| www.cisco.com |
|
| Share Price (3/15/07): | $25.81 |
| OVERVIEW: | |
| Market Value (3/15/07): | $155.9 BIL |
| Revenue (2006): | $28.5 BIL |
| Employees: | 51,840 |
| Return on Equity 2006: | 25.2% |
| HIP PRACTICES: | |
| Vision: | At Clinton Global Initiative, launched "Carbon to Collaboration"--investing $20 million in collaboration technology to drive 10% reduction in carbon emissions in 2007 through reduced air travel of 20% and increase in virtual meetings. |
| Metrics: | Limited scope of unifying performance measures; not yet unified into systematic scorecard. |
| Financials: | Beneficial energy efficiency and carbon savings; unclear revenue growth for markets that increase access; low turnover is stable. |
| Accountability: | CEO Chambers has semi-annual review, VPs quarterly, keeping close tabs on project specific results and bottom-line impacts. |
| Decision-Making: | More than 25 TelePresence video-conferencing sites globally encourages stronger decisions and cooperation while cutting travel costs and carbon emissions. (Another dozen sites scheduled to open in 2007). "Connected Real Estate" concept (on-demand office assignments and internet-protocol (IP) phones' adaptability) increased employee satisfaction, enhanced collaboration, reduced real estate costs by up to 37% and reduced infrastructure costs. |
| HIP OUTCOMES: | |
| Health: |
Low (5.4% voluntary) employee turnover and high (85%) employee satisfaction rate in FY2006 from collaborative teamwork and employee-friendly management style. About 35% of annual medical claims, or $72 million, associated with preventable conditions. Cisco introducing personal health coaching, via phone, Web, or in person, to help employees improve their individual risk areas, and target savings of $23 million. Back-up child-care program reduced the number of days employees missed work by 3348 days. ($1.5M savings to Cisco) |
| Wealth: |
Strong employee ownership generates retirement savings and investments. Broad-based stock options to all regular employees. Majority in hands of non-execs (below VP level). Average Cisco US employee salary is $112,000; approximately 40% of US employees participate in 401K program offered to all US employees. Financially astute investors can choose Self Directed 401K plan, but only used by every 25th employee (4% usage). |
| Earth: |
21% of US energy purchases are from renewable sources. San Jose HQ has onsite photovoltaic renewable energy saving enough to power 5000 homes, or $4.5 million in energy savings. Created product reuse and recycling program for customers: took in 4, 516 tons of equipment and recycled most; only 40 tons or 0.9% sent to landfill. Green house gas emissions fell by 2.3 % in FY06 due to ongoing energy efficiency programs, switching to more renewable energy, improving productivity of offices and labs. |
| Equality: |
Women make up 22% of Cisco's workforce; minorities constitute 43%; more gender balance needed, especially in higher ranks. 47 formal affinity groups in 27 countries for Cisco employees including Women's Action Network, Black Employee Network and Latina Network--boosting morale and engagement. |
| WHAT'S NEXT: | |
| Practices: | More specific sustainability goals and targets will mobilize typically-agile Cisco into new markets for communications, teamwork and connectivity. |
| Outcomes: | Also promised at Clinton Global Initiative, an urban development piloted in 3 cities: create urban infrastructures to enhance communication, people and vehicles--thus further reducing carbon emissions and improving quality of life (tele-work, traffic management, public transport, smart communities and new green business models--all of which should lead to more revenue, share and profit as well as tremendous societal impact. |
| OTHER RATINGS: | |
| KLD: Companies are rated from negative (0) to positive (6) in seven areas. | Community: 5.5 Governance: 2.9 Diversity: 4.5 Employees: 6.0 Environment: 4.4 Human Rights: 2.2 Product: 4.0 Included in KLD Indices for: Domini 400, Broad Market Social Index, Large Cap Social Index |
| Calvert Rating: Companies are rated on a scale of 1 (substantially below Calvert standards) to 5 (superior). | Environment: 4 Workplace: 5 Business Practices: 3 Human Rights: 4 Community Relations: 4 Included in Calvert funds: Yes |
| RESOURCES: | |
| Sustainability or CSR Report: | Corporate Citizenship Report 2006 |
| Annual Report: | 2006 Annual Report |
--Lisa LaMotta and R. Paul Herman
