Cisco's Climate Change Commitments

achieve net zero emissions by twenty and more. Friend Katsudas is a longtime Cisco Exact executive vice president and Chief People, Policy and Purpose Officer, and she joins Tim and me in our Bloomberg Interactive Broker studio. So good to see you again. Nice to see you too. Thank you. I feel like I do have a million questions for you, but we'll get as much as we can get in.

First of all, before we get into sustainability, I do want to ask you about the visibility you see when it comes to your business and the company and hiring. What does it look like right now? And we're coming off a FED meeting, we feel like we get a little bit more clarity. The markets certainly read it that way. What do you guys see so we see a tremendous amount of opertun unity. What's so fascinating is, throughout the pandemic, we saw so many of our customers wanting to move

a little bit more quickly. From a transformation perspective, we saw that the issues they had been thinking about, they were ready to move. So what that means for us is we see a lot of investment in how they securely connect their thinking about having employees both on site but also working from home, and that's a different technology play. From a people perspective, this has been one of the

most remarkable times. Right now. People are talking about this period as the Great Resignation, and what they mean by that is we see a tremendous amount of people movement as well. Yeah, really important question when we think about the way that people are changing jobs, the way that people are potentially leaving the workforce. I want to go back to something you said about the transformation that you

saw throughout the pandemic. Do you see this as a permanent shift with a lot of your customers that their employees could be working from home forever. I think a lot of our customers are figuring that out, So I would say that there's a subset of our customers that absolutely have found greater productivity, they see better employee engagement, and they're going to continue to work hybrid. I don't see as many absolutes where people are either going to be all in the office or at home. I think

they're figuring out the balance. And then there's a subset of our customers that want to go back, and that's something that we really questioned around can we go back? And the reason I put that forward is that employees around the globe are telling us that they want to work in a very different way. I mean, the horses left the barn right when it comes to hybrid work, I think it's safe to say that there's probably been tons of focus groups pre pandemic. Can it work? And

it not? Maybe we're not ready. I mean the pandemic, we had no choice and it worked. Yeah. That's why we refer to this last period as not only challenging from a human perspective, but an experiment around work where we've learned a lot. And I think for some companies this question that they had has now been answered and that they can work, they can innovate, they can collaborate, and in some cases they can be even better with this hybrid because they can get to talent that in

the past they couldn't before. Well, how has the talent acquisition process been? How has talent retention been at Cisco Systems. You said that some people are referring to this as the great resignation. We hear about the labor struggle that employers are facing right now. Um, tell us what it's been like for you and FED Chief J. Powell talking about it's a really tight labor force. It is, so

we experienced that as well. What was so fascinating was when when we first went into the pandemic, we paused for a few weeks just from a hiring perspective, and we were just kind of getting our legs under us and understanding what this was going to be. And then we had this realization that we were in this for quite some time, and we started the hiring process, and what we found was leveraging video, leveraging the interview processes

that we have, we hired like never before. And in fact, I would tell you that last year was probably one of the biggest hiring years that we've had as a company azing and so many employees have never met any of their colleagues face to face. It's a position I then I start in October last year here, yeah, exactly, and there's people that he's now meeting. Is like I've been talking to you, you know, via remote, and now I'm finally meeting you. It's it's a very different world. Yeah.

I had a really funny experience last week where two colleagues were meeting. I happened to be there and one of the colleagues that we're friends though, even though I'm meeting you for the first time. And so what I would say is for all companies, we do see that there is a reduced labor pool. We're working incredibly hard to differentiate ourselves, to talk about what we stand for, and to attract the talent that really wants to be with us as well. We've got about forty seconds. Then

we'll come back and talk more. Do you have to pay up more? You do, because whenever you have a market where there's a tremendous amount of movement, employees are going to an opportunity and they expect at least a three five percent increase. Okay, is that what you've done three or if you had to go even higher We've heard stories about, you know, double digit increases for salaries. It varies based on the market, but yes, it's a huge challenge right now for many companies to expect it

to continue. I just tight for a while. I int next year. Yes, I love her. All right, We're gonna continue with Frank cassudas over at Cisco Systems. You're listening to Bloomberg Business Week and this is Bloomberg Radio. We are here with Frank Cassuda. She's executive vice president, chief People, Policy and Purpose Officer at Cisco Systems here in New York, normally based on the West Coast, but you were reminding us that Cisco get a pretty big presence here in

the UH here. Yes, in the United States, in New York specifically, we do. It's such an important market for us, so so many of our customers are based here. It's a great place for talent, a lot of the technology as well. We're actually in the process at the moment of remodeling our presence here in New York, and big part of that is hybrid work, and so we're thinking a lot about when you come into the office, how

will you work? And so I think you'll see our presence in New York look very different from what it's been in the past. What do you mean by that? How how is it going to be different? So the biggest differences fewer people will come into the office to work on email or to be in video call. So when you come in now, you're coming in to be with your team, You're coming in to be with customers. And so the site has to be so much more

team centric than ever before. And so you're going to see a lot fewer of the cubes and the individual offices and a lot of huddle space. So physical changes absolutely. Do you need A big question that Fran we've been talking a lot about is what is the use of commercial real estate going for? You still need to have space though, or do you need less? I think it's both. So I think that all companies right now are assessing how they're going to work, how much space they need.

What we're finding is there's a lot of investment in spaces now, either for safety reasons or an expectation of people coming back and really wanting to just upgrade the space as well. How are you thinking about your presence in New York in the future in terms of headcount. Yeah, I would say it's uh it's a really important growth area for us, and so we look at about five key areas across the US. New York is one of them, and so we will continue to to hire and really

attract and recruit the best. You talked about it being a tight labor market. What's the New York labor market right now for the type of workers you're looking for. It just got about fifteen seconds. It's incredibly competitive, and uh so this is a place where the wonderful thing is you see the skills that we're looking for, but you see that the talent has a lot of different options.

We're still here with brand Kasudas, she's executive vice president, Chief People, Policy and Purpose Officer at Cisco Systems here in our interactive broker studio. So talk to us about the new commitments. Earlier this month, you guys laid it out planning to achieve net zero emissions by achieve carbon neutrality for Scope one and Scope to UM and that I believe is by so go into it because you guys have been doing this for a long time. What's the difference. What's the new new stuff that we need

to know about? Yeah, so I would say we have been doing this for a long time. And here's the most important part for companies to achieve these goals, which are really big and even bigger if you're a hardware and software company. Uh, it takes every part of the organization to be focused here and it has to feel like a key part of run in your business and not something that sits on the side. Because these goals are pretty significant. And so we've been doing this for

a long time. The four big areas that we're focused on right now. The first is hybrid work. As we talked about, We believe that will be incredibly positive for us. The second thing that we're doing is really focused on the reduction of carbon emissions, and uh, we're investing in technologies that I think will give us all optimism. Uh.

There's a company that we invested in called Rama. They actually won a prize with us, and they're doing carbon capture for large semi trucks and that is so important. The third area that we're focused on is all about renewables and so, as an example in the US were

renewable electricity several countries across Europe as well. And we'll just keep on pushing, and then I think another element, and this is the most exciting, is we're looking at the way in which we're developing our products which really power the Internet. And one of our new products, Silicon one, is a chip set, and what it does is it reduces the amount of energy that our customers use by

twenty six times. And in addition to that, it's much smaller than previous products, so it doesn't take as much packaging. And so when you have this type of breakthrough across your portfolio, it's going to be incredibly meaningful. What is the biggest challenge that you think you're going to face when you try to achieve net zero emissions? Because you know that's not that far away, So the biggest challenge. And then there's people like me, I'm like, why can't

we do it sooner? Come on? Fran always like, that's well, think about this. So what you're solving for with Scope three, which our commitment is, is you're solving for the way in which your customers are using your products. You through the whole change and so you go through the entire supply chain. And so the interesting thing is what we control the Scope one and two and so that we're doing is a much more challenging play because it's Scope three and we have to look at everything do and

scope one. I had to learn a lot about this. I had talked with Brand for a panel for you here at Bloomberg. Scope one is direct greenhouse emissions that are controlled by the company Cisco. Scope too is indirect emissions from things like electricity generation of that steam heating cooling. But you're right three is you're really pushing further out. Every single thing that your company creates with your customers is what you saw for and Scope three, how much

of that is in your control? So this is where it gets complex, and this is where we're right. This is why it's so wonderful right now that so many companies are coming forward with commitments, because it's going to take all of us to achieve this. We're going to be so dependent on our supply chain, and so we've been working with them for ten years. But there's a lot of work that we need to do to get there and to make it something that feels like it's

within our control. The only other thing that I would add is there's also some some new I think um baselines that are being established. We just signed the Race to Zero. That's something that we're really proud of because, as you know, that's a concern stint threshold, it's scientific. We're doing that together as part of Global Citizen, with many of our peers and industry, and it will have

tremendous impact as we move forward. I guess what's interesting too, is I wonder about the conversation that's going on when it comes to climate change. We heard a President Biden talk about it other world leaders. Is the conversation the right one, especially since you guys have been doing this for a while. Our people taking it seriously, maybe more seriously after the pandemic where we saw as the world shutdown, skies were clearer like we saw the impact, but we've

also seen fires on the West Coast. We've seen what climate change is doing to our world. I think the conversation could be so much more opportunistic. I think if we all look at some of the benefits from a business and from a planet perspective in doing these things. I mentioned one of our products. Our customers love that product. It is one of the fastest out in the marketplace.

That's a win for us. And did your customers put more pressure on you guys after the past year or so or a couple of years when it comes to climate change and saying yes, And I think that helps. I think the more that our customers can share with us what they're trying to achieve will work together. But I think the conversation right now is so focused on the downside as opposed to the opportunity, and if we look at the business, I think we'll have a different

approach to it as well. We got a hot headline coming in that I just wanted to break. The White House is weighing invoking defense law to get chips supply data. Gena Amando gives firms forty five day deadline for chips supply details. The Commerce chief is concerned about chip bottlenecks and stockpilot. So essentially, this is a Cold War era national security law of force companies in the semi conductor supply chain to provide information on inventory and sales of chips.

When you hear something like this, I mean we the government is looking at supply chains, looking at things that are crucial to our security. What do you think, Well, I think it's something that we're all focused on at the moment, the supply chain challenges, even talking about Nike a little bit earlier to the chip element of it as well, I think we're going to have to get creative. We feel very fortunate Cisco. We have a great supply chain, but I think all of us are trying to navigate

through this and do best by our customers. But it's stressed right now, right it is absolutely give us an example of how it's stressed, of how you're experiencing that stress at Cisco Systems. So basically, like so many of our customers and partners, when you can't get access to a product or technology, we have greater lead times for our customers. The nice thing right now is because we're all in the same boat, I think our customers are

incredibly understanding. But these are important build outs and so we are doing our best to prioritize to work with them to ensure that we have the partnerships that gets us access to products as quickly as we can. But it's it's a challenge. One thing I want to just end with Fran because I felt like when I talk with your company's CFO and you about the conversations, I mean, you are a senior executive there. They have put sustainability,

people policy purpose at a very high level at your company. Um, financially, it makes sense for you guys to pursue all these initiatives. You see that, you see the payoff it does. It's a tremendous amount of work. I do think that the magic is that this type of work has to be both bottoms up and top down. And whenever we do

that at Cisco, we win. And so what that means is the people that are closest to the supply chain, the people that are closest to the travel policy, all of us working together, and then our executives owning it and holding us accountable and measuring is really the balance and how we win. All Right, we gotta run. Thank you so much, as we covered a lot of ground. Really really appreciate it. You are listening to Bloomberg Business Week and of course to our thanks to Franca Suda.

She's executive vice president, Chief People, Policy and Purpose Officer here at Cisco Systems. Here in our interactive broker studio. Not here at Cisco Systems. We're actually Bloomberg. It's been a long day, it's been a long week. It's been a long two years, right for its what it has. I'm just thinking, like, we're still this is such a big deal for her to be in person with us, right, And actually I did do a panel with Brand a while ago and it just virtually how they are doing it.

We did do it virtually. Yeah, but we're getting in person, which is great for the whole Business Week team. Have a great evening. This is Bloomberg