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Circular Economy and Supply Chain Excellence

Circular Economy

We are committed to moving from a linear economy, where products are used and then thrown away, to a circular economy that makes better use of our limited natural resources.

Engagement model

Established in 2018, our circular economy program operates under a dedicated program management office under the executive sponsorship of John Kern, 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.
Circular economy goals and performance
Goal FY18 FY19 FY20
GoalReduce Cisco supply chain-related Scope 3 GHG emissions by 30% absolute by FY30 (FY19 base year).1 FY18: NA FY19: Base Year: 1,720,000 metric tonnes CO2e2 FY20: We will report these numbers in fiscal 20213
Goal80% of Cisco component, manufacturing, and logistics suppliers by spend will have a public, absolute GHG emissions reduction target by FY25.4 FY18: NA FY19: NA FY20: 33%
Goal70% of Cisco component and manufacturing suppliers by spend will achieve a zero-waste diversion rate at one or more sites by FY25.5 FY18: NA FY19: NA FY20: 23%
GoalDecrease use of virgin plastic by 20% by FY25 (FY18 base year).6 FY18: Base year FY19: Not Available FY20: 26.1%
GoalReduce all foam used in Cisco product packaging by 75% measured by weight, by FY25 (FY19 base year). FY18: NA FY19: Base year FY20: 11.5%
GoalIncrease product packaging cube efficiency by 50% by FY25 (FY19 base year)7 FY18: NA FY19: Base year FY20: We will report these numbers in fiscal 2021.
GoalDesign 100% of new Cisco products and packaging to incorporate Circular Design Principles by FY25. FY18: NA FY19: NA FY20: We will report these numbers in fiscal 2021.

1 Includes allocated emissions from Cisco’s 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.

2 Due to the nature of Scope 3 targets and how emissions are calculated, we have established a standard operating process to adjust previously reported emissions totals, including the base year figure, if required. This allows us to expand the boundary of GHG emissions included in the target as we strive to improve visibility and methodology over time.

3 Due to the standard 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 (when we have the data to calculate our FY20 results).

4 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.

5 According to current standard definitions used in certification protocols, “zero waste” diversion is defined as a 90% or greater overall diversion of solid, non-hazardous wastes from landfill, incineration (waste-to-energy), and the environment. Diversion methods can include reduction, reuse, recycling, and/or compost.

6 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 (e.g., printed circuit boards). Most of these electronic components require the electrical insulating property provided by plastics.

7 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.

Circular economy initiatives and organizations in which Cisco participates
Organization Engagement areas
OrganizationCDP IT Industry Collaboration Group Engagement areasCisco 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.
OrganizationCENELEC Engagement areasCisco is actively working with CENELEC, a European standards organization, on standards for circular design.
OrganizationCircular Electronics Partnership (CEP) Engagement areasCisco is an active participant in a multi-stakeholder collaboration with seven organizations (GeSI, Green Electronics Council, ITU, PACE, Responsible Business Alliance, World Economic Forum, WBSCD) and peer companies to establish a shared vision and roadmap for a circular electronics value chain.
OrganizationDigital Europe Engagement areasCisco 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.
OrganizationEllen MacArthur Foundation (EMF) Engagement areasCisco was a founding partner of EMF, and we continue to leverage member connections, trainings, and shared learnings as a Member of EMF.
OrganizationETSI Engagement areasCisco 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.
OrganizationInternational Telecommunication Union (ITU) (worldwide) Engagement areasCisco 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.”
OrganizationPartnership to Reuse, Refill, Replace Single-Use Plastics (PR3) Engagement areasCisco 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.
OrganizationPlatform for Accelerating the Circular Economy (PACE) Capital Equipment Coalition (part of the World Economic Forum) Engagement areasCisco is an active member of the Capital Equipment Coalition, an affiliated project of PACE, which shares and publishes best practices as well as progress toward the pledges each member made in January 2018.
OrganizationProduct Attribute to Impact Algorithm (PAIA) Engagement areasCisco 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.
OrganizationResponsible Business Alliance (RBA) Engagement areasCisco 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.
OrganizationReverse Logistics Association (RLA) Engagement areasCisco serves on the Advisory Board and is a Diamond member of the RLA, a global trade association for the returns and reverse logistics industry.

Platform for Accelerating the Circular Economy (PACE) resources

Lifecycle assessments

One way we prioritize our most important environmental issues is through lifecycle assessments (LCAs). This integrated approach helps us understand the environmental impacts of our products through their entire lifecycle and informs our prioritization of material environmental issues. 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 lifecycle phase.

Our LCAs use the five product lifecycle 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

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 fiscal 2019, 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. Given the resource benefits of this simplified approach as well as the consistency in the results shown in our test LCAs done in fiscal 2019, we are now prioritizing using PAIA for LCA work. One limitation of 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 evaluate a larger share of our products using the PAIA tool.

Table 1 provides a snapshot of GHG emissions by lifecycle phase for a representative sample of Cisco products. The use phase drives our products’ GHG emissions, ranging from 81% to 95% of the total depending on product size or configuration.

Our last full LCA analyses were completed in fiscal 2019 on an IP phone and blade server. Although our phones do not use as much energy as our rack-mounted equipment, the long life of an IP phone still leads to a higher proportion of GHG emissions in the use phase, compared to emissions from the other lifecycle phases which are driven more by the weight of the product.

  • Table 2 provides a breakdown of GHG emissions by product component type
  • Table 3 breaks out these LCA environmental impact categories by lifecycle phase
  • Table 4 summarizes the relative impact across standard LCA environmental impact categories by component

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 1: Breakdown of GHG emissions by lifecycle phase for various Cisco product categories
Cisco device Lifecycle phase (percent of total emissions)
  Use Manufacturing Transport End-of-Life
Cisco deviceIP Phone1 Lifecycle phase (percent of total emissions)Use: 81.5% Manufacturing: 19.4% Transport: 0.9% End-of-Life: -1.8%
Cisco deviceChassis-based switch2 Lifecycle phase (percent of total emissions)Use: 88.0% Manufacturing: 5.2% Transport: 6.8% End-of-Life: -0.1%
Cisco deviceDesktop switch/router Lifecycle phase (percent of total emissions)Use: 92.4% Manufacturing: 6.1% Transport: 1.7% End-of-Life: -0.2%
Cisco deviceLarge chassis router/switch2 Lifecycle phase (percent of total emissions)Use: 92.7% Manufacturing: 5.6% Transport: 2.0% End-of-Life: -0.3%
Cisco deviceChassis-based router2 Lifecycle phase (percent of total emissions)Use: 95.2% Manufacturing: 3.0% Transport: 1.1% End-of-Life: 0.6%
Cisco deviceBlade-server1 Lifecycle phase (percent of total emissions)Use: 91.2% Manufacturing: 9.0% Transport: 0.1% End-of-Life: -0.3%

1 From fiscal 2019 LCA

2 From fiscal 2013 and earlier

Table 2: IP phone and blade server breakdown of GHG emissions for manufacturing phase
Cisco device Percent of GHG emissions by product component type
  Printed wiring board Integrated circuits Hard disk drive Electronics (other) Packaging Enclosure materials Assembly & test LCD screen
Cisco deviceIP Phone1 Percent of GHG emissions by product component typePrinted wiring board: 21% Integrated circuits: 40% Hard disk drive: NA Electronics (other): 14% Packaging: 2% Enclosure materials: 17% Assembly & test: 4% LCD screen: 2%
Cisco deviceBlade-server1 Percent of GHG emissions by product component typePrinted wiring board: 46% Integrated circuits: 24% Hard disk drive: 22% Electronics (other): 5% Packaging: 2% Enclosure materials: <1% Assembly & test: <1% LCD screen: NA

1 Some figures may not total 100 percent due to rounding of underlying data

Table 3: Blade server impacts by lifecycle phase (% impact)
  Lifecycle phase (percent of total impact)
Lifecycle phase
environmental impact
Use Manufacturing Transport End-of-Life
Lifecycle phase environmental impactGlobal warming potential Lifecycle phase (percent of total impact)Use: 91% Manufacturing: 9% Transport: 0% End-of-Life: 0%
Lifecycle phase environmental impactPrimary energy demand Lifecycle phase (percent of total impact)Use: 94% Manufacturing: 6% Transport: 0% End-of-Life: 0%
Lifecycle phase environmental impactBlue water consumption Lifecycle phase (percent of total impact)Use: 79% Manufacturing: 21% Transport: 0% End-of-Life: 0%
Lifecycle phase environmental impactEutrophication potential Lifecycle phase (percent of total impact)Use: 77% Manufacturing: 21% Transport: 1% End-of-Life: 0%
Lifecycle phase environmental impactAcidification potential Lifecycle phase (percent of total impact)Use: 85% Manufacturing: 15% Transport: 1% End-of-Life: 0%
Lifecycle phase environmental impactAbiotic depletion Lifecycle phase (percent of total impact)Use: 3% Manufacturing: 98% Transport: 0% End-of-Life: -1%
Lifecycle phase environmental impactSmog formation potential Lifecycle phase (percent of total impact)Use: 66% Manufacturing: 34% Transport: 0% End-of-Life: 0%
Table 4: 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
Manufacturing environmental impactGlobal warming potential Printed wiring board: 46% Integrated circuits: 24% Hard disk drive: 23% Electronics (other): 5% Packaging: 2% Enclosure materials: 0% Assembly & test: 0%
Manufacturing environmental impactPrimary energy demand Printed wiring board: 52% Integrated circuits: 34% Hard disk drive: 1% Electronics (other): 7% Packaging: 5% Enclosure materials: 0% Assembly & test: 0%
Manufacturing environmental impactBlue water consumption Printed wiring board: 26% Integrated circuits: 8% Hard disk drive: 59% Electronics (other): 6% Packaging: 1% Enclosure materials: 0% Assembly & test: 0%
Manufacturing environmental impactEutrophication potential Printed wiring board: 44% Integrated circuits: 20% Hard disk drive: 31% Electronics (other): 4% Packaging: 1% Enclosure materials: 0% Assembly & test: 0%
Manufacturing environmental impactAcidification potential Printed wiring board: 38% Integrated circuits: 51% Hard disk drive: 26% Electronics (other): 9% Packaging: 1% Enclosure materials: 0% Assembly & test: 0%
Manufacturing environmental impactAbiotic depletion Printed wiring board: 39% Integrated circuits: 51% Hard disk drive: 0% Electronics (other): 9% Packaging: 0% Enclosure materials: 0% Assembly & test: 0%
Manufacturing environmental impactSmog formation potential Printed wiring board: 17% Integrated circuits: 9% Hard disk drive: 71% Electronics (other): 3% Packaging: 0% Enclosure materials: 0% Assembly & test: 0%

Packaging

In an ideal 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 with strong cushioning. Products that are damaged in transit create additional negative business and environmental impacts, since repairing or replacing a damaged good requires significant resources.

To support Cisco’s commitment to sustainable packaging, we announced two new goals in fiscal 2020 focused on reducing the use of foam and improving product packaging efficiency. See Table: Circular economy goals and performance for more information.

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 fiscal 2020, we redesigned the packaging for our Carrier Routing System Performance Route Processor and Fan Controller spares by redesigning the foam cushions and carton. This reduced the dimensional weight of the spare pack while also reducing nearly two pounds of foam overall 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 impact 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/cube efficiency during transport
  • 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.
Table 5: Focus areas for sustainable packaging and fulfillment solutions
Category Benefits Initiatives
CategorySecondary product configurable options Benefits Reduce materials, packaging, and shipping costs by providing customers with a way to opt out of receiving cables, brackets, and similar items. Initiatives

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.

CategoryElectronic delivery of software, licenses, and product documentation BenefitsIncrease dematerialization and operational efficiencies. Reduce CDs, paper, and packaging. Reduce packaging and fulfillment costs. InitiativesThe 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.
CategoryMulti-packs BenefitsReduce packaging and shipping costs and increase operational efficiencies by shipping products in multi-unit packaging InitiativesBulk-pack models are available for select high-volume products or spares, including cables, optics pluggables, memory, central processing units, hard drives, fans, and rack gear kits.
CategoryWaste reduction BenefitsReduce amount of packaging being used on Cisco products. InitiativesImproved product testing have led to a reduction in the amount of packaging needed to protect products. Designs have been optimized to reduce corrugate, paper, and foam.
CategoryUse of recycled materials BenefitsReduce the amount of new materials required to produce our packaging while diverting waste from landfill. InitiativesSourcing alternative materials with recycled content, such as molded fiber and thermoform cushions.

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.