Cisco Systems, Inc. (Cisco) is a global leader in networking hardware, software, telecommunications equipment and services. Headquartered in San Jose, California with a workforce of 84,900 full-time employees, Cisco operates across the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China. It’s particularly known for its Internet Protocol (IP)-based networking products and a wide array of services related to the communications and information technology industry.
Effectively, they’ve been making the Internet work since their inception in 1984, designing, manufacturing, and selling IP-based solutions. As one of the largest technology companies in the world, with over $51 billion in reported revenue, Cisco has been working to make a positive impact on its communities and the planet since its inception.
Cisco’s 100% Renewable Electricity Journey
At the helm of Cisco's operations are key executives such as Mr. Charles (Chuck) H. Robbins, Chairman & CEO, and Mr. Richard Scott Herren, Executive VP & CFO, among others. These leaders are steering the company towards a sustainable future, as evidenced by Cisco's commitment to environmental, social, and governance (ESG) initiatives.
Cisco's sustainability journey is marked by significant milestones, including the achievement of 100% renewable energy procurement in several countries. This accomplishment is part of Cisco's broader strategy to reach net-zero greenhouse gas (GHG) emissions across its value chain by 2040. The company's ESG Reporting Hub provides detailed insights into its environmental highlights, such as the reduction of Scope 1 and 2 GHG emissions by 48% compared to the FY19 base year.
In terms of renewable energy procurement, Cisco has made substantial progress. Recently, the company consumed over 1.3 million megawatt-hours (MWh) of renewable electricity, accounting for 91% of its total global electricity demand. This includes sourcing 100% of the electricity used at Cisco facilities in the United States, Canada, and various other countries from renewable sources. The renewable energy procurement takes various forms, including onsite solar installations, long-term offsite power purchase agreements (PPAs), utility green power contracts, and green tariffs.
Cisco's renewable energy contracts alone, now deliver more than 314,269 MWh per year of renewable energy for the company. Additionally, Cisco continues to source significant amounts of solar and wind power through PPAs in India, California, and Texas. The company's strategy and goals are aligned with the United Nations Sustainable Development Goals, and its net-zero goal is validated by the Science Based Targets initiative (SBTi)4.
Taking the lead on implementing these strategies is Mary de Wysocki, the company's first-ever Chief Sustainability Officer. In her role, she leads the company’s sustainability strategy, oversees its progress toward public environmental goals, and helps Cisco drive long-term value for the business, its value chain, and the planet. "We can't have any kind of future if we don't have a healthy planet," de Wysocki wrote. She believes in moving beyond a 'doing no harm' mindset to one in which we build the capacity of our social and environmental systems to heal and thrive. Her team includes Ned Bagno, who manages the EnergyOps program at Cisco. He shares that the company plans to expand its investment in off-site renewable energy by executing over 500 megawatts (MWh) of long-term renewable energy contracts by the end of FY 2025.
All of this is an evolution of renewable energy procurement that began in 2006, but cemented itself when Cisco began procuring unbundled renewable energy certificates (RECs) in 2009. In 2017 the company established its intent to support new offsite generation making a 20 year investment in its first US based PPA, a 20 MW project that was slated to produce 60,000 MWh of renewable electricity per year. That power focused on supporting the renewable electricity needed to run their San Jose HQ. The company increased its efforts in 2020 when it invested in its second US based PPA, the Mesquite Star wind farm in Texas. Cisco took a 10% share of the 419 MW of power expected to produce 1.6 million MWh of renewable electricity annually. That share is the equivalent of 40% of the company's electricity used at data centers in Richardson and Allen, TX. In order to maintain their 100% renewable electricity goal, Cisco procures unbundled RECs along with green tariffs and utility provided renewable electricity. But the unbundled RECs are the lion’s share of the supply options covering over 882,000 MWh of renewable electricity.
The Role of RECs with Additionality
While Cisco has made impressive progress procuring renewable electricity, the company could amplify its impact even further by incorporating renewable energy certificates (RECs) with additionality into its strategy. This is evidenced by the fact that unbundled RECs remain such a large part of Cisco’s renewable energy procurement strategy. Clearly, the company cares about bringing new generation online, but with such a massive load to cover just in the US, investing in PPAs and VPPAs certainly helps, but they also can prove to be difficult options when a company can’t find the right project(s) to meet its needs.
Unlike the RECs Cisco currently uses, additionality RECs would help address the scale and complexity of the company’s needs, while accomplishing the same goal as a VPPA. These RECs with additionality would help fund construction of new renewable energy projects without the need to search bilaterally for the ideal project based on Cisco’s needs. Since additionality RECs would come from any number of new, pre-COD projects this would also help Cisco do the two things it appears to want to achieve: speed up the growth in renewable generating capacity better than unbundled RECs sourced from existing facilities; and allow them to support the investment of more renewable energy projects at scale when compared their current investment in unique, single sourced projects around the country that don’t fully account for their load. More importantly, this would also allow Cisco to strengthen their renewable energy marketing claims and their commitments because of their renewable energy procurement would be documented as additional, which currently can’t be done for the more than 882,000 unbundled RECs.
In conclusion, Cisco's commitment to environmental sustainability is commendable and serves as a model for other companies in the technology industry. Sourcing 100% renewable electricity and reducing its GHG emissions is a testament to its dedication to environmental sustainability. By continuing to innovate and adapt their sustainability strategies, Cisco is not only contributing to the health of our planet but also driving long-term value for their business and stakeholders. However, if they incorporate RECs with additionality into their strategy, the company could further accelerate its progress towards its sustainability goals and make an even greater impact on the transition to a renewable energy future. This would further solidify its position as a leader in corporate sustainability, magnify their already positive efforts, and make an even greater impact on their global environmental objective to create a healthier planet.