Electronic waste is an important environmental issue that has been the focus of increased regulation over the past five years. In addition to complying with these regulations, Cisco is establishing our own product end-of-life management and asset-recovery programs to reduce this waste while also generating revenue and returning value to our shareholders. Establishing commercial incentives for reuse and increasing asset recovery rates is a central part of our strategy to improve our end-of-life management practices.
Asset and Value Recovery Programs
Cisco has developed a tightly controlled, closed-loop reverse supply chain, ensuring that environmental responsibility results in financial benefits for Cisco and our shareholders. Cisco takes back and provides resources for recycling all our products in major markets worldwide. Whenever possible, we refurbish returned products and make them available to internal groups throughout the company. For products that cannot be reused, we work with waste-recovery partners to reduce the quantity of nonrecyclable material that ends up in landfill. Less than 2 percent of Cisco’s returned electronic equipment goes to landfills.
Last year, we received $275 million worth of Cisco product returns globally, about 65 percent of which were the result of the Cisco Technology Migration Program. This program encourages end-of-life product returns by offering customers a discount on new products in exchange for returning their existing equipment. We also take back products as the result of other customer returns, service parts inventory, supplier excess inventory, and internal scrap.
All product returns are channeled through the value recovery process so they can be redeployed as an alternative to recycling. Of the $275 million in product returns in FY08, approximately 57 percent were redeployed. This represents a growth of 63 percent in value recovery from FY07 to FY08. Products that are not redeployed are sent through a world-class recycling process that captures additional value through recovery of precious metals and plastics. Less than 1 percent of nonrecyclable material ultimately ends up as true scrap. During FY08, we recycled 10,249 metric tons of electronics materials, representing a 44-percent increase in our performance over FY07.
In FY09 we plan to continue to expand our programs in emerging markets and increase our value recovery by 10 percent.
Reusing Equipment to Avoid Waste and Save Money
The Cisco Technical Assistance Center in Gurgaon, India, is a good example of how Cisco has succeeded in implementing environmental stewardship through reuse of equipment, yielding both ecological and financial benefits. Approximately $10 million worth of refinished, high-quality equipment was used as capital to establish and rapidly equip a large organization with a small budget. The lab equipment included high-end routers, switches, wireless products, phones, and optical devices with dedicated racks. In the highly competitive environment in India, the equipment now allows 150 engineers to handle 10,000 service requests per month from around the world.
View a video on Cisco’s product end-of-life and reuse management called “Takeback and Recycle Program“:
http://tools.cisco.com/cmn/jsp/index.jsp?id=78372
Regulatory Compliance
Cisco’s take-back and recycle program meets the requirements of the European Union (EU) Waste Electrical and Electronic Equipment (WEEE) Directive. All Cisco products in EU countries can be returned to Cisco at no cost to the customer or partner. Cisco is working with trade associations, regulators, and regional organizations, including the European Information and Communications Technology Industry Association and the U.S.-based Information Technology Industry Council, to effectively and efficiently implement regulations concerning electronic waste. Cisco actively contributes to the United Nation’s Solving the E-waste Problem program and the Global e-Sustainability Initiative.
Designed for Extended Life
Extending product life conserves materials and reduces environmental impact. Cisco’s modular approach to system design allows for the easy upgrade of network interface and processor boards and the continued use of the existing system chassis and back planes. As a consequence, many product chassis built and shipped 10 years ago are still in use today.
Cisco product warranties enable customers to return nonfunctioning parts for reuse and recycling. Our products are designed to be:
- Compatible with previous and future versions of Cisco’s network components, so obsolescence is minimized
- Complementary with standard chassis dimensions, so customers can use their existing equipment racks
We also gain efficiencies by endeavoring to deliver exactly what our customers need. Last year we saved as many as 2.7 million sheets of paper and approximately $1.9 million by providing product documentation on CDs and making it available online. To help prevent waste, we give customers the option of not having to purchase certain product accessories that they may not need. Streamlining our product distribution and return logistics reduces transportation requirements, lowers greenhouse gas emissions, and saves money.
