An all-encompassing approach to ESG gives Cisco an edge in the war for talent.
A prospective Cisco employee was recently interviewed for a job. When given the chance to ask questions, instead of asking about benefits or skills to succeed in the role, they said: “I read your purpose report. I’d like to know more about what you’re doing in that area.”
It may be new to have prospective talent reading up on a firm’s social impact, but employees have long been asking similar questions. Many years ago, Cisco staff pushed for the $51bn-revenue giant to make a minor, but significant, alteration to its in-house catering. “It was our employees who started asking, ‘Can we reduce our usage of paper cups?’” its executive vice president and chief people, policy & purpose officer Francine Katsoudas says.
Reducing paper cup usage will not change the world. But the active engagement of employees was indicative of a greater truth at Cisco: its ESG mission encompasses the whole organization. “We have a top-down and bottom-up approach to problem-solving in this area,” says Katsoudas. “We are lucky because we’ve been working on both approaches together. Our employees eagerly engage on this topic, and we bring, in some cases, a little bit of structure to help that process so that we can get to maximum scale as an organization.”
Today, environmental sustainability is at the heart of Cisco’s collective endeavor. It aims to reduce its use of virgin plastics 20% by 2025. Its new Cisco Silicon One chipset demands less than 4% of the power needed by its predecessor – yet commands 35% higher bandwidth. And its Cisco Foundation has announced a $100 million commitment over ten years to radically cut the industry’s carbon footprint.
Like the best ESG strategies, Cisco’s progression to the vanguard of tech sustainability couples venerable societal goals with invaluable commercial benefits. Tech is a sector riven with intense competition for skills – and Cisco’s ESG credentials give it a crucial edge in the battle.
There was a time when developing a future-proof sustainability strategy would have been perceived as a venture entirely separate to ensuring competitiveness in a tight labour market. Yet progressive companies like Cisco now recognize the two dynamics work in concert. Better sustainability credentials; a stronger ESG record; evidence of an enlightened approach to diversity, equity and inclusion: these all actively contribute to hiring the best of a new generation, for whom such issues are increasingly front of mind.
As the needs and expectations of employees transformed, so too did the role of the people organization. “We asked, ‘Does the name Human Resources reflect what we do and who we serve?’” Katsoudas told The HR Digest. “The answer was emphatically, ‘No!’ So we changed our name to People & Communities, which reflects who we are. We are a workforce of courageous ambassadors to the company, our people – and society.”
Recognition of the power of aligning people practices with the impact on the wider community led Cisco to create an innovative new organization called People, Policy & Purpose, bringing together functions that help drive impact on communities within and outside the company.
There is an important ESG lesson here: join-up your approach to environmental sustainability, the development of your people, and effecting societal change and you will gain commercially by excelling in the labor market. A sound ESG strategy is not a nice-to-have. It is a commercial imperative.
Sharmla Chetty is chief executive of Duke Corporate Education.