Cisco said it still successfully avoids basing its net-zero strategy on offsetting its carbon emissions. Instead, it relies on energy efficiency progress and renewable energy procurement strategies to meet some of its emission reduction targets early, Cisco VP of corporate affairs Mary de Wysocki said during an ESG investor call.

According to Cisco's latest Purpose Report, the networking giant met two of its 2022 targets a year ahead of schedule. The vendor reduced its global scope 1 and 2 greenhouse gas emissions by 60% and reported 85% of its energy came from renewable sources.

The vendor is targeting to reach net-zero global scope 1 and 2 emissions by 2025 and net-zero across all three scopes of emissions by 2040. Cisco will begin reporting on its 2040 target this year.

"We're really just getting started on our net-zero journey, and our focus will first be on how do we absolutely reduce emissions as much as possible before we incorporate offsets," de Wysocki said.

Cisco is working with the Science-Based Targets initiative (SBTi) to ensure its environmental targets are in line with what's required to limit global temperature rise to 1.5°C compared to pre-industrial levels. According to SBTi's calculations, Cisco may potentially need to offset 10% of its emissions to reach net zero.

If offsetting (rather than totally eliminating) its carbon emissions becomes necessary, "our approach would be to leverage offsets, which really focus on carbon removal projects and ones that we can conduct due diligence to ensure the offsets have a proven carbon removal track record," de Wysocki explained. Another priority of any potential carbon offset projects is that they positively impact the communities where they are implemented, she added.

Although offsetting is often viewed as a look-sustainable-quick scheme and as an incomplete solution to the problem, "the public and private sectors must invest in innovative and effective nature-based and technology-based solutions to remove carbon" for the world to achieve net zero, she noted.

To that point, the Cisco Foundation is investing in carbon removal efforts that fit its expectations, and has made both entrepreneurial and monetary commitments over the last 10 years to fund impact investing and nonprofit grants targeted at carbon reduction and sequestration, de Wysocki said.

ESG materiality of data security, privacy

In addition to its focus on environmental responsibility, the networking giant claims more than 85% of the world's web traffic travels across Cisco connections, giving the vendor a responsibility to "ensure that our technology is made, sold, and used responsibly," de Wysocki said.

This includes prioritizing data security and privacy, which are among the 18 environmental, social, and governance (ESG) topics de Wysocki said are important to Cisco's stakeholders.

"Privacy is more than just a compliance obligation. It is a fundamental human right and business imperative that is critical to building and maintaining customer trust," de Wysocki said. This means Cisco's obligation to secure its customers' data grows as those customers work across various locations and face increasing threats, she explained.

Cisco's approach to privacy and security is based on partnering within the public and private sectors to "help improve the world's overall cyber posture," de Wysocki said.

This includes the vendor's agreements to share threat intelligence with international organizations like NATO and Interpol to "jointly fight cybercrime." Cisco also publishes research and best practices in its Trust Center to share its findings with the public, she said.