Corporate Sustainability: Building Partnerships to Achieve Goals

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On March 17^th, 2011 I was honored to co-present with my counterpart John Malian, Global Supply Chain Manager – Design for Sustainability at Cisco Systems at Hanson Bridgett’s monthly sustainable business leadership forum in San Francisco, CA.  Throughout the highly interactive forum we had dialogue centered on how we have partnered to reduce greenhouse gases within the supply chain.  We also discussed the importance of sharing best practices.  Both UPS and Cisco have very similar approaches in addressing environmental sustainability.  We create efficiencies in our network and develop innovative green products and service offerings.  Both companies strive to provide environmental conscious solutions to our customers.  We both collaborate with customers, industry groups, government, non-governmental organizations, and employees to address environmental issues.

Both UPS and Cisco Systems have sustainability committees whose strategy is to develop and implement sustainability programs for both our internal and external customers. We both believe it is important to develop a long term strategy that impacts sustainability into their operations.  Data and numbers will make it possible to make better decisions.  You cannot manage what you cannot measure.  You cannot mitigate your impact without measurement.  Both companies have been reporting to the carbon disclosure project since 2003 when the program was first rolled out.  We both understand the importance of being transparent and accurate reporting.

UPS set an airline goal to reduce emissions by 20% per CO₂ lbs/ATM by 2020.  We also set a UPS US small package delivery mpg improvement goal of 20% in miles per gallon 2000-2010, achieved through a combination of factors including more efficient equipment, driver behavior, focused maintenance, etc. Cisco has an absolute operational and employee air travel footprint reduction goal of 25% by 2012.  In 2010 Cisco reduced their operations footprint by 12% and their travel by 45%.  The 45% reduction was met due to their WebEx and Telepresence solutions.

One of the questions asked from the audience was: What are some of the cutting edge sustainable management practices by your customers that are achieving a return on investment?

Our response was very simple: Virtually every “Request for Proposal” now asks sustainability questions.  Some are very detailed.  If you are a supplier for Wal-Mart or the U.S. Government you know what I am talking about.  They are making purchasing decisions based on how sustainable a company is.  They also take it a step further and develop quarterly scorecards that incorporate sustainability elements to rank their providers and identify partners that are environmentally responsible.

There are sector specific hot buttons that companies are looking at: Hi Tech industries are looking at waste reduction, reverse logistics, and end of life processing while the retail sector is looking at more sustainable packaging.  Every sector is asking more about credentials… Do we measure scopes 1, 2, &3 for our supply chain?  Is our data assured by a third party?  Are we an EPA smart way carrier to ensure we are moving their product in an efficient way?

This brings up the next and most relevant discussion of the night.  How has UPS worked with Cisco to measure and reduce their carbon footprint?

UPS has been calculating Cisco’s global carbon footprint since 2008.  We help them set their baseline last year and are working with them this year to reduce their carbon footprint.  Some of ways include looking at one of Cisco’s largest warehouse operations to identify key activities to help reduce their emissions.  We plan to leverage the analysis to deploy to other Cisco operations globally.  These activities have helped to reduce carbon emissions by more the 900 metric tones for one quarter.  Our joint sustainability efforts are tracked and managed for continual improvement with the supply chain operation.  We report these activities quarterly to Cisco and have quarterly business review that incorporates sustainability and innovation metric in the overall scoring.

In closing, UPS and Cisco have been able to connect the dots between efficiency and sustainability to ensure cost and carbon footprint reductions through process improvements within each operation.  By forming partnerships like UPS and Cisco, companies can identify new emission reduction opportunities that otherwise would not have been possible.