Cisco's CSR report signals heightened conflict minerals scrutiny

The network technology giant's attention to certain issues -- notably conflict minerals -- will become sharpen during the current fiscal year.
Written by Heather Clancy, Contributor

Networking giant Cisco details its plans to extend its corporate sustainability initiatives throughout its supply chain during 2012, with a particular focus on conflict minerals.

The revelation is part of the "2011 Cisco Corporate Social Responsibility Report," released this week and detailing some of Cisco's sustainability accomplishments of the past year.

Cisco is working with the Electronics Industry Citizenship Coalition on the conflict minerals issue, which has become a more pressing concern for high-tech companies since the passage of the Dodd-Frank act. That legislation requires publicly traded companies to disclose sourcing of so-called conflict minerals in their reporting starting in 2012 -- unless something happens to make the law disappear. The rule, expected to be final in the near future, requires companies to declare whether their products contain minerals mined from the Democratic Republic of Congo (DRC) or certain neighboring countries in Central Africa. That is because the proceeds often go toward arming the militia in those regions. The minerals include gold, tungsten and tin. Many high-tech companies have decided that to avoid potential embarrassment, they will try to eliminate potentially problematic sources.

Other accomplishments cited by Cisco in its new report:

  • The company reports that it is on track to meet its commitment to reduce all Scope 1, 2 and business-air-travel Scope 3 greenhouse gas emissions by 25 percent by calendar year 2012. (That was against a 2007 baseline).
  • In its 2011 fiscal year, Cisco reduced its energy usage by approximately 16.9  million kilowatt-hours. That had the effect of helping it avoid 7,400 metric tons of carbon dioxide emissions. That reduction didn't come without an investment: Cisco put $1.9 million into energy conservation projects.

Cisco's pledge to heighten its focus on supply chain issues echoes that of Microsoft, which mentions it as a priority in the "Microsoft 2011 Citizenship Report." The company writes: "To enhance our commitment to working responsibly, in FY2012 we are conducting an indepth review to assess and further strengthen our work to promote responsible business practices across our supply chain."

During fiscal year 2011, Microsoft made several changes to its Vendor Code of Conduct. Those changes included more stringent "provisions" on anticorruption, security and privacy, and human rights; limiting the number of hours worked per week to 60 (even if local law allows for more); and language prohibiting discrimination against unions.

During the coming fiscal year, Microsoft supply chain can expect the company to be more proactive about:

  • Third-party anticorruption assessments
  • The use of child labor
  • Efforts to trace and prevent conflict minerals from entering its supply chain

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