Supply chain sustainability
Making the world a better place with technology begins with how that technology is made.
How our products are made matters to us. Cisco sees the opportunity and responsibility in leveraging our business, global operations, and overall footprint to power an inclusive future for all. We take action to drive a more just and sustainable future for the workers, communities, and ecosystems in our supply chain.
We work to identify, mitigate, and communicate human rights and environmental risks, and engage collaboratively with suppliers to drive positive outcomes.
How Cisco's supply chain catalyzes positive impacts for workers and communities
The breadth and complexity of Cisco’s supply chain means that there are many ways we can make a positive impact. We set baseline expectations in our annual Supplier Guide and conduct due diligence to uphold workers’ rights and protect the environment from negative impacts of our operations. We enable positive impacts through targeted initiatives designed to support rightsholders, communities, and local ecosystems where we operate so that they can thrive.
Promoting responsible minerals sourcing
We conduct due diligence aligned with our Responsible Minerals Policy to source minerals consistent with our values around human rights and the environment. We collaborate with other stakeholders to support miners and improve their livelihoods.
Upholding baseline expectations for responsible conduct
We help protect workers’ rights, health, and safety by supporting conformance with our Supplier Code of Conduct across the supply chain. We hold our manufacturing partners, component suppliers, and key logistics partners accountable to our expectations.
Improving conditions for workers
We engage with suppliers to improve working conditions and remediate impacts on workers’ experiences. We enable workers to have a voice and provide feedback on their working conditions.
Protecting the environment
We work to address the challenge of climate change across multiple tiers of our supply chain. We also partner with suppliers to mitigate pollution, conserve natural resources, and drive a circular economy.
Raising the bar
We participate in multistakeholder groups to advocate for robust standards across the industry and design solutions that influence better outcomes for rightsholders and the environment.
Our supply chain
Cisco operates a global, diverse, and resilient supply chain. Through our network of specialist suppliers and partners, Cisco works to manufacture goods in a sustainable and reponsible manner. Gartner awarded Cisco second place in the Gartner Supply Chain Top 25 for 2023 report, following three years in the top spot. Our continued excellence in the Gartner assessment is due to our emphasis on corporate social responsibility, supplier engagement, and supply chain adaptability.
Cisco's manufacturing, logistics, and global repair sites
About our supply chain
- Component suppliers: A large group of suppliers that provide parts to our manufacturing partners according to our specifications
- Manufacturing partners: A select group of suppliers that produce finished Cisco products
- Logistics service providers: Suppliers who transport components and finished products
- Repair partners: Suppliers who operate repair sites and complete service repairs
- Indirect Supply Chain: Suppliers contracted to provide services or materials for our company’s use and not intended for finished goods
Our due diligence system
Cisco uses the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights as the basis for our supply chain due diligence system. Below is an overview of how we drive due diligence, with additional detail by program on the Supplier Code of Conduct, Human Rights in the Supply Chain, and Supply Chain Environmental Stewardship pages.
Supply chain sustainability due diligence process
Embedding responsible business conduct into policies and management systems
Engaging our suppliers is foundational to driving positive outcomes for rightsholders and the environment. To promote consistent standards across our supply base, we work to communicate and hold suppliers accountable to our policies during the lifecycle of our relationship with them. Suppliers acknowledge and affirm that they will abide by Cisco’s:
- Supplier Ethics Policy
- Supplier Code of Conduct
- Respecting the Rights of Vulnerable Groups Policy
- Responsible Minerals Policy
- Juvenile Labor Policy and Expectations
- Chemical Management Expectations for Suppliers
Establishing strong policies demonstrates our commitment, sets expectations for our suppliers, and helps guide how we and our suppliers operate. Cisco communicates relevant supply chain policies to suppliers and requires acknowledgement of those policies, either at onboarding or during annual evaluations. Cisco’s policies are also embedded in our standard master purchasing agreements with suppliers.
Our Supply Chain Operations (SCO) Environmental, Social and Governance (ESG) Governance Committee maintains executive oversight of our environmental and human rights risks and opportunities. It regularly reviews our progress and results and drives integration of ESG into business operations. The committee is chaired by our Senior Vice President of SCO and includes other executives representing Global Manufacturing Operations, Services and Logistics, Global Supplier Management, Product and Component Operations, Technology and Quality, Supply Chain Transformation, and Legal. In addition, SCO employees are trained on environmental and human rights issues in the supply chain and are regularly briefed on supplier ESG requirements and their importance to the business.
Identify and assess actual and potential adverse impacts
Cisco annually conducts social and environmental risk assessments of existing supplier sites. These risk assessments incorporate geographic risk indicators from reputable sources, risks from supplier operations and production, and the supplier relationship to Cisco.
The results of these assessments inform the supplier sites at which Cisco will conduct deeper investigation through onsite audits or surveys. Supply chain risks are prioritized by their severity and likelihood of occurrence across the supply chain. If suppliers are found to be nonconformant to our policies, we engage them to correct issues through Corrective Action Plans. Cisco also analyzes nonconformances from audits and other assessments and then creates trainings to help suppliers prevent or mitigate the most likely or frequent risks.
In addition to our annual risk assessment of sites, we assess new suppliers or new supplier sites, including those from acquisitions. Suppliers are required to complete a questionnaire during the onboarding process which helps us to identify potential social and environmental risks. If risks are identified, we follow up to determine if these need to be addressed prior to scaling business with the supplier. Examples of the types of risk that the questionnaire can identify include:
- Employment of foreign migrant workers
- Employment of workers under the age of 18
- Open critical RBA Code of Conduct nonconformances in the suppliers’ most recent RBA audit
- Existing pollution violations
Cease, prevent, and mitigate adverse impacts
Cisco uses multiple strategies to prevent, cease, or mitigate supply chain risks. There are five main levers Cisco employs—some on their own, some in concert with others—when dealing with human rights or environmental nonconformances.
- Supplier capability-building: We aim to promote best practices and give suppliers and site management a baseline set of skills to address social and environmental risks. For example, in fiscal 2023 we delivered trainings on forced labor risks, health and safety, industrial hygiene, worker engagement, water conservation, greenhouse gas (GHG) reporting and clean energy procurement, among others.
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Supplier accountability: If a supplier is found to be nonconformant with our policies, we require Corrective Action Plans and monitor them to closure. Supply chain management is routinely informed of suppliers’ performance on these plans and holds suppliers accountable to make progress. When we lack leverage to drive resolution, Cisco collaborates with industry peers to foster collective action. If a supplier fails to make efforts to improve, we may stop awarding new business and, when warranted, terminate the relationship.
We use supplier scorecards to help measure and manage suppliers’ conformance to Cisco’s environmental and human rights requirements. Scorecards inform sourcing decisions and are discussed with suppliers during business reviews. Scorecards also factor into Cisco’s supply chain business processes for sourcing and procurement decisions. Having ESG metrics reported alongside cost, quality, and service delivery allows procurement managers to make informed decisions when awarding business to suppliers. The ESG portion of the scorecard includes:- Conflict minerals reporting and sourcing of minerals in conformance with our policy
- RBA audit performance and timely closure of Corrective Action Plans
- Protection of vulnerable workers, such as foreign migrant workers and young workers
- GHG reporting and absolute reduction goals
- Water and waste reporting
- Pollution prevention activities and Environment Health and Safety certifications
- Industry collaboration: Cisco believes cross-industry collaboration is key to communicating clear and consistent standards to suppliers. In presenting a united front, industry can work collectively to help suppliers make necessary improvements. Cisco is an active participant in the Responsible Business Alliance (RBA), of which it was a founding member, the Responsible Labor Initiative (RLI), the Responsible Minerals Initiative (RMI), and the European Partnership for Responsible Minerals (EPRM). Cisco also partners with the Institute of Public & Environmental Affairs (IPE), CDP (formerly Carbon Disclosure Project), Alliance for Water Stewardship, and the Asia Clean Energy Coalition. Learn more about the stakeholders we engage with to drive impact.
- Rightsholder engagement: Cisco works to promote the voices of workers in our suppliers’ factories and people in surrounding communities. This initiative includes worker interviews and programs to promote worker-management collaboration and communication in supplier factories. We also engage communities surrounding our supplier sites on environmental issues and work to benefit mining communities through multistakeholder partnerships.
- Remediation: Where we have identified that we have contributed to an adverse human rights impact, we aim to provide access to remediation for affected individuals through legitimate processes. For example, when we find that workers are being forced to pay recruitment fees, Cisco works with involved parties, from the supplier to the affected workers, and leverages industry partnerships to help facilitate the repayment of fees to workers.
We encourage employees, workers, and other stakeholders to raise concerns and report suspected violations of our policies through one of our reporting channels, including the Cisco EthicsLine.
Track implementation and results; use lessons learned to improve due diligence
Cisco uses multiple key performance indicators to track implementation and effectiveness of our due diligence efforts. Our approach to creating and tracking key performance indicators focuses on risk identification (such as through audits, surveys, or reports that assess supplier conformance to our policies), supplier performance (whether suppliers address risks and Cisco’s requirements), and change (metrics showing Cisco’s impact). For example, Cisco tracks and reports the number of audits performed as well as key nonconformances identified by country. In addition, we track suppliers’ performance on audits to determine who demonstrates strong conformance and who requires corrective actions. When corrective actions are needed, we monitor to closure according to RBA closure timeline. We leverage this approach across our programming to assess the effectiveness of our actions and drive improvement of our programs and supplier performance.
In addition to tracking performance at the supplier level, Cisco analyzes data to inform ongoing strategic and programmatic decisions, such as capability-building, engagement with stakeholders, and program strategies. This creates a positive feedback loop whereby we can continue to improve.
Champions of Sustainability
Cisco’s employees are important to advancing sustainable and ethical practices in our procurement and supply chain. We recognize Champions of Sustainability—individuals who have proudly integrated our ESG goals into their daily responsibilities. Read their stories on our website.
Communication
No due diligence effort is complete without communicating to key internal and external stakeholders about successes, challenges, and ongoing issues. We publicly report our efforts here, the ESG Reporting Hub, and in our annual Purpose Report, as well as our annual Global Statement on the Prevention of Modern Slavery and Human Trafficking, Conflict Minerals Report, and CDP climate change and water questionnaires.