Sustainability is a value that many companies want associated with their brands, whether it is due to their own ideals or awareness of the effect it can have on their reputation with increasing transparency about environmental impacts of businesses. For that reason, many companies seek out ways to improve processes and reduce their carbon footprint. But the real challenge is ascertaining that their suppliers are doing the same. That's a goal that Cisco is working on now.
Cisco has made environmental sustainability a priority for a number of years now and has garnered a number of award for its achievements. This year, it was given the Climate Leadership Award for Supply Chain for a number of achievements listed by the EPA as follows:
Setting a GHG emissions reduction goal of 40% by 2017 from 2007 levels; building on a reduction of 38.7% between 2007 and 2012. Encouraging its suppliers to have strong sustainability programs, with a focus on 130 key suppliers that account for more than 80% of its supply chain expenditure. By the end of 2016, Cisco aims to have 100% of its key suppliers report their GHG emissions and 75% of them set GHG emissions reduction goals. Using a management system to set targets, plan and prioritize actions, monitor progress, and continuously improve on GHG emissions through its Supply Chain Sustainability Program. Launching a GHG reduction program in 2015 to refine and accelerate the company's emissions prioritization, reduction, and reporting efforts. In total, approximately 413 metric tons of material (corrugated board, plastic, wood, and other packaging materials) and 6,402 metric tons of CO2e were avoided in FY15. Installing sensors in a manufacturing partner's plant in Malaysia to see how monitoring energy consumption can inform decision-making and drive energy efficiency.
Pushing further in the direction of supply chain cooperation, a couple of months after receiving this award, Cisco announced a new sustainability goal for the year 2020. It intends to eliminate "one million metric tonnes of greenhouse gas (GhG) emissions" that are associated with their "outsourced manufacturing and logistics." It's a first for the company in terms of extending their GhG targets to "the supply chain activities that Cisco directs or influences."
As Kathleen Shaver, Director of Value Protection for Cisco Systems writes in Cisco: Partnerships, Shared Value Key to Driving Emissions Reductions Throughout a Supply Chain:
One of the key differentiators for Cisco lies in how we are tackling carbon reduction in a fully outsourced supply chain, and doing it in a way that is measurable and auditable. Being an outsourced global supply chain means we are faced with both challenges and opportunities to reduce the carbon footprint associated with our products.... it's imperative that our internal teams, partners and suppliers understand from the very beginning that, in addition to cost, quality and delivery, reducing emissions is also a priority.
Technology makes this possible, not just in the case of the sensors that Cisco uses on its own factory in Malaysia, but also in uploading data for greater transparency. As we saw in the discussion of the CDP's partnership with the Electronic Industry Citizenship Coalition (EICC) in Data Drives Down Carbon in the Electronic Supply Chain, this kind of collaboration is built on the data obtained and communicated through digital technologies. They are the basis of "transparency, traceability, real-time information exchange, and collaboration between partners in supply networks.'"
That kind of collaboration based on real time data is essential to coming up with a baseline and realistic expectations for improvement to build a sustainable plans for Cisco's supply chain partners. As Shaver explained: "It's based on product lifecycle assessments, extrapolated CDP supply chain carbon "inventory" and case studies developed under the supervision of a robust team of supply chain subject matter experts. "
In addition to inspiring cooperation in achieving sustainability goals for its partners, Cisco's achievement can also serve as a model to other companies that realize a real commitment to improving operations requires cooperation and collaboration with partners in the supply chain.