Innovative Power of the Network: Helping Transform How the World Tackles Environmental Challenges

June 24, 2008

By Jenny Carless

Climate change and other environmental issues are top of mind in companies around the globe. And while the will to make necessary changes certainly exists, finding the means to that end is not easy.

Information technology (IT) can have a transformative effect as the world addresses its environmental challenges. Cisco plans to demonstrate how the network can serve as a green platform for sustainable business; and to that end, today the company announced a corporate global greenhouse gas (GHG) reduction goal of 25 percent, in absolute terms, by 2012.

Cisco intends to achieve this goal through a combination of deploying IT, making its facilities more energy efficient and purchasing renewable energy. The company will share its methods and successes, to provide a concrete example for customers and others of how they, too, can use technology to improve their own environmental footprints.

"We are innovators at Cisco, and we believe that the best way to achieve a more sustainable impact is to rely on innovation and our technology to help us solve problems," said Laura Ipsen, co-chair of Cisco's EcoBoard and senior vice president of Cisco Global Policy and Government Affairs. "Our number one goal here is to use less energy - and we're going to do that by drawing on the power of technology to make things smarter."

"A 25 percent absolute reduction goal from Cisco sends a strong message that corporate growth and environmental protection can go hand in hand," says Jim Sullivan, director of the U.S. Environmental Protection Agency (EPA) Climate Leaders program. "It's an aggressive reduction goal over a relatively short time period, and we are pleased to be working with Cisco as a partner in EPA's Climate Leaders program.

"Looking at the high-tech industry in general, data center energy use is rapidly increasing - consuming 61 billion kWh in 2006 and projected to increase to 100 billion kWh in 2011 - and it's an area a lot people are focusing on right now," he continues. "So Cisco's announcement is sending a good message that high-tech business growth does not have to adversely affect our climate."

A Multi-Pronged Approach

In calendar year 2007, Cisco's gross GHG footprint measured 832,000 metric tons of CO2 equivalents. Based upon reductions allowable under EPA Climate Leaders protocols, this figure is reduced to a net 724,000 metric tons of CO2 equivalents. With this commitment, Cisco will reduce its GHG emissions to a maximum net footprint of 543,000 metric tons of CO2 equivalents by 2012. The process used to calculate that figure was designed in part based upon feedback from private consulting groups, the Climate Leaders program and non-governmental organizations; it was also reviewed by the EPA.

The company joined the Climate Leaders for the opportunity to learn from, benchmark with and share its ideas on IT enablement with others. That group, which launched a little more than six years ago, has shown that the power of markets and some healthy competition is a good thing for the environment, according to Sullivan. Currently, the group includes about 200 companies whose combined U.S. revenues represent more than 10 percent of U.S. gross domestic product (GDP).

"One of the first things we're asked, as we talk to prospective members, is what others are doing," Sullivan explains. "So any time large, well-respected companies take a leadership position by announcing aggressive GHG reduction goals, it has an impact not only within that company but with competitors and others in different sectors that are thinking of taking action."

Cisco intends to reduce its GHG emissions through a combination of programs, including:

• An increased reliance on collaboration technologies such as TelePresence and the WebEx suite of tools, which reduce the need for business travel (which accounts for 27 percent of Cisco's overall GHG footprint)
• Further deployment of the Cisco Connected Workspace, a hybrid office environment that has been shown to reduce electrical demand in the affected space by up to 40 percent
• Continued deployment of IP-enabled management, data analytics and environmental standards into new building design and existing site retrofits as well as "greening" its leases
• Purchasing variable amounts of renewable energy to supplement its operational efforts

To take advantage of the network's ability to monitor and manage energy - and in order to create operational transparency - Cisco has created a dashboard of relevant environmental and sustainability data. Further, the company is currently using a decision-support software platform to evaluate the financial and environmental viability of relevant operations.

"Together, these tools will help us prioritize projects and resources and make smarter business decisions," explains Rob Rolfsen, Cisco's director of Sustainable Development.

IT Enablement and 21st Century Carbon Accounting

Cisco's vision is for IT to help transform how the world responds to environmental challenges.

"IT is responsible for about 2 percent of carbon emissions, but we feel strongly that IT and IP can have a very big impact on the remaining 98 percent," Rolfsen emphasizes. "In fact, we believe that IT-enablement - such as we are doing with our dashboard and software analytics - will become the foundation of a sustainable 21st century carbon accounting method."

"We are setting an absolute target because Cisco believes that corporations have a responsibility to reduce the impact of their operations on the environment," Ipsen explains.

An absolute goal doesn't change over time in relation to company size, sales figures or other factors; so even as a company grows, it is still held to an absolute reduction in GHG emissions. By contrast, with an intensity-based goal - which is adjusted as a company grows or hires more employees, for example - a company could actually increase its emissions over time.

Exponential Benefits

The benefits of increased sustainability will reach beyond Cisco to touch its customers, partners and shareholders:

• Customers and partners can take advantage of Cisco's experience, data collection and technology advances to implement similar practices and improve their own business and environmental bottom lines.
• In many cases, as a company reduces its GHG emissions, it can also reduce its energy use. Savings on this expensive line item help reduce operating expenses, adding to shareholder value.

"Two years ago we couldn't have done this - but just as we can close our books today within 24 hours, we will have absolute visibility into our carbon accounting because it will be IT-enabled," Ipsen notes. "Beyond that, we will be able to make projections about where we're going to be in the market on energy, or forecast energy prices, and then understand how our business model needs to shift over time to take into account that situation."

Industry leaders like Cisco are harnessing the innovative power of the network and helping transform how the world tackles environmental challenges. From this shared collective knowledge and expertise, others can learn how to implement their own processes and improve the overall environmental benefits exponentially.

"It's that green net impact we're after," Ipsen says. "By setting - and achieving - this aggressive GHG reduction goal, we really hope to inspire companies the world over to take advantage of the network as a platform for sustainable business."

Jenny Carless is a freelance writer located in Santa Cruz, CA.