IT giant Cisco has a good story to tell, but could report on targets better

Cisco ranked second after Google on the Greenpeace 2012 global Green IT leader board. It achieved this for good progress towards its energy reduction goal for 2012 and for its clear and transparent programme to reduce its own carbon footprint, while also engaging its supply chain in carbon emission reductions.

This achievement may serve to explain chief executive John Chambers’s introduction to Cisco’s seventh sustainability report, in which he states: “No other company possesses our commitment to manage the social and environmental aspects of our business in our characteristically ethical and responsible way.”  

A rather bold statement, but somewhat borne out by Cisco’s advances in sustainable information and communication technology. Cisco’s tagline “you + networks = impact multiplied” demonstrates Cisco’s careful positioning on the sustainability radar: leveraging networking technologies to deliver transformation in work processes and social impacts, using ICT to decouple economic growth from energy consumption.

Cisco’s report boasts that in 2011 there were 23m hours of usage of Cisco’s TelePresence and WebEx platforms – removing the need for travel to face-to-face meetings. The company says that 42% of global ISO14001 audits were performed using online collaboration tools.

Cisco’s flagship programme in China – Connecting Sichuan – created an IT infrastructure in 66 healthcare facilities to help rebuilding efforts following the 2008 earthquake. This includes 32 “smart” hospitals, cloud-based healthcare data centres, mobile clinics and telehealth networks used by 7,000 healthcare professionals and 300,000 patients per month.

A strategic collaboration between Cisco and the Jordanian government improves access to quality healthcare services in Jordan. Cisco reports that, after two months, patients who had remote access to specialists noticed improved diagnosis and treatment plans.

Another example is the culmination of a three-year initiative and $10m investment to support the development of the Palestinian ICT sector, which has delivered measurable business growth for participating Palestinian companies and 40 Palestinian network engineers employed by Cisco. These core-business solutions to leverage ICT platforms are truly transformational and form the nub of Cisco’s sustainable business strategy.

Engaging (fewer) employees

Network technologies are leveraged within the Cisco organisation. More than 20,000 employees are connected with home virtual office installations that enable telecommuting and reduced business travel. Despite this, Cisco saw overall employee engagement drop from 87 in Pulse survey results in 2009 to 79 in 2011, a concerning trend.

This has no doubt been influenced by the drop in Cisco’s business performance in 2009-10, which led to a major company restructure in 2011, reducing the global workforce by 9% – amounting to 6,500 layoffs. Cisco’s report deals with the layoffs head-on, not shying away from stating numbers, and identifying four organisational programmes that are being pursued to revive employee trust and engagement.

Cisco’s transparency on supplier performance is less impressive. Almost 100% of Cisco’s manufacturing is outsourced.

The company engages with suppliers on sustainability performance, such as requiring 1,500 top suppliers to report to the Carbon Disclosure Project. It has a supplier code of conduct that requires supplier audits. Such audits in 2011 revealed 107 major compliance violations, of which 49% related to labour, health and safety standards, and 178 minor compliance issues. Cisco does not report the number of audits conducted, the number of non-compliant suppliers, or the action taken with these suppliers as a result of consistent failures to meet standards. Supplier names are not disclosed.

That said, Cisco’s report is nicely presented in a Web 2.0 interactive PDF that contains hyperlinks and embedded videos throughout. The style is business-like and efficient. Each section of this GRI B level report concludes with a set of aspirational-type objectives (but no quantified targets) under the headline Looking Ahead.

For stakeholders interested in Cisco’s reporting, there may be some additional items to add to the Looking Ahead list.

First, materiality – Cisco reports conducting a formal third-party materiality analysis in 2011 that yielded 23 issues of interest – but these issues are not shared in the sustainability report.

Second, supply chain compliance – Cisco reports headlines but no meaningful detail.

And third, assurance – Cisco states “we continue to explore the viability of external assurance” as a reason for not engaging a third party to verify its reporting. After seven years of reporting, one might expect Cisco to conclude this exploration in time for the 2012 report publication.

Looking ahead, we can expect continued “impacts multiplied” reporting from Cisco, and hopefully a little more “transparency multiplied”.

Elaine Cohen is a sustainability consultant and reporter at Beyond Business, and she blogs on CSR issues.