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, as natural disasters such as floods, more severe and frequent weather events, longer and more severe droughts, and food shortages can be exacerbated by a changing climate. We are already seeing evidence of these events every day in the news.

How do we limit global temperature rise to 1.5°C? The world must reach zero greenhouse (GHG) gas 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 set a goal of reaching net zero greenhouse gas emissions across its value chain by 2040. When we set our net zero goal we aimed high. To support our goal, we know we need to innovate with passion and trust science.

The science behind achieving 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 and consistent transparency

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 reduction that are needed to reduce global warming.

Net zero is defined as 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 through offsets. For Cisco, our strategy to help reduce our GHG emissions includes the adoption of renewable energy at customer sites and the adoption of certain Cisco products and services by our customers.

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 – which we believe is the best way to reduce global warming and lessen the impacts of climate change.

Cisco has a long history of setting and achieving ESG (environmental, social and governance) goals. 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.

We do this so that our customers, employees, investors and others can see the great progress we are making on our various ESG initiatives, goals and commitments. We will continue to provide updates in our ESG Reporting Hub and are committed to providing our stakeholders a clear picture of our progress, challenges and learnings.

Doing what is good for the world

Cisco was responsible for approximately 23 million metric tonnes of carbon dioxide equivalent (CO2e) across all scopes of emissions in Cisco’s fiscal year 2021. That is only approximately 0.06% 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 helps lower Cisco’s Scope 3 emissions, but also helps our customers reduce their Scope 2 emissions. If you’re not familiar with the 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 these agreements help to ensure that renewable energy will be purchased over a certain amount of time.

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

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

All told, we have a number of multi-year renewable energy PPAs around the world that collectively produce more than 300,000 megawatt hours per year. We are actively pursuing additional PPAs with the intent of increasing 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 continue to 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 help capture opportunities. This is a time for thinking big, and we want to share and collaborate like never before. The only way we can help reduce 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 can help 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 reduce 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 the challenges – with you.

Visit our ESG Reporting Hub for more details on our environmental initiatives.

Scopes of emissions

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

Scope 2: emissions from electricity we buy for our operations. Examples are 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. Examples are the electricity our products consume after we sell them, our suppliers’ energy use, transporting our products, and employees commuting in their personal vehicles.

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