Human rights in the supply chain

We strive to identify and quantify our human rights impacts, mitigate risks, and maximize opportunity for people and communities. Our dedication to human rights is embedded in our due diligence system, which is consistent with our Global Human Rights Policy, the United Nations Guiding Principles on Business and Human Rights (UNGPs), and the OECD Due Diligence Guidelines for Responsible Business Conduct.

Cisco has multiple policies to protect and uphold human rights in our supply chain and requires that suppliers comply. These policies include our Supplier Code of Conduct, which is the same as the Responsible Business Alliance (RBA) Code of Conduct, Responsible Minerals Policy, Supplier Ethics Policy, and Respecting the Rights of Vulnerable Groups Policy. Additional policies can be found here.

When we become aware of a potential violation of our policies, we work to investigate, assess, mitigate, and remedy human rights impacts. More information on prioritized human rights risks and how we address them is below. In addition, Cisco outlines our overarching due diligence processes on the Supply chain sustainability page and specifics on forced labor due diligence in our Global Statement on the Prevention of Modern Slavery and Human Trafficking. Cisco also publishes results of our actions to identify, mitigate, and remedy nonconformances to our Code, including forced labor nonconformances, on the Code of Conduct and Due diligence program metrics and audit results pages.

In fiscal 2024, we launched a steering committee to embed human rights in our Supply Chain Operations (SCO) organization. Its charter is to integrate human rights into business strategies and operations with the intent to reduce harm, prevent risks, and effect positive outcomes for workers. The committee is comprised of senior leaders in Cisco’s Supply Chain and Human Rights functions with the necessary expertise and influence to set and drive the strategy.

Cisco aims to educate SCO employees about human rights risks and how they can play a role in helping to address those risks through a training offered every two years. This mandatory training covers how to: interpret our policies on key issues such as forced labor and child labor; detect warning signs of serious risks, such as forced labor or health and safety issues; report concerns if they suspect violations of Cisco’s standards and policies; and support work to help hold suppliers accountable. In fiscal 2024, 100% of the SCO employees—which includes those responsible for sourcing and procurement, supplier management, planning, manufacturing, logistics, quality, and more—completed this training.

We also provided training to our manufacturing partners on mandatory Human Rights Due Diligence (mHRDD) regulations. This training echoed the importance of aligning due diligence within operations and supply chains to international standards and frameworks, such as the OECD, and discussed what activities constitute human rights due diligence, how suppliers may be affected by the regulations, and the role they can play to support Cisco's human rights commitments. In fiscal 2024, 100% of our manufacturers participated in the training.

In addition to exercising leverage directly with our suppliers, we collaborate with industry peers through the RBA and its Responsible Labor Initiative (RLI) and Responsible Minerals Initiative (RMI), which are multi-industry, multistakeholder initiatives promoting the rights of vulnerable workers in global supply chains. Our participation in these industry initiatives helps drive consistent expectations for due diligence and remediation across the industry, as appropriate.

In 2024, Cisco was highlighted in Know the Chain’s Good Practice Guide, which highlights examples of good practice that companies can take to enhance their approach to addressing forced labor risks in the supply chain. The next KnowTheChain benchmark will be complete in Cisco’s fiscal 2025.

Additional information on key human rights risks and our measures to address them is provided below.

Prohibiting forced labor and modern slavery

Upholding workers' rights to be free from forced labor of any kind is embedded within our Supplier Code of Conduct, which aligns with the International Labour Organization (ILO) Indicators of Forced Labour. Supplier site assessments include forced labor indicators, such as deception during recruitment, identity document retention, wage withholding, debt bondage, abusive conditions, and restriction of movement. To minimize the risk of forced labor through debt bondage, we uphold the RBA Definition of Fees policy. The Definition of Fees requires that workers do not pay fees to obtain, maintain, or leave employment, even if permissible by local law. Cisco requires suppliers to mitigate risks that could potentially lead to forced labor conditions and remediate impacts to affected workers.

Each year, we audit suppliers to assess their conformance to the Supplier Code of Conduct and identify and address any gaps. In fiscal 2024, audits continued to uncover nonconformances to our Code for the prohibition of forced labor, including manufacturing partners, component suppliers, and the sub-tier. These nonconformances ranged in severity from Priority to Major to Minor.

Most Major and Minor nonconformances to the Prohibition of Forced Labor Category were related to workers paying small fees in the recruitment process, such as one-time fees for health examinations, deposits, or transportation. These fees often amount to less than 5% of the worker’s monthly salary. Some suppliers had the practice of reimbursing workers after commencement of employment, but this is still not in conformance to the Code and our expectations. Our teams work with suppliers to implement employer payment of these fees directly, rather than reimbursing workers.

Less often, we saw Priority level findings, some of which identified risks of bonded labor, a type of forced labor. Typically, this involved foreign migrant workers who paid excessive recruitment fees equivalent to a month or more of their gross wages. It is strictly prohibited for workers to pay these fees, and there is a serious risk of workers becoming bonded by debt and forced to work to repay loans or excessive fees to labor brokers.

When bonded labor issues are identified, we take steps to address them, which may include the following:

1. Institute the Employer Pays Principle. This entails having suppliers develop policies and procedures to stop forced labor risks and stop the fees being charged to workers. These supplier actions can include: instituting a “no fees” policy; instituting a due diligence process for assessing labor brokers; amending agreements and contracts with labor brokers so that the employer pays all fees; or amending workers’ contracts so that they are prohibited from paying fees. When policies are adjusted, workers should be trained and informed about the "no fee" policies in a language they can understand. This training is also integrated into the recruitment process for future workers.
2. Conduct an RBA-approved third-party fees investigation. This deeper investigation assesses the scale and scope of impacted workers who have paid fees amounting to more than one month’s salary. Workers are interviewed with the goal of identifying fees they paid along their recruitment journey from the country of departure to the destination country of employment, recurring fees deducted from their paychecks, or fees paid to other intermediaries or for travel. As a result, Cisco gains information on how many workers were impacted and how much money they might have paid, and suppliers better understand how workers were affected through dialogues with them. After the fee investigation, suppliers are to submit a reimbursement plan to RBA for approval.
3. Work with the supplier employer to reimburse. A direct outcome of the investigation is to calculate the total reimbursement to affected workers, develop a plan to reimburse, and determine the actual cost of recruitment moving forward. Cisco helps suppliers develop and implement the reimbursement plan in a timely manner and works to monitor the plan until all workers have been repaid. To ensure mutual agreement on reimbursement amounts, Cisco’s standard operating procedure also involves asking suppliers to have workers sign a letter acknowledging they understand why they’re being reimbursed, the amount, and that it includes all fees paid during the recruitment process. While Cisco asks all suppliers to do this, not all suppliers are able to in instances when they have already completed the reimbursement by the time Cisco receives the case. In other cases, workers have already departed and Cisco or the supplier are unable to locate all of these departed workers. Cisco reviews these signed letters alongside further supporting evidence of repayment, such as pay slips and bank transfer reports. Subsequent RBA audits validate that the affected workers were adequately remediated.

During fiscal 2024, we drove more than US$1.7 million in fee reimbursements to 2,290 workers across our direct and sub-tier suppliers for recruitment fees occurring in these countries: Malaysia, Singapore and Taiwan. Meanwhile, 100% of forced labor Priority nonconformances are closed or are in progress of being remediated. An overview of the number of RBA nonconformances found related to forced labor can be seen in our published audit data with their geographic distribution.

Each year, Cisco aims to continuously improve our due diligence processes based on what we have learned. Recently, forced labor risks have been most commonly uncovered as we assess new components suppliers, new facility locations, and extend our reach into our sub-tier suppliers with whom we do not have direct contractual relationships. Accordingly, we have strengthened our due diligence during the new supplier and new site onboarding processes and during the acquisition integration processes. Through these processes, we identified forced labor risks at three prospective supplier sites prior to production during fiscal 2024. By identifying, addressing, and remediating these risks ahead of launching or scaling business with the supplier, we avoid contributing to harm of these workers.

We continue to work on increasing awareness of international expectations around human rights due diligence, forced labor due diligence, and building the capabilities of suppliers to address these issues more broadly and deeper within the supply chain. This prevents risks in our own supply chain and propagates international standards so that they are followed throughout the industry for the betterment of all electronics workers.

We view collaboration with manufacturing partners as pivotal to address systemic issues, including forced labor, in the sub-tier supply chain. For the last four years, we have provided forced labor training each year to our supply base. Thirty participants from 19 suppliers attended the Cisco-sponsored training sessions (of which 12 suppliers were sub-tier suppliers to Cisco). The two-day training was focused on RBA Code of Conduct expectations and RBA tools for forced labor due diligence, such as a Responsible Recruitment Due Diligence Toolkit. Cisco is continuing this work to train our direct and sub-tier suppliers to identify, remediate, and prevent forced labor in their recruitment and employment practices throughout fiscal 2025.

We also continue to play an active role within the industry on the Steering Committee of the RBA Responsible Labor Initiative (RLI).

Protecting young workers

Our standards for protecting young workers (ages 15 to 18), in jurisdictions where individuals are legally permitted to work under the age of 18, are outlined in the Juvenile Labor Policy and Expectations. Our policy and due diligence are informed by international standards, such as the ILO-IOE Child Labour Guidance for Business. In fiscal 2024, Cisco did not observe cases of underage child labor (workers under the age of 15). Where nonconformances were identified, young workers did not receive legally mandated health checks and suppliers had incomplete policies and procedures on managing interns and student workers. We opened Corrective Action Plans (CAPs) for those nonconformances, which are closed or on track to closure.

Controlling working hours and days of rest

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.

Protecting workers' health and safety

Our Code of Conduct helps to identify and mitigate health and safety risks to workers in supplier facilities. We also recognize the important role that workers play in identifying and addressing risks that they may encounter at work. Facilitating dialogues between supply chain workers and their managers is one way Cisco builds site-level capabilities to improve worker health and wellbeing.

Since fiscal 2022, Cisco has partnered with the nonprofit Social Accountability International (SAI) to implement its TenSquared program. TenSquared runs for 100 days and brings together supply chain workers and managers to collaboratively identify and address challenges in occupational health and safety. 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 engaged more than 4100 workers to participate in the problem-solving process resulting in longer-lasting solutions.

Helping ensure wages and a decent standard of living

In order to uphold and respect the human rights of all people, including employees and those who work for and with our suppliers and contractors, Cisco is taking steps to deepen our understanding of living wage within our own operations and supply chains. For example, Cisco has formed an internal cross-functional working group that is monitoring and assessing methodologies and standards on living wage, and we have taken steps to educate representatives of key internal functions on this concept. Cisco also engages in industry efforts such as the RBA Living Wage Taskforce and is a corporate sponsor of the Anker Research Institute. Through these engagements, Cisco is committed to understanding common approaches, documenting best practices, and promoting harmonization.​

Giving workers a voice through grievance mechanisms

One aspect of protecting worker wellbeing is giving them ways to report issues that are not being addressed by their employers. Cisco’s EthicsLine is available to all supply chain workers. We have aimed to make it more accessible to the workers in geographies where we operate and added 12 more languages, including Thai, Tagalog, and Vietnamese, for a total of 27 languages.

When a worker or other rightsholder or stakeholder reports a potential violation of our human rights related supplier policies, Cisco works to take corrective actions aligned with our existing processes. We investigate complaints further to assess the validity of allegations. We engage with the grievance reporter to obtain more information that will help in further investigation. We work to maintain the reporter’s confidentiality to prevent potential retaliatory behavior from employers or other actors. We aim to make a fair assessment of the human rights impact, apply leverage where we can, and engage third parties to join efforts to identify and address the issue. If human rights impacts have occurred, we implement corrective actions that aim to stop the harm of workers and prevent future harm to workers. When possible, we work to provide access to remedy.

During fiscal 2024, we received four reports through our EthicsLine, RBA’s Grievance processes, and from a nongovernmental organization (NGO) regarding forced labor and health and safety concerns at components supplier sites and within the sub-tier. We took steps to assess the scope, and remediability of the concerns, and are working with relevant teams including the RBA to further investigate, address, and meet workers’ needs. 100% of these cases are closed or under investigation. See case study for further details. During fiscal 2024, we did not identify Priority nonconformances to the RBA Code for Worker/Stakeholder Engagement and Access to Remedy.

Engaging stakeholders

Putting rightsholders at the center of our human rights programs and strategy is an important way we drive positive impact for the workers and communities in our supply chain.

In fiscal 2023, we conducted a human rights impact assessment that included interviews with hundreds of supply chain workers across two sourcing geographies, Mexico and Thailand. The objective of the assessment was to identify potential human rights impacts from their perspectives. The potential risks identified included working hours, health and safety, and worker voice. In fiscal 2024, we worked to incorporate insights from this assessment into our human rights strategy, programming, and due diligence processes. Cisco conducted stakeholder mapping exercises in the past, which helped identify subject matter experts who could provide feedback on human rights issues at a global level. With our focus to put workers at the center, we conducted another stakeholder mapping exercise with the intent to identify local and community level organizations who could serve as rightsholder proxies and worker representatives. Within the past year, we had the opportunity to engage with local organizations, including NGOs and a trade union, that helped provide us with deeper insight into human rights issues that may be difficult to identify through our existing due diligence programs. As we continue to learn, we aim to continuously improve our programs and stakeholder engagement strategy.

Cisco participates in initiatives and collaborates with organizations to support systems change at scale. By sharing our learning and engaging in dialogue with global leaders, we see an opportunity to address the systems in which complex human rights issues occur. In fiscal 2024, we participated in multiple forums hosted by the RBA in which we engaged with policy makers and civil society representatives in discussion on topics including conducting effective and impactful human rights due diligence and addressing forced labor. Among these topics, at the RLI Global Summit on Collaborative Approaches to Combatting Forced Labor, Cisco publicly called upon global leaders to support the strengthening of sourcing countries’ local laws and capabilities to align with International Labor Organization (ILO) standards, including the global standard for ethical recruitment. Collaborators discussed short- and long-term plans to address forced labor, visions for success, and identified priority areas for further collaboration.

View examples of initiatives and organizations Cisco participates in
for addressing human rights in the supply chain.

Sourcing minerals ethically

Mining involves risks on many fronts, including mine worker health and safety, forced labor and child labor, environmental degradation, and influence on regional conflicts. Cisco has put a robust due diligence process in place to responsibly source minerals in our products, including tantalum, tin, tungsten, gold (3TG), cobalt, lithium, nickel, aluminum, copper, graphite, and other critical minerals. Our goal is to source minerals consistent with our values around human rights, business ethics, labor, health and safety practices, and environmental responsibility. This approach includes sourcing responsibly from conflict-affected and high-risk areas (CAHRAs). Our commitment, informed by the UNGPs, is captured in our Responsible Minerals Policy.

Cisco does not directly procure minerals from mines, or the smelters or refiners (SORs) that process them. We rely on third-party standards, such as the Responsible Minerals Assurance Process (RMAP), and cross-recognized standards to determine whether mineral sources are low-risk (previously referred to by the industry as conflict-free). Our calendar year 2023 Conflict Minerals Report, published in May 2024, describes in detail how our due diligence activities align to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The report also provides details of our 2023 results.¹

Identifying 3TG risks

Since Cisco does not buy 3TG directly from SORs, we collaborate with our suppliers to conduct due diligence for responsible mineral sourcing. We also work across our industry to develop tools and practices to support due diligence. We use the RMI Conflict Minerals Reporting Template (CMRT) to survey suppliers, review SORs they report, and request that they work through their supply chains to shift sourcing to SORs conformant with RMI's RMAP.

After Cisco analyzes supplier CMRTs, we address identified risks. This includes working with suppliers to remove non-RMAP-conformant SORs from the supply chain. We set the highest priority on SORs that meet Cisco's definition of “high-risk.” Through the Supply Chain ESG Steering Committee, we regularly notify Cisco's supply chain leadership of our progress. If a supplier does not attempt to comply with our Responsible Minerals Policy, we will escalate the supplier internally and possibly remove them from our supply chain. In calendar year 2023, 70% of the 3TG SORs reported by our in-scope suppliers were conformant or active to a third-party standard. 12% of all reported SoRs were confirmed recyclers. More information about our 3TG results are included in the calendar year 2023 Conflict Minerals Report.

Going beyond “conflict minerals” and the DRC

There is increasing focus on accountability and transparency regarding human rights in global mineral supply chains beyond 3TG. In fiscal 2024, we continued due diligence on the cobalt in our supply chain, consistent with our Responsible Minerals Policy, and found that 64% of the cobalt refiners reported by suppliers were conformant or active to a third-party standard. Additionally, this year we conducted OECD-aligned due diligence on an expanded list of minerals and materials and received responses from 36% of our in-scope suppliers. The results of these campaigns allow us to monitor risks, meet regulatory requirements, improve the resiliency of Cisco’s supply chain, and engage upstream to improve on-the-ground conditions in mining communities.

Collaborating within the industry for responsible minerals

In fiscal 2024, Cisco continued collaborating with peer companies and other stakeholders through the RMI. We actively participated in RMI working groups to increase SOR and processor participation in RMAP; identify processors for new minerals and materials; and share best practices and guidance for due diligence and risk mitigation. We also contributed to the RMI’s Audit Fund. This fund incentivizes SORs to participate in the RMAP program by offsetting the cost of their initial audit.

Cisco also collaborates to improve conditions for miners and increase responsible mining in CAHRAs. Cisco remains a member of the Public-Private Alliance for Responsible Minerals Trade (PPA) and the European Partnership for Responsible Minerals (EPRM). In fiscal 2024, Cisco joined the Initiative for Responsible Mining Assurance (IRMA) to promote visibility, accountability, and the inclusion of rightsholders as decision-makers at all levels of the mineral supply chain. We plan to continue to support these initiatives in fiscal 2025.

Finally, alongside our participation in industry associations, we continue to collaborate with our suppliers to enhance minerals traceability in our supply chain. In fiscal 2023, we piloted a tool to track minerals at every point in our supply chain while protecting the privacy of our sub-tier suppliers. This tool provided valuable insights into the data needed for effective upstream and downstream tracking. In fiscal 2024, we shared our learnings with peers and partners and will continue to support the development of traceability tools to connect mine-level data with customers and stakeholders.

Case studies

Review our case studies to see how Cisco's supply chain auditing, corrective action, and supplier engagement processes work in practice as part of our overall due diligence process.

1 Conflict minerals are defined by the United States Securities and Exchange Commission in Section 1502 of the Dodd-Frank Act as cassiterite, columbite-tantalite, gold, wolframite, or their derivatives, or any other minerals or their derivatives determined by the Secretary of State to be financing conflict in the Covered Countries, which include the Democratic Republic of the Congo (DRC) or an adjoining country.