Case studies

At Cisco, we know first-hand the value of fostering collaborative relationships with our suppliers to drive ESG outcomes. When one of our suppliers rolled out a new sustainability program and expressed an openness to learn from Cisco on ESG, we recognized this as an opportunity to pilot a new partnership model to help build their capabilities. We initiated quarterly ESG-focused touchpoints with their sustainability team to support their efforts.

This partnership model set the stage for open, transparent conversations about challenges and various paths towards improvement. Cisco shared valuable lessons learned from our own journey, such as overcoming the challenges of greenhouse gas (GHG) emissions accounting or standardizing ESG-related data. In return, the supplier's sustainability team provided insights into their sub-tier supplier management efforts around GHG reduction and industry-level climate work they were involved in.

Our conversations advanced to forward-thinking dialogue about tackling shared challenges, the industry’s future trajectory, and ways to stay ahead of the curve. For example, at the start of our engagement, the supplier had not yet set an absolute GHG reductions goal, a Cisco requirement and common industry expectation, but it had committed to setting a Science Based Target to reduce GHG emissions and was in the process of developing the goal. The collaboration enabled open sharing between Cisco and the supplier of common experiences and lessons learnt on climate target setting and roadmap development . Today, the supplier’s target has been formally approved by the Science-Based Target Initiative (SBTi), which means it is in line with the latest climate science, and the team is ramping up its own supply chain engagement program around GHG reduction. The supplier continues to report its climate progress publicly through annual sustainability reports, CDP, and is collaborating proactively with Cisco to discuss strategies to achieve the established emissions reduction goals.

Cisco’s journey towards net zero and advancing other ESG goals is linked with our suppliers’ progress. Collaborating with our suppliers to understand and address their unique challenges has proven to be an effective model for strengthening business relationships and co-innovating solutions that drive mutual environmental and social progress.

Our “no fees” policy prohibits the charging of recruitment fees to workers, and if we discover that workers have paid fees, we work with suppliers to facilitate repayment to workers. Sometimes, by the time the supplier has initiated repayment of fees to affected workers according to an agreed-upon remediation plan, some workers no longer work for the company. We became aware of a situation like this in fiscal 2023, when a worker reported to Cisco’s EthicsLine that they had not been compensated for the recruitment fees they paid.

Cisco worked with the RBA to cross-reference who had already received payments. We discovered that the worker was correct, and that they were not alone in having missed out on reimbursements from switching employers. This led to deeper discussions with our supplier on how they were handling reimbursements for departed workers. In line with our commitment to nonretaliation, RBA and Cisco obtained consent from impacted workers before identifying them to the supplier so that the supplier could make reimbursements.

Along with the RBA, Cisco is working to help impacted workers receive access to repayment, and the supplier is making greater efforts to connect with departed workers. This situation highlighted the importance of Cisco-supplier collaboration and the need to support suppliers in making good faith efforts to correct issues. It was also a reminder of the role of effective and accessible grievance mechanisms, like EthicsLine, in driving access to remedy for supply chain stakeholders.

FY24 Update

During fiscal 2024, we continued to engage the departed worker who filed the grievance and the employer. The factory had increased efforts to contact departed workers. However, the RBA received grievances from two different workers. Both workers alleged they were entitled to reimbursement but were missed due to the timing in which they were transferred between the business units and the timing of the investigation. RBA, Cisco, and the supplier continue to collaborate to address the issue so that the remaining impacted workers can also receive access to remedy. The worker who had filed the grievance was able to provide names and contact information for another 19 departed workers who were also eligible to receive reimbursement. In total, we were able to facilitate the reimbursement of 31 workers who had departed the supplier. Engaging with the worker who came forward was critical to being able to reach as many impacted workers as possible. As a result, 49 more workers were able to be reimbursed in the last year.

In fiscal 2022, the Supply Chain Sustainability team at Cisco received a complaint through Cisco's grievance mechanism, EthicsLine. A supply chain worker alleged that their employer was a supplier to Cisco and that they were subjected to a variety of forced labor issues, including passport withholding, recruitment fees, and penalties for resigning.

Cisco reviewed the worker's allegations and opened a formal channel to directly communicate with the worker to gather more information and receive periodic updates. In conjunction with this conversation, Cisco reviewed our business relationships with the supplier and identified it as a "low-spend" components supplier—a supplier that provided parts to Cisco's manufacturing partners. Due to low spend and lack of visibility into sub-tier relationships and data on worker characteristics, Cisco had not included the supplier in our vulnerable worker risk assessment as part of our usual course risk-based process. However, in light of the worker complaint, Cisco engaged with the supplier and confirmed multiple elements of the allegation.

Cisco took immediate action to address the allegations, including putting the supplier on a Supplier Improvement Plan, an internal Cisco process aimed at improving supplier performance to comply with our standards and policies. To ensure a comprehensive investigation and thorough mitigation plan, Cisco alerted and engaged the RBA, which conducted a Specialty Validated Assessment Program (SVAP) on forced labor. The RBA garnered industry support and used collective leverage to show the supplier that they would have to conform to a consistent set of conditions and industry standards. The industry approach minimized confusion for the supplier and meant a single entity would drive the fulfilment of the Corrective Action Plan.

The plan mandated the following changes:

• A timeline to reimburse employees
• Updates to policies to prohibit fees paid by workers
• Revised worker contracts to remove a requirement that workers pay fees
• Revised labor agent contracts to prevent fees from being passed onto workers and removed other restrictions agents put on workers

Cisco is continuing to work with the RBA to monitor the supplier site's progress toward remediating the affected workers and to validate that the corrective and preventive actions were implemented effectively.

This case brought forward a host of lessons learned. We continue to find power in collective action, especially when it comes to driving change with suppliers with which we have low leverage. We also continue to explore how broader education of suppliers and direct engagement with labor brokers and affected workers can drive elimination of forced labor within the supply chain, especially where local law on issues such as charging recruitment fees conflicts with international standards and best practices.

Inspired by our learnings from the TenSquared program, Cisco has now piloted our own worker engagement initiative. When we discover that a supplier is nonconformant due to personal protective equipment (PPE) issues, we ask suppliers to involve their workers as part of their Corrective Action Plan (CAP). We support the supplier with guidance and materials, such as sample surveys and a root cause analysis tool, so that they can engage workers and gather their input in developing solutions. We piloted this initiative in fiscal 2023 and have continued it throughout fiscal 2024, learning valuable lessons along the way.

Encouraging suppliers to involve their workers in developing longer-lasting health and safety solutions has driven some notable outcomes. For example, one supplier had a Major nonconformance because workers were not wearing specialized carbon masks needed to filter out hazardous fumes. With Cisco’s guidance, four site leaders and six workers established a focus team to resolve the issue, setting a goal that 100% of the 750 workers would wear the required masks when entering production areas. By surveying a sample of 29 workers, it was revealed that workers weren’t wearing masks consistently because they were uncomfortable. Complaints included small and stiff ear straps, hard metal boning across the nose, a lack of size options, and itchy material that was subject to pilling quickly. The focus team considered these factors as they evaluated various alternative mask brands and selected the most comfortable options. Then, the site conducted a trial run for all 750 employees and provided education regarding how the mask would protect them from fumes during production. Finally, to foster a culture of peer-enforced safety, the workers from the focus team help monitor production areas to ensure employees are regularly wearing the masks properly and following protocol.

After the trial, surveys showed that workers were satisfied with the new masks. It was time to embed the new equipment and practices into formal procedures. All workers received a special instruction form outlining the importance of wearing PPE and signed an acknowledgement showing they understood the protocol. Not only were workers pleased with the changes, but factory management saw the value of workers’ ideas, recognizing that this collaborative approach would lead to more sustainable solutions than just issuing warnings. They plan to expand this model to address other environment, health, and safety issues in their facility.

So far, Cisco has implemented this model of incorporating worker voice in health and safety CAPs management across nine different sites, with eight sites resolving their nonconformances leveraging this model during fiscal 2024. Overall, this work resulted in 10 different pieces of PPE being upgraded based on workers’ feedback, improving the health and safety of more than 1300 workers in our supply chain. Despite our successes, Cisco has found that not all factory sites are eager to adopt this model, preferring traditional top-down management approaches to resolve nonconformant findings. To help overcome this resistance, we set regular touchpoints with suppliers to coach them throughout CAP closure. We aim to continue scaling this worker engagement model throughout fiscal 2025 to empower more workers across our supply chain.

In fiscal 2024, three supplier sites participated in TenSquared with the goal of reducing workplace risks. Since fiscal 2022, 10 Cisco supplier sites have participated in TenSquared and have engaged over 4100 workers to participate in the problem-solving process resulting in longer-lasting solutions.

Cisco and another industry peer jointly deployed TenSquared at three supplier sites during fiscal 2023. The 10 participants at each site—five managers and five front-line workers—worked together to identify a health and safety issue and then come up with a durable solution that would outlast the 100 days.

One solution the team chose to tackle was appropriate use of personal protective equipment (PPE). At one supplier site, available PPE was going unused, and worker feedback revealed that the available equipment was uncomfortable and poorly fitting. The group decided that managers would buy different types of PPE, and workers would vote on the most comfortable options. This led to greater use of the equipment, with more than 180 workers wearing protective footwear and 56 wearing more comfortable safety goggles. Learning from this solution, Cisco adopted new practices as part of its corrective action planning process whereby workers are consulted regarding findings related to PPE–in essence extending these positive outcomes beyond this one supplier site. Since implementing these new practices, Cisco has engaged four factories around their PPE-related audit findings, and one has already switched to face masks that workers found more comfortable. This change is expected to impact more than 750 workers.

At another site, workers use carts to transport printed circuit boards for temporary storage after they are assembled. A worker suggested locking carts to the staging area—a solution that can not only protect products from falling and save money, but also prevent injuries to workers.

Deploying TenSquared revealed that greater worker engagement can yield solutions to tough workplace issues. It increases managers’ awareness of workers’ abilities to contribute solutions, meanwhile helping workers feel more comfortable sharing their ideas.

“TenSquared is a very good project,” said one participant. “It didn’t just help us improve health and safety issues, but also helped us understand that good ideas are in workers’ heads. Once we find out about those good ideas, we can help each other and build up mutual trust.”

Cisco will continue TenSquared in fiscal 2024 to help these three suppliers sustain their achievements.

Engaging supply chain workers is crucial but not always easy. To help facilitate dialogues with supply chain workers, Cisco in fiscal 2022 partnered with the nonprofit Social Accountability International (SAI) to implement its TenSquared program—a 100-working-day engagement effort that brings together supply chain workers and managers to collaboratively identify and address challenges on occupational health and safety.

As part of our emphasis on industry collaboration, Cisco and another industry peer jointly deployed the TenSquared program at four supplier sites in fiscal 2022. There were 10 participants at each site—five managers and five front-line workers—who worked together over the 100 working days to jointly identify an issue and achieve a goal focused on occupational health and safety. Workers and managers were tasked with creating systemic solutions that would last beyond the duration of the TenSquared program.

Ahead of the program's launch, the 10 members at each site held pre-project meetings to finalize and introduce team members. Subsequent two-day launch workshops were held, where the teams raised issues of concern, such as operational safety rates, noise levels, and chemical and hazardous chemical risk exposure rates, and started brainstorming ways to tackle them. During the next several weeks, teams came up with ideas to tackle their chosen problems, review the challenges, and adjust the plan during a midpoint review workshop. The program ended with a sustainability review workshop to ensure the supplier sites could embed key TenSquared themes and implement its methodology, either through additional workshops or other occupational health safety mechanisms.

Overall, Cisco was proud of the breadth and depth of solutions that the program sparked:

• One of the suppliers focused on increasing workers' occupational health and safety behavior rate from about 80 percent to about 95 percent in a pressing production workshop. The supplier site has maintained that improved rate into fiscal 2023. A key innovation the workers requested was to designate personal safety observers who wore blue vests and who could support workers in maintaining proper health and safety behaviors during every shift, day or night. This uniform became a visual reminder for workers, especially those new to the factory floor, to follow steps to safeguard their health and safety. This simple action has encouraged both managers and workers to continue to work together to ensure that safety is a priority.
• In addition, they trained workers to take more responsibility around health and safety by helping determine if their workplace was safe or not. Managers invited workers to help brainstorm and devise workplace safety solutions, including having workers observe and flag safety precautions. Workers agreed to rotate this observer role so that each worker could have the opportunity to perform and watch the implementation of safe behaviors. By engaging more workers in a practical way, the supplier found that workers prioritized safe behaviors and even reminded colleagues to do the same. In essence, the training created a culture of safety rooted in worker inclusion and buy-in that has been sustained with new hires who joined during and after the TenSquared workshop.

The program team from the four suppliers provided positive feedback from the workers and managers, which convinced Cisco to continue this program in fiscal 2023. Feedback we received included:

• “The methodology has improved the factories' original management weaknesses.”
• “This program is more useful than internal OHS training and is very interesting.”
• “100 days is too short; we wish we could have more opportunities to exchange ideas.”
• “Nice to hear from workers that they need more training and info on hazardous materials.”

Using TenSquared revealed that greater worker engagement yields sustainable solutions to tough workplace issues. In addition, bringing together workers and managers improved overall communication, with management becoming more aware of workers' ability to contribute solutions to many onsite issues. The collaborative framework of TenSquared created a mechanism whereby workers feel more comfortable sharing their ideas, and where workers can get recognized for innovation. Workers also feel more empowered since they have a better understanding of the purpose of health and safety policies and procedures. The workers thus see how their adherence to and participation in workplace safety results in an overall safer environment. Cisco will continue TenSquared in fiscal 2023 to help these four suppliers sustain this program methodology and will partner with additional suppliers to expand the program's benefits.

“Working with Cisco's suppliers was unforgettable and meaningful because of Cisco's deep understanding of the project and creation of an open and independent innovation space for suppliers. This was very helpful to the workers' efforts, helping their voices be heard and actions accounted for. The most exciting changes and the most encouraging achievements took place during these short 100 days. We appreciate Cisco's leadership in making this opportunity available in their supply chain.”

Jane Liu, Senior Manager, SAI

Cisco aims to improve working conditions in our supply chain, including identifying and auditing “high risk” suppliers to ensure they comply with the company's Supplier Code of Conduct. This includes protecting workers between the ages of 16 and 18 who are legally permitted to work in the relevant jurisdiction, specifically against the types of work that could negatively impact their health, such as overtime and night shifts.

Cisco considers young workers a vulnerable group alongside others such as migrant workers and marginalized peoples. We make extra efforts to identify and mitigate risks at the manufacturing and components suppliers who employ them. Our Juvenile Labor Policy and Expectations outlines how we protect workers between the ages of 16 and 18.

In April 2021, Cisco conducted an RBA audit of a component supplier site that was identified as high-risk in our annual assessment and with whom we had low spend and low leverage. This audit uncovered that managers were having their young workers work overtime and night shifts, which is not allowed under Cisco's Supplier Code of Conduct. In addition, the site did not register all juvenile employees at the local labor administrative department, which is a violation of local legal requirements. There were also other labor and health and safety issues at the component supplier site.

As part of the Corrective Action Plan, the site registered all the young workers with the local administrative authorities, but refused to immediately resolve the overtime and night shift for these workers, citing regional labor shortages. To address Cisco's expectations, the site chose to reassign workers from Cisco designated production lines to another part of the factory rather than stop them from working overtime and night shifts, raising a red flag for Cisco. Cisco persisted in asking for the cessation of all overtime and night shifts for the young workers—not just shifting workers so that they were not linked to building Cisco products. In subsequent discussions, the supplier proposed a mitigation timeline of several years to replace the younger workers with age-appropriate workers. This solution again did not satisfy Cisco's requirement for an immediate resolution. Cisco persisted and in December 2021, Gordon Buckle and his team from Global Supplier Management held steadfast to Cisco's expectations and Cisco and the supplier were able to foster a path forward.

Cisco's persistence successfully led the supplier to resolve the issue; continuous escalation through supply chain management and continued focus on full conformance to our standards is what finally drove the supplier to fix their nonconformance. A final review by Cisco's supply chain sustainability team validated that all overtime and night shifts for young workers were stopped in June 2022 with the supplier providing sufficient evidence to prove that the issue had been resolved.

“Cisco has a Purpose to Power an Inclusive Future for All. We believe in a world with equal access to opportunity, a world in which businesses operate with all aspects of society in mind,” said Buckle, Head of Specialty Technologies, Global Supplier Management. “Cisco prides itself on using its supply chain to catalyze positive impacts for people and communities, and this situation showed that Cisco's persistence could create better outcomes,” he said.

Cisco continues to ensure that vulnerable workers, such as young workers, while not a large portion of the overall worker population, are protected and not mistreated.

Working hours and days of rest continue to be a chronic issue in the electronics industry supply chain and our most frequent audit nonconformance category.

As a result of the Human Rights Impact Assessment we conducted at the end of fiscal 2023, we began to identify and assess how Cisco could be contributing to working hours fluctuations in the direct materials supply chain with an aim to prevent excessive working hours. We convened a cross-functional team to identify factors that could contribute to suppliers’ working hours nonconformances. The team assessed factors, such as supply shortages, forecast accuracy, production goals, rush orders and lead times, and contractual terms, to see their potential influence on working hours at manufacturing and logistics partners over the past year. The team’s analysis surfaced several factors that impacted workers and production capacity: COVID-19 affected the number of workers who were able to work on the production floor; materials shortages sometimes slowed down or disrupted production; and increased demand put a strain on production planning and targets. These factors, alone or in concert, could make recovery to normal working hours more difficult.

With this variety of factors affecting production schedules and planning, Cisco worked during fiscal 2024 to smooth production spikes and make production planning more predictable.

For example, if materials arrived late and caused production delays, overtime was likely needed to catch up with the production plan and meet deadlines, potentially triggering short-term spikes in working hours. To mitigate, Cisco has worked to build material safety stock or extra inventory on-hand to reduce the risk of disruption due to materials shortages.

Cisco has also been working to simplify the manufacturing of our products. We have simplified our network, or the number of manufacturing sites that build Cisco’s final products, resulting in a consolidation of business volume across fewer facilities. We have also simplified manufacturing processes to increase throughput and implement universal production lines where possible. These provide benefits to our manufacturers by allowing them to better plan and utilize their capacity. The higher baseline production volumes should provide more stability over time, reducing the likelihood they will be significantly impacted by erratic demand fluctuations for niche product lines.

Cisco has worked to provide manufacturing partners with increased visibility into the forecast pipeline, extending that visibility from less than one year, to a rolling 24-month window across the Cisco hardware product portfolio. Updated monthly, these forecasts could provide manufacturers with a longer-term outlook on demand within the pipeline and help support materials and capacity planning.

When Cisco forecasts, it aims to give manufacturers the most accurate outlook. When there are projected discrepancies in forecasts and the actual customer orders, Cisco’s supply chain works with the sales organization to analyze the differences. We then quickly adjust so manufacturers have the most accurate outlook and mitigate potential challenges. The difference between forecast and actual is reviewed on a quarterly basis in an effort to make continuous improvement of estimates.

It is challenging to determine how much impact any of these singular actions make on smoothing production spikes and production planning, especially since Cisco continued to see the lingering effects of the COVID-19 pandemic on supply chain operations through the first half of fiscal 2024. However, we are optimistic that these actions, in addition to collaborating closely with manufacturing partners, support both Cisco’s and our suppliers’ goals for more feasible and predictable production targets, and consequently, optimized staffing and reductions in last minute changes to overtime.

During fiscal 2022, Cisco discovered that one of our third-party contract manufacturers' locations was experiencing persistent working hours nonconformances for several quarters in a row. As part of our due diligence, we worked to understand why. During the discovery process, Cisco brought together stakeholders from the contract manufacturer and Cisco's internal operations and production planning departments to identify the root causes. It was revealed that multiple factors were at play: late shipment arrivals were prompting overtime work on weekends, lengthening consecutive working days; order backlogs created pressure to manufacture products outside of planned production schedules to meet customer expectations; and labor shortages exacerbated the situation. In addition, there were plant-wide shared staff—emergency personnel—whose total number of hours were not being accounted for.

As a result, both Cisco and the manufacturer collaborated to implement short-term solutions to reduce working hours and eventually prevent excessive working hours over the longer term. While there were robust communication channels to address production needs, there were less robust channels open around the impacts of variable working days, such as holidays, and their impact on working hours and consecutive working days. As a near-term solution, production schedulers were empowered to factor in the variety of observed holidays to create an overall working schedule that better supported working hours and days-off goals. Over the long term, Cisco and the manufacturer intend to work with supply planning to better communicate the timing of supply shipments and adjust deliveries in a manner designed to support workforce planning.

The discovery process yielded lessons that Cisco is working to operationalize so that we can better support our contract manufacturers to avoid excessive working hours. Cisco is better able to understand how supply chain constraints are demanding more dynamism from plant managers and how these variables impact workers' schedules. We are continuing to work to give plant managers the tools to better forecast how ebbs and flows in component parts could affect the volume of product produced, and thus the number of workers needed to realize such orders.

To learn about the ICT water checklist program, click here.

One Cisco supplier participating in the ICT water checklist program is in a high-water stress area, where water is scarce yet essential for daily operations. In fiscal 2023, Cisco launched a water stewardship project with this supplier, uncovering significant gaps to the ICT water checklist requirements. Cisco engaged a third-party consultant to provide remote assistance, leading to a 64% improvement in most indicators by the year's end.

Roughly one-third of the indicators still required further progress, so Cisco engaged the third-party consultant to conduct an onsite assessment in fiscal 2024. This helped identify pollution risks, opportunities for water conservation, and gaps in the company’s water balance map. A water balance map is a diagram that shows the inputs and outputs of how water flows through a facility. Through these improvements, the supplier was enabled to:

• Visualize water usage throughout the facility, enhancing transparency in water management.
• Examine discrepancies in water input and outputs to determine potential inefficiencies or losses, such as leaks.
• Track key water consumption indicators to identify further water-saving opportunities.

Additionally, a water management system was established to:

• Upgrade metering for secondary and tertiary water and drainage systems for precise monitoring.
• Obtain real-time water drainage data, enabling them to quickly detect and address anomalies such as water leaks.
• Over the two years of water stewardship engagement, the supplier site has steadily improved its water-related performance metrics. The supplier now uses less water to produce the same number of products, and the freshwater leakage rate has reduced from 12% in fiscal 2023 to 2% in fiscal 2024.

1 The water meter availability rate is defined as the ratio of the number of installed meters to the total number of meters that should be installed within a specified area. This metric serves as a crucial indicator for evaluating the efficiency of water management and utilization practices.

The supplier reported positive outcomes, noting that the program reduced operational costs through water conservation and enhanced their environmental management capabilities.

Mitigating climate change requires action not only within our operations, but also across our value chain because emissions from the production of Cisco products contribute to our overall GHG footprint. As such, Cisco requires suppliers to set absolute GHG emissions reduction goals. However, we recognize that setting a target is just the beginning; Cisco also collaborates with our suppliers to drive progress toward achieving these goals.

Throughout fiscal 2023 and fiscal 2024, Cisco partnered with a supplier that was seeking guidance on how to set a goal for—and manage—GHG emissions reductions. We worked closely with the supplier to reduce emissions through improved energy efficiency in their manufacturing operations. A third-party environmental consultant helped conduct onsite capability building activities, including measuring equipment energy usage; assessing the operation and maintenance of manufacturing equipment, lighting, and heating, ventilation, and air conditioning (HVAC) systems; conducting a series of interviews with workers tasked with energy management; and reviewing historical energy data. Taking the findings of these assessments, the supplier replaced lighting with energy-efficient options, addressed air compressor leaks, and optimized equipment for water pumps and air ionizers.

Energy efficiency helps reduce the amount of energy needed to operate, while renewable energy ensures that the energy used to power operations comes from sources that will result in little to no GHG emissions. Taking this multi-pronged approach, Cisco is supporting the supplier’s work to increasingly convert to renewable energy sources across their sites, including solar panel installations. Furthermore, this work goes beyond reducing only emissions associated with Cisco products; the supplier is replicating these energy-saving opportunities across other production lines at their campus.

These achievements are particularly remarkable because at the outset of our engagement in fiscal 2023, the supplier had not yet set an absolute GHG emissions reduction goal, which is a Cisco requirement and common industry expectation. We’ve helped the supplier understand that reducing GHG emissions is achievable and supported them with the means to do so. The supplier has now committed to setting an absolute GHG reduction target this upcoming fiscal year, demonstrating how collaboration is essential for collective progress.

As part of our manufacturing process, every product Cisco makes is thoroughly tested for quality assurance. One method is a stress test commonly known as two- or four-corner testing, where products are tested at specific sets of temperature and voltage levels. This kind of stress testing is particularly carbon-intensive due to the electricity and refrigerants used to reach and maintain the required temperature levels.

In collaboration with our manufacturing partners, Cisco engineers are leveraging data insights to optimize the manufacturing testing process to increase efficiency and minimize carbon emissions. After starting with one pilot project supporting one business unit, test optimization has expanded to include additional business units, resulting in 13,642 metric tonnes of avoided carbon emissions in fiscal 2022—the equivalent of 2939 cars taken off the road for one year. We are continuing to expand this pilot to more supplier sites and Cisco business units, with the goal of scaling across Cisco's entire product portfolio.

To make progress toward our net-zero goal, we engage members of our supply chain to reduce their own emissions footprint. Cisco partnered with an industry peer in 2024 to host an environmental seminar that brought together 70 representatives in Hanoi, Vietnam, to strategize on the water-energy nexus, environmental policies, water stewardship, and renewable energy. Key topics included:

• Water-Energy-Climate Nexus: Highlighted the interdependence of water and energy sectors and Vietnam's goal of carbon neutrality by 2050 and discussed strategies for sustainability in water resource management and the adoption of sustainability standards.
• Renewable Energy Policy and Resources: Provided insights into Vietnam's renewable energy policies and their impact on the ICT supply chain.
• Water Stewardship: Introduced the AWS International Water Stewardship Standard as a framework for sustainability in water resource management.
• Supplier Best Practices: Showcased exemplary practices in water and energy management by ICT suppliers to inspire sustainability operations.

The seminar emphasized the urgent need for collective action in managing water resources, transitioning to clean energy, and implementing sustainable practices in Vietnam. It served as a platform for dialogue, collaboration, and knowledge exchange, contributing to a deeper understanding of the environmental challenges and the role of the ICT supply chain.

Please see our Clean energy transitions page for more on our net-zero strategy.