

RTP zero waste

We have been working toward a zero waste goal for our RTP campus

. More information on our RTP

campus goals can be found here

. In FY20, we diverted 76% percent of the waste produced at RTP

campus from landfill, up from 38 percent diverted in FY14.

In the first half of the year we expanded the zero waste program by switching plastic breakroom, cafe and

catering items over to reusable and compostable options and transitioning the campus from deskside

trash bins to centralized waste. However, COVID-19 had a significant impact on achieving our zero waste

goal in FY20: total waste produced at the campus is down 80 percent and the reusable program is on

hold until we return back to the office.

Other campus waste initiatives

We are also moving away from plastic and paper cups and toward reusable cups and mugs in many

offices around the world, including our Bedfont Lakes campus in the U.K. and the majority of our facilities

in Asia and Europe. In the U.K., we are also replacing the plastic and polystyrene to-go boxes, cutlery,

and straws with compostable options, and adding campus composting. In FY20, 128 facilities, making up

about 40 percent of our office square footage, were paper-cup-free.

The next phase of our waste reduction journey is to work towards setting long-term waste diversion and

reduction goals at our major campuses.

Effluents (Liquid)

We seek to locate our operations in areas where we can successfully serve our customers while limiting

our negative environmental impacts. Effluent spills, such as chemical, oil, and fuel spills, can have

significant negative impacts on the surrounding environment. They can potentially affect soil, water, air,

biodiversity, and human health, as well as our business. We take this and other environmental health and

safety issues very seriously. Cisco has had no significant releases to an environmental receptor over the

reporting year. Table 46 tracks liquid spills and discharges from Cisco facilities.

Table 46: Effluent spills and discharges

KPI FY16 FY17 FY18 FY19 FY20

Spills and discharges None None None None None

Non-GHG emissions

Because our production is outsourced to supply chain partners, our global operations primarily consist of

standard office activities and research labs. This limits our non-GHG emissions to volatile organic

compounds (VOCs) from cleaning products, nitrous oxides (NOX), and sulfur oxides (SOX) from on-site

fuel combustion (from vehicle engines, boilers, or emergency generators), and the subsequent formation

of ozone from the photochemical reaction of NOX. Table 47 summarizes our relevant non-GHG-related

airborne emissions: VOCs, NOX, SOX, and particulate matter.

We comply with California Air Resources Board requests and do not use mechanical equipment, such as

gasoline-powered lawn mowers, after 11 a.m. on designated Spare the Air days, when air quality is poor

in the San Francisco Bay Area. In accordance with the 1987 Montreal Protocol On Substances That

Deplete The Ozone Layer, we also have worked with our supply chain partners to phase out the use of

ozone-depleting substances.

According to definitions used in the TRUE and UL Zero Waste certification protocols, “zero waste” diversion is defined as a 90 percent or greater

overall diversion of solid, nonhazardous wastes from landfill, incineration (waste-to-energy), and the environment. Diversion methods can include

reduction, reuse, recycling, and/or compost.

Cisco 2020 Environment Technical Review 61 feedback?

Table 47: Non-GHG emissions

KPI FY16 FY17 FY18 FY19 FY20

Volatile organic compound (VOC)

emissions

Negligible Negligible Negligible Negligible Negligible

NOx, metric tonne 207 138 176 156 141

SOx, metric tonne 0.72 0.65 0.67 0.59 0.45

Particulate matter Negligible Negligible Negligible Negligible Negligible

Quantities of VOC-based chemicals deployed are minimal and monitoring is not required.

Cisco 2020 Environment Technical Review 62 feedback?

Appendix I – Sustainability Accounting Standards Board (SASB)

SASB standards were published in late 2018. In the current version of the standards, a materiality matrix

establishes 26 issue categories

grouped into five dimensions. These issue categories are then applied by

SASB across 11 industry sectors broken into 77 industries.

Cisco is classified by SASB in the Hardware industry category under the Technology & Communications

sector. On the SASB materiality matrix, five issue categories are identified as material for the Hardware

industry.

Table 48 provides Cisco’s SASB disclosure for the Hardware industry. Disclosure guidance was taken

from the SASB Hardware Sustainability Accounting Standard (October 2018) as informed by the SASB

Hardware Basis for Conclusions report (October 2018).

Table 48: SASB sustainability disclosure topics & accounting metrics (Hardware industry)

Topic SASB Code SASB Accounting Metric Disclosure

Data Security TC-HW-230a.1 Description of approach to identifying and

addressing data security risks in products

Please refer to pp. 23-24 of the 2020 CSR Impact

Report

Employee

Engagement,

Diversity & Inclusion

TC-HW-330a.1 Percentage of gender and racial/ethnic group

representation for (1) management, (2) technical

staff, and (3) all other employees

Please refer to pp. 43-46 of the

2020 CSR Impact

Report

Product

Design and

Life-cycle

Management

TC-HW-410a.1

Percentage of products by revenue that contain

IEC 62474 declarable substances

100% of our electronic products may contain small

amounts of some of the chemicals on the IEC

62474 declarable substances list. We have tracked

and restricted the substances of concern in our

products that have been identified as highest priority

for restriction in jurisdictions worldwide. Any

remaining uses of substances of concern in

products are for applications that lack viable

alternatives or substances of lower regulatory

priority.

Electronics companies still have products which

claim RoHS exemptions or REACH candidate

substances when there is no currently viable

alternative. For example, 100% of electronics

products still contain some amount of lead used in

specialized applications that are allowed under

RoHS exemptions. Also, ethylene glycol dimethyl

ether (EGDME), for which there is no known

replacement, is used in all coin cell batteries.

TC-HW-410a.2 Percentage of eligible products, by revenue,

meeting the requirements for EPEAT registration

or equivalent

To be provided mid-2021

TC-HW-410a.3 Percentage of eligible products, by revenue,

meeting ENERGY STAR® criteria

To be provided mid-2021

TC-HW-410a.4 Weight of end-of-life products and e-waste

recovered, percentage recycled

1. Product return: Weight of product returned from

customers, stock rotations or Cisco-internal

sources, including via recycling request or Return

Materials Authorization (RMA)

FY20: 8914 metric tonne

2. Refurbish, resell and reuse: Material redeployed

to Cisco services, Cisco Refresh, or internal

FY20: 1363 metric tonne (15.3%)

3. All material not refurbished, resold or reused is

redirected for component and commodity

harvesting.

Landfill material only consists of nonelectronic

waste materials—such as broken pallets, wet

cardboard, and shrink wrap—accompanying Cisco

product returned by customers.

Cisco 2020 Environment Technical Review 63 feedback?

FY20: 0.16% to landfill

Supply Chain

Management

TC-HW-430a.1

Percentage of Tier 1 supplier facilities audited in

the RBA Validated Audit Process (VAP) or

equivalent, by (a) all facilities and (b) high-risk

facilities

We require RBA audits of all manufacturing partners

every two years.

Each year, RBA or Cisco audits at least 25% of

component supplier facilities that are deemed high

risk according to our risk assessment are required

to conduct RBA audits.

TC-HW-430a.2 Tier 1 suppliers’ (1) non-conformance rate with

the RBA Validated Audit Process (VAP) or

equivalent, and (2) associated corrective action

rate for (a) priority non-conformances and (b)

other non-conformances

Information on our RBA audit program is provided

the Audits and self assessments (environment)

section above.

Details about our RBA VAP audit program can be

found in the ESG Hub

Details about the audit nonconformances can be

found here

Materials Sourcing

& Efficiency

TC-HW-440a.1

Description of the management of risks

associated with the use of critical materials

Cisco assesses and addresses supply chain

business continuity risks through its

business

resiliency program.

Cisco 2020 Environment Technical Review 64 feedback?

Appendix II – Task Force on Climate-related Financial Disclosures (TCFD)

TCFD was established to assess potential business impacts of climate change, including efforts to reduce

GHG emissions and to mitigate the impact of climate change. These impacts can potentially emerge over

a time period measured in decades and for which typical business forecasting is not well suited.

Suggested TCFD methodology focuses on evaluating scenarios. Per section B.2 of TCFD Technical

Supplement, The Use of Scenario Analysis in Disclosure of Climate Related Risks and Opportunities

It is important to remember that scenarios are hypothetical constructs; they are not forecasts or

predictions nor are they sensitivity analyses… Scenario analysis is a tool to enhance critical

strategic thinking. A key feature of scenarios is that they should challenge conventional wisdom

about the future.

Section B.2 of the Technical Supplement further explains that scenarios should be plausible, distinctive,

consistent, relevant and challenging.

The science and scenarios

The impact of increasing greenhouse gas concentrations in the Earth’s atmosphere is projected to have

increasing impacts on climate as the global average temperature increases due to the retention of energy

previously radiated into space.

The Mauna Loa CO

data shown in Figure 2 are a clear view of the potential for climate change given the

unabated increases in CO

concentrations that interfere with black body re-radiation. The Mauna Loa

data only reports on CO

. Other GHG emissions, such as methane and chlorofluorocarbons, are also

increasing, contributing to the absorption of infrared radiation emitted by the Earth.

Atmospheric CO

concentrations continue to increase and are increasing at a faster rate.

Figure 2: Atmospheric CO

concentrations at Mauna Loa Observatory

Before 1960, the rate of increase was less than 1 ppm CO

/yr. Today the increase is more than 2.5

ppm/yr, with the absolute CO

concentration increasing from around 315 ppm CO

to about 415 ppm

Extrapolating to the year 2050, CO

concentrations will likely approach or even exceed 500 ppm CO

This path to 500 ppm by 2050 has been chosen as our base-case scenario. This base case includes

GHG reduction efforts implemented worldwide to date and that may continue, but which have not had an

appreciable impact on GHG concentrations in the Earth’s atmosphere.

275.00

300.00

325.00

350.00

375.00

400.00

425.00

450.00

475.00

500.00

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

, parts per million

Year

Atmospheric CO

at Mauna Loa Observatory

~280 ppm (pre-industrial level)

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From Figure 3, the increase in CO

concentration above the historic maximum of 280 ppm has gone from

35 ppm CO

in 1960 to 135 ppm CO

in 2020 (280+35=315 ppm, the approximate CO

concentration in

1960; 280+135=415 ppm, the approximate CO

concentration in 2020).

Figure 3: Atmospheric CO

concentrations for the past 800,000 years

Per Table 3.1 of the IPCC report, Climate Change 2014 – Synthesis Report, 500 ppm in 2050 is indicative

of a 3 ºC temperature rise “more likely than not.” Continued increases in GHG concentration through 2100

would further push temperature upward. Cisco is using the “2050 base case” for its scenario construction

and risk assessment.

A second scenario is constructed projecting that, as of some future date, there will be no net impact on

GHG concentrations from Cisco operations or from its products. Although terminology such as “carbon

neutral” and “net zero” has not been standardized, “no net impact” is used to mean that, starting at a to-

be-determined future date, there would be no net increase in GHG emissions from Cisco operations or

from product manufacture, use, or end-of-life. Accomplishing such a future state would be the result of

energy efficiency initiatives, low-carbon sources of energy, and validated carbon offset mechanisms, the

latter needed to remove residual GHG emissions from any remaining use of fossil fuels.

Assuming a “no net impact” date of 2050, this second Cisco scenario is aligned with a 1.5°C 21

-century

temperature rise, relative to pre-industrial levels, described in Figure 4 from the 2019 IPCC special report,

Global Warming of 1.5 ºC

2020: ~415 ppm

~280 ppm (pre-industrial level)

Cisco 2020 Environment Technical Review 66 feedback?

Figure 4: Global total net CO

emissions in pathways limiting global warming to 1.5°C (Figure SPM.3a of

IPCC special report)

This Scenario 2 has two distinct paths:

1. Cisco successfully implements “no net impact”, as does the world

2. Cisco successfully implements “no net impact”, but global action is similar in effect as the Scenario 1 base

case

Analysis

TCFD documentation specifies two kinds of reporting. The first is four widely adoptable recommendations

for disclosure on governance, strategy, risk management, and metrics and targets, provided as Table 49.

Table 49: TCFD recommended disclosures*

Recommended disclosures Discussion

1. Governance

a) Board oversight of risks and

opportunities

The Board Nomination and Governance Committee

reviews policies and

programs concerning corporate social responsibility. Environmental

sustainability was reported to the company Board in early April 2020.

b) Management role in assessing and

managing climate-related risks and

opportunities.

The Corporate Affairs environmental sustainability team is responsible for

environmental sustainability strategy and initiatives. Currently, our facilities

(WPR/Workplace Resources), manufacturing (SCO/Supply Chain

Operations) and Engineering organizations have announced public, GHG

emissions-related goals against which Cisco reports annually in this

sustainability report. Services (Cx/Customer Experience

), Legal Regulatory

Affairs, Corporate Compliance, Finance, and Government Affairs also

support Cisco environmental sustainability efforts.

Refer to section CSR materiality for a discussion of sustainability

materiality and Table 10 and Appendix V for current and past goals,

respectively.

2. Strategy a) climate-related risks and

opportunities the organization has

identified over the short, medium, and

long term.

Summary: Physical risks from climate change are enveloped by factors

already considered in current continuity-of-supply assessments. As part of

our response to COVID-19, Cisco has demonstrated substantial resilience

to potential physical risks to operations (Cisco-owned or -leased facilities)

from climate change, where most of our workforce easily switched to

teleworking.

Our collaboration technology and associated culture facilitated

this ready migration.

Adverse weather and other environmental factors can affect our

employees in their personal lives, potentially impact business operation or

productivity. Recent examples include water shortages in India, a

prolonged freeze in Texas, and wildfires and the accompanying smoke in

California.

Cisco 2020 Environment Technical Review 67 feedback?

Many environment-related improvement efforts focus on resource

efficiency, whether water, materials or energy. Efficiency is typically driven

by improved monitoring, measurement and analysis, which requires the

use of network technologies and provides business opportunity.

More detailed discussion of risks and opportunities is provided in our

response to Section C2 questions in the CDP carbon questionnaire.

b) Business, strategy and financial

planning impact

Refer to our response to Section C3 Business Strategy questions in the

CDP carbon questionnaire.

c) Strategy scenario resilience

Cisco operations and supply chain are relatively energy, water and land

efficient with limited presence in coastal regions that may be affected by

climate change.

3. Risk

management

a) Climate risk assessment process

Climate-related input is provided to the enterprise risk m

anagement (ERM)

process, the results of which are presented to the company Board. Cisco

includes climate risk assessment details in

our response to CDP’s annual

carbon questionnaire

b) Managing risks process

Cisco uses public goals to address identified environment-related risks,

taking advantage of existing sustainability materiality assessment and

performance reporting processes.

c) Climate process integration with

ERM

Climate-

related input is provided to the enterprise risk management (ERM)

process, the results of which are presented to the company Board.

4. Metrics and

targets

a) Metrics disclosure Cisco reports climate-related metrics in our annual sustainability reporting

(this ETR). We establish goals based on sustainability materiality and use

the goal approval and release process to establish management

consensus and commitment. The seniority of management

engaged in this

process depends on the required resources and coordination across

business functions.

b) Scope 1, 2 and 3 emissions and

risks

Our Scope 1 and 2 emissions are reported in Table 20. Scope 3 emiss

ions

are reported in Appendix IV – FY20 Scope 3 emissions. References in the

Appendix to ETR report sections provide more detail for the more

significant sources of Scope 3 emissions.

Cisco’s environmental goals, including those related to GHG emissions

reduction and product energy efficiency, are provided in Table 10. Our

goals are designed to reduce significant environmental impacts, reducing

risk.

c) Targets to manage risks,

opportunities and performance

Refer to Item 4b for reference to tables detailing our publicly announced

goals and performance. Cisco is currently studying the impact of a “no net

impact” GHG emissions goal in accordance with Scenario 2 reported

previously in this Appendix II.

* from Figure 4, Recommendations and Supporting Recommended Disclosures, from Final Report, Recommendations of the

Task Force on Climate related Financial Disclosures

The second kind of TCFD-specified reporting is a description of climate-related risks and opportunities as

depicted in Figure 5 and as provided for Cisco in Table 50 and Table 51.

Cisco 2020 Environment Technical Review 68 feedback?

Figure 5: Climate-related risks and opportunities (from Figure 1 of TCFD Recommendations of the Task

Force on Climate related Financial Disclosures)

Table 50: Cisco climate-related risks and potential financial impact, per Table 1 of

TCFD

Recommendations of the Task Force on Climate related Financial Disclosures

Risks

Potential Impact

Transition risks Policy and Legal Carbon neutrality obligations from regulation, standards, customer requirement or

voluntary/proactive company action can require investing in or purchasing carbon

offsets. Projecting carbon-offset pricing is uncertain, but has increased

as more

companies take on carbon neutrality commitments. Investing in projects to develop

carbon removal could also be subject to competition to lock up startups deve

loping such

technologies.

Technology Development of more energy-efficient products may require incremental investment,

although managing energy consumption and heat removal is a longstanding design

objective

as customers fit increased network functionality into locations with fixed power

and space.

Market

Continued and growing demand for information technologies seems

likely with business

models and success tied to increasing traffic and use of secure networks, applications,

analytics, and connectivity. Required material and components for Cisco products

should not be subject to unusual cost pressures from climate change.

Reputation

Maintaining Cisco’s reputation as a socially and environmentally responsible company

with top-tier ratings in notable rankings will continue to be a company objective.

Physical risks Acute Cisco is not thought to be exposed to acute physical risks from Increased severity of

extreme weather events such as cyclones and floods.

Chronic

Cisco is not thought to be exposed to chronic physical risks from Increased severity of

extreme weather events such as cyclones and floods.

A potential impact is logistics and

disruptions to the supply chain should transportation facilities and lanes be unavailable

for extended periods.

While impact on the business physical plant may be manageable,

impacts on personnel (housing, water, power, commuting) will need ongoing

[re]assessment.

Table 51: Cisco climate-related opportunities and potential financial impact, per Table 2 of

TCFD

Recommendations of the Task Force on Climate related Financial Disclosures

Opportunities

Climate-related opportunity

Potential Impact

Resource efficiency Reduced use of virgin material;

increased use of recycled material.

Improved material resource efficiency through implementation

of circular economy principles may reduce costs and provide

alternative sources of supply.

Improved energy efficiency in operations

and extended operations (supply chain)

Investments to meet Cisco Scope 1 and 2 reduction goals

have averaged about 3-1/2 years payback, ranging from <1

year to as long as 5 years. Improved energy efficiency in the

Cisco 2020 Environment Technical Review 69 feedback?

supply chain to meet our absolute GHG reduction goal may

similarly reduce cost.

Energy source Low-carbon/renewable sources of

electricity

Reduced operating costs and less exposure to future fossil

fuel price increases. Circumstances can vary in regulated vs.

unregulated markets.

Products and services More energy-efficient products

Substantially more efficient products, such as the new

8000-

series routers, may provide an incentive for customers to

upgrade and retire legacy network gear.

This incentive may be

higher for a customer that has adopted carbon neutrality,

although many such customers have also committed to 100%

renewables, which could reduce the GHG-emissions

impact of

higher energy consumption.

Cisco solutions that facilitate improved

resource buildings, reduced business

travel, and teleworking.

Substantial working-from-home during COVID-19

demonstrated the power of remote collaboration technologies,

with the same technologies applied to telemedicine, fitness,

retail, food service, and entertainment, all at the expense of

physical travel and physical presence.

Markets Acceleration or step change in cultural

norms virtualizing many aspects life.

Refer to the row directly above (the opportunity starting with

“Cisco solutions.”)

Resilience Use renewable energy and adopt

energy

efficiency measures.

Cisco has set FY22 goals to (1)

use electricity from renewable

sources for 85% of our worldwide electricity and (2) to reduce

GHG emissions 60% (FY07 baseline) by investing more than

$45 million from FY18–22 in energy efficiency and renewable

energy.

Resource substitution Increased revenue through collaboration products that

facilitate transport substitution.

Cisco 2020 Environment Technical Review 70 feedback?

Appendix III – Supplier environmental engagement and performance

This Appendix collects our direct supplier historical progress toward managing carbon emissions and

waste reduction. Table 52 shows the progress of various categories of suppliers in reporting to CDP and

achieving key GHG-related milestones, from reporting GHG emissions publicly to setting goals and

engaging their own suppliers on GHG emissions.

Please refer to:

• Table 15 for supplier progress setting a public absolute GHG reduction target

• Table 16 for supply-chain-related Scope 3 GHG emissions and progress against our reduction goal

• Table 17 for supplier progress toward our zero waste goal.

Table 52: Supplier progress reporting to CDP and achieving key GHG-related milestones

CDP supplier reporting — climate change FY16 FY17 FY18 FY19 FY20

Manufacturing Partners

Report Scope 1 and Scope 2 GHG emissions to CDP 100% 100% 100% 100% 100%

Make this response publicly available 36% 33% 99% 95% 100%

3rd party assurance Scope 1 and Scope 2 emissions 20% 78% 99% 99% 100%

Set a GHG reduction target 100% 44% 100% 100% 100%

Engage their suppliers on GHG emissions 87% 32% 87% 86% 83%

Component Suppliers

Report Scope 1 and Scope 2 GHG emissions to CDP 82% 86% 86% 91% 86%

Make this response publicly available 62% 50% 70% 73% 76%

3rd party assurance Scope 1 and Scope 2 emissions 51% 58% 64% 60% 62%

Set a GHG reduction target 72% 64% 74% 70% 69%

Engage their suppliers on GHG emissions 47% 54% 65% 66% 69%

Logistics Suppliers

Report Scope 1 and Scope 2 GHG emissions to CDP 96% 96% 96% 95% 96%

Make this response publicly available 87% 67% 89% 95% 96%

3rd party assurance Scope 1 and Scope 2 emissions 68% 64% 62% 73% 76%

Set a GHG reduction target 90% 91% 64% 73% 71%

Engage their suppliers on GHG emissions 82% 86% 88% 85% 85%

Cisco 2020 Environment Technical Review 71 feedback?

Appendix IV – Cisco FY20 Scope 3 emissions

Table 53 provides a summary of our Scope 3 emissions. Important notes for understanding the values

provided:

• Where emissions in a Scope 3 category are significant further discussion is provided in the section

linked from the first column.

• Cisco’s fiscal year runs August through July, so the end of our FY20 is the end of July 2020.

• Each summer, companies reporting GHG emissions as part of CDP’s supply chain initiative submit data

for their last completed fiscal year for which data is available. In Cisco’s case, we report FY19 data in

the summer of 2020 (“CDP 2020”), because our FY20 data is not yet available. A similar offset may

occur for other Scope 3 reporting companies.

• CDP 2020 supply chain data was not released to supply chain members in time to support the analysis

for relevant categories in this report.

• For our response to the CDP 2021 carbon questionnaire, the numbers below will be updated to reflect

full FY20 data (or CDP 2020 data for supply-chain related emissions).

Table 53: Scope 3 emissions for FY20

Emissions category

CDP response evaluation status FY2020

(metric tonne CO

Scope 3 category 1: purchased goods

and services

Relevant, calculated 1,030,000

(uses Cisco FY20 supplier spend and

supplier FY19 emissions reported to CDP)

Scope 3 category 2: capital goods Relevant, not calculated not applicable

Scope 3 category 3: fuel- and energy-

related activities (not included in scope

1 or 2)

Not relevant, calculated 36,793

Scope 3 category 4: upstream

transportation and distribution

Relevant, calculated 430,000

Scope 3 category 5: waste generated

in operations

Not relevant, calculated 443

Scope 3 category 6: business travel Relevant, calculated 88,939

Scope 3 category 7: employee

commuting

Relevant, calculated 47,973

Scope 3 category 8: upstream leased

assets

Not relevant, explanation provided not applicable

Scope 3 category 9: downstream

transportation and distribution

Relevant, not calculated not applicable

Scope 3 category 10: processing of

sold products

Not relevant, explanation provided not applicable

Scope 3 category 11: use of sold

products (product energy efficiency)

Relevant, calculated 23,271,302

Scope 3 category 12: end-of-use

treatment of sold products (end-of-life)

Not relevant, calculated 250*

Scope 3 category 13: downstream

leased assets

Not relevant, explanation provided not applicable

Scope 3 category 14: franchises Not relevant, explanation provided not applicable

Scope 3 category 15: investments Not relevant, explanation provided not applicable

Cisco 2020 Environment Technical Review 72 feedback?

Appendix V – Past Cisco environment goals

Past Cisco environment goals are shown in Table 54. Current goals are listed in Table 10.

Table 54: Cisco completed environment goals

Date Goal

Established

Goal topic Environment goal

Final reporting fiscal

year

September 2006 Energy / GHG Clinton Global Initiative (CGI) commitment to reduce GHG

emissions from all Cisco business air travel worldwide by 10

percent absolute by FY09 (FY06 baseline).

CSR Report 2009

(p. C32)

June 2008 Energy / GHG U.S. Environmental Protection Agency (EPA) Climate Leaders

commitment to reduce all Scope 1, Scope 2, and business-air-

travel Scope 3 GHG emissions worldwide by 25 percent absolute

by end of CY12 (CY07 baseline).

CSR Report 2012

(p. F14)

February 2013 Energy / GHG 1. Reduce total Cisco Scope 1 and 2 GHG emissions worldwide

by 40 percent absolute by FY17 (FY07 baseline).

2. Reduce total Cisco business-air-travel Scope 3 GHG

emissions worldwide by 40 percent absolute by FY17 (FY07

baseline).

3. Reduce Cisco’s FY17 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 FY17.

4. Reduce total Cisco operational energy use per unit of revenue

worldwide by 15 percent by FY17 (FY07 baseline).

5. Use electricity generated from renewable sources for at least

25 percent of our electricity every year through FY17.

CSR Report 2017

(pp. 101, 102, 106

and 108)

June 2016 Energy / GHG

Avoid 1 million metric tonne cumulative of GHG emissions in our

supply chain from FY12 to FY20.

CSR Report 2019

(pp. 135, 142, 150,

152, 169 and 170)

Cisco 2020 Environment Technical Review 73 feedback?

Appendix VI – United Nations Sustainable Development Goals (SDGs)

In 2015, the United Nations Millennium Development Goals (MDGs) issued in 2000 were superseded by

seventeen Sustainable Development Goals (SDGs). The SDGs provide a shared blueprint for peace and

prosperity for people and the planet. The SDGs, their targets and indicators have a goal year of 2030.

The following tables shows how Cisco’s environmental initiatives and goals align with environment-related

(SDGs).

All environment-related SDGs are listed for clarity and completeness.

Table 55: United Nations SDGs aligned with Cisco environmental Initiatives

SDG Goals SDG description Cisco Initiatives and Goals

6. Clean Water

and Sanitation

6.3 By 2030, improve water quality by

reducing pollution, eliminating dumping

and minimizing release of hazardous

chemicals and materials, halving the

proportion of untreated wastewater and

substantially increasing recycling and

safe reuse globally

Cisco IoT products—networks, edge processing—

are used by commercial companies and

municipalities that operate water and waste

treatment plants. An example of a commercial use

is a paper mill. Our cyber security solutions protect

these systems to prevent bad actors from

interfering

with the proper treatment of water before use or

waste before release.

6.4 By 2030, substantially increase

water-use efficiency across all sectors

and ensure sustainable withdrawals and

supply of freshwater to address water

scarcity and substantially reduce the

number of people suffering from water

scarcity.

Cisco has partnered with a large food processor to

use flow sensors that match real time water usage

with ambient temperature in order to reduce water

usage per unit of production.

7. Affordable and

Clean Energy

7.2 By 2030, increase substantially the

share of renewable energy in the global

energy mix

Cisco is currently using renewables sources for

83% of worldwide electricity use (see goal, Table 10

and performance, Table 24).

Cisco has committed to reduce supply chain

emissions by 30% absolute, which will likely require

renewable and other low-carbon sources (see goal,

Table 10 and performance, Table 45).

7.3 By 2030, double the global rate of

improvement in energy efficiency

Cisco is nearing completion of our third, 5-year,

absolute Scope 1 and 2 GHG emissions reduction

goal. Achieving these reductions is due to using

low-carbon sources of electricity and investing in

hundreds of energy efficiency projects at our

facilities around the world (see goal, Table 10 and

performance, Table 20 and Table 23).

Cisco is improving the energy efficiency of our

products (see goal, Table 10 and performance,

Table 33).

Cisco switches with Universal Power Over Ethernet

(UPOE+) provide opportunity to increase building

energy efficiency through converged DC networks

and improved monitoring and control (smart

buildings).

11. Sustainable

Cities and

Communities

11.6 By 2030, reduce the adverse per

capita environmental impact of cities,

including by paying special attention to air

quality and municipal and other waste

management

Refer to the discussion of Target 6.3.

Cisco priority focus areas are mapped to the SDGs in the ESG Reporting Hub.

Cisco 2020 Environment Technical Review 74 feedback?

12. Responsible

Consumption and

Production

12.2 By 2030, achieve the sustainable

management and efficient use of natural

resources

Refer to discussion in report sections addressing

Water and Products and packaging materials.

12.4 By 2020, achieve the

environmentally sound management of

chemicals and all wastes throughout their

life cycle, in accordance with agreed

international frameworks, and

significantly reduce their release to air,

water and soil in order to minimize their

adverse impacts on human health and

the environment

Refer to discussion in report sections Materials of

concern and Product end-of-use.

12.5 By

2030, substantially reduce waste

generation through prevention, reduction,

recycling and reuse

Refer to discussion in report sections addressing

Solid waste from operations (trash) and Products

and packaging materials (see goal, Table 10 and

performance, Table 17).

12.6 Encourage companies, especially

large and transnational companies, to

adopt sustainable practices and to

integrate sustainability information into

their reporting cycle

Refer to this Environmental Technical Review.

13. Climate

Action

13.3 Improve education, awareness-

raising and human and institutional

capacity on climate change mitigation,

adaptation, impact reduction and early

warning

Refer to the discussion of Targets 7.2 and 7.3 (see

energy/GHG-related goals, Table 10

and

associated

performance tables). Refer to discussion in the

report section addressing

Energy and GHG

emissions.

14. Life Below

Water

Cisco currently has no initiatives directed at SDG 14

Targets.

15. Life on Land 15.7 Take urgent action to end poaching

and trafficking of protected species of

flora and fauna and address both

demand and supply of illegal wildlife

products

Refer to the discussion in the report section

addressing Biodiversity (including land use),

especially Species conservation.

17. Partnerships

for the Goals

17.7 Promote the development, transfer,

dissemination and diffusion of

environmentally sound technologies to

developing countries on favourable

terms, including on concessional and

preferential terms, as mutually agreed

Cisco’s core business providing network

technologies promotes low-impact economic

development and enable reduced environmental

impact through improved resource efficiency.

17.16

Enhance the global partnership for

sustainable development, complemented

by multi-stakeholder partnerships that

mobilize and share knowledge, expertise,

technology and financial resources, to

support the achievement of the

sustainable development goals in all

countries, in particular developing

countries.

17.17 Encourage and promote effective

public, public-private and civil society

partnerships, building on the experience

and resourcing strategies of partnerships

Cisco has maintained a 15-year relationship

supporting CDP (formerly Carbon Disclosure

Project) through donation of remote collaboration

technologies.

Cisco particularly values its participation in the

Corporate EcoForum and the close and valuable

engagements with sustainability leaders from many

industry sectors.

A list of energy efficiency-related organizations with

whom Cisco actively engages is provided as Table

32.

A list of supply-chain-related, environment-focused

organizations with whom Cisco actively engages is

provided as Table 14.

sco has more than 440 offices worldwide. Addresses, phone numbers, and

fax numbers are listed on the Cisco website at www.cisco.com/go/offices.

Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/

or its affiffiliates in the U.S. and other countries. To view a list of Cisco

trademarks, go to www.cisco.com/go/trademarks. Third party trademarks

mentioned are the property of their respective owners. The use of the word

partner does not imply a partnership relationship between Cisco and any other

company. (111OR)

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