Net zero one year later

Solving big problems requires thinking big and setting goals that seem audacious. Cisco has achieved many bold goals over its 38-year history by relying on smart people, innovation and science.

Now that I am Cisco’s Chief Sustainability Officer, science has never been more important to me. Scientific evidence shows that climate change is an urgent crisis. If we don’t limit global temperature rise to less than 1.5° Celsius compared to pre-industrial levels, we will face dramatic consequences. Floods, more severe and frequent weather events, longer and more severe droughts, food shortages. We are already seeing evidence of these events every day in the news.

How do we limit global temperature rise to 1.5 degrees? The world must halve global emissions before 2030 and reach zero emissions by 2050. If that sounds hard, it’s because it will be. But the science says it is possible, if we act now and with urgency.

That is why one year ago, Cisco committed to reaching net zero greenhouse gas emissions across its value chain by 2040. When we set our net zero goal, we aimed high. We didn’t necessarily know how we would get there, but we knew this was the only way to make progress: by being ambitious, putting the right people in place, innovating together and trusting science.

The science behind net zero and the journey it will take to achieve it are both complex and evolving. But the reason for doing it is simple: our future depends on it.

I am pleased to share with you some of the developments around our net zero goal in the last year.

Third-party validation

In July 2022, Cisco’s 2040 net zero goal was approved by the Science Based Targets initiative (SBTi) under its Net-Zero Standard. The SBTi Net-Zero Standard is the world’s first framework for corporate net zero target setting in line with climate science.

To earn SBTi validation, companies are required to reduce their emissions by at least 90%. This requirement means we can’t simply rely on carbon offsets to achieve our goal. Having SBTi validation signals that we are committed to the deep emissions reductions that are needed to reverse global warming.

Let me back up for a moment and define net zero: it is a state where no incremental greenhouse gases are added to the atmosphere. Companies can achieve net zero through a combination of reducing their greenhouse gas emissions and neutralizing any remaining GHG emissions by removing (sequestering) an equivalent amount from the atmosphere (often referred to as using offsets).

Companies with SBTI validation can use offsets for no more than 10% of their emissions reduction. This means that we must focus the bulk of our efforts on deep emissions reductions over neutralizing – which is the scientifically sound way to reverse global warming and lessen the impacts of climate change.

Consistent transparency

Cisco has a history of being open about our goals and our progress through public reporting. We published our first Corporate Citizenship Report in 2005, and we continue to report our emissions data annually in our Purpose Report and our ESG Reporting Hub (ESG = environmental, social and governance). We do this so that our customers, employees, investors, and others can be confident that what we say is real. And we continually look for ways to improve the clarity of our reporting and the accuracy with which we calculate our emissions.

There is a major shift happening in regulations around ESG reporting right now as well. For example, in the United States, the Securities and Exchange Commission (SEC) is considering new requirements for how public companies make climate disclosures. Whether the SEC drives and truly adopts these rules or not, we are already doing the work to align to them. We believe having standardized climate disclosure requirements provides investors and others with more transparent, consistent, comparable, and decision-useful information.

Cisco recently hired a controller to focus exclusively on ESG, and we have created a working group to help identify areas to bolster controls; understand SEC climate rules, expected disclosures and other international regulations; and develop clear plans to address them.

We are choosing to enhance our ESG governance because we want our stakeholders to have a clear picture of our progress, our challenges, and our learnings. We welcome the increased scrutiny because it pushes us to continually improve our strategy and how we report on it.

Doing what is good for the world

Cisco was responsible for approximately 23 million tons of carbon dioxide equivalent (CO2e) in fiscal year 2021. That is only about 0.0006 percent of total global greenhouse gas emissions (based on 2021 IEA data), but it is still critically important for us to reduce our own emissions as much as possible. In doing so, we can have an even bigger impact by enabling our customers and others to do the same.

For example, reducing the energy consumption of our products lowers Cisco’s Scope 3 emissions, but also helps our customers reduce their Scope 2 emissions. If you’re not familiar with scopes of emissions, you can learn about them from this Greenhouse Gas Protocol image, or see our definitions at the bottom of this blog.

Increasing the amount of energy generated from renewable sources like wind and solar (“greening the grid”) is another imperative. According to the most recent Intergovernmental Panel on Climate Change (IPCC) report, “limiting warming to 2°C or 1.5°C will require substantial energy system changes over the next 30 years. This includes reduced fossil fuel consumption” and “increased production from low- and zero-carbon energy sources…”

Our products and solutions can help utility companies shift to a more low-carbon model. For example, we have worked with Enel, Italy’s largest energy provider, to create a smarter, more energy-efficient power grid. Using Cisco technology, Enel can monitor its energy grid and preemptively address any faults or failures that threaten the network, and more effectively connect to renewable energy sources.

And our efforts to increase our own use of renewable energy over the last 15 years can also help to accelerate the deployment of renewable energy systems around the world. How? Because longer-term, multi-year renewable energy agreements provide valuable funding for energy providers, making it more competitive with conventionally produced power, and ensure that the energy will be purchased over a certain period of time.

For example, to increase the amount of renewable energy we use in India, we signed two long-term solar power purchase agreements (PPA) in 2018 that deliver approximately 85,000 megawatt hours of electricity every year to the grid where our Bangalore campus is located.

Through our investments and leadership, we hope to accelerate the adoption of renewable energy and encourage other companies to invest in renewables as well.

All told, we have several multi-year renewable energy power purchase agreements (PPAs) around the world that collectively produce more than 300,000 megawatt hours per year. We are actively pursuing additional PPAs and expect to increase the amount of renewable energy we purchase through PPAs and long-term renewable energy agreements over the next few years.

Making the journey together

We will also co-innovate with our customers, suppliers, partners, and others to develop new business models that can dramatically accelerate the transition to a low-carbon economy. We know that technology advances rapidly, and we want to be ready to capture opportunities. This is a time for thinking big, and we want to share and collaborate like never before. The only way we will reverse climate change is by working together and more openly sharing practices that are working and not working, so we can learn from each other.

While we will dream big, we will still remain grounded in the science. And we will continue to evolve our approach as more mechanisms become available. We will use real data to understand what is really working, what impact we are having, and if there are any unintended consequences. The more we know, the better we can do.

Ultimately, it is not just about our net zero goal. We must build ecofriendly businesses; promote circular business models; maintain and restore the health of our land, oceans, and ecosystems; and create opportunities for people to participate in the green and digital economy. It is about helping to scale climate solutions by investing in them now. You can see an example of this in the Cisco Foundation, and how it has committed to investing $100 million over ten years in promising climate solutions.

Setting a net zero goal and naming a Chief Sustainability Officer are important steps forward. But they alone are not enough to reverse the impact of climate change. We still have much more work to do in the years to come, and as our strategy grows and evolves, we are committed to sharing the details – both the accomplishments and challenges – with you.

details on our environmental initiatives.

Scopes of emissions

Scope 1: Emissions from fuels we buy and burn within our operations. For example, natural gas used to heat our buildings, back-up generators that run on diesel, gasoline used in Cisco-owned vehicles.

Scope 2: Emissions from electricity we buy for our operations. For example, the power we use in our labs and data centers to power our equipment and keep the lights on.

Scope 3: Emissions related to our business, but that we don’t own or control. For example, the electricity our products consume after we sell them, our suppliers’ energy use, transporting our products, and employee commuting in their personal vehicles.

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