Working from Home Makes Companies Greener and Saves a Bunch of Money
His company’s customers don’t know this, but when Darrel Stickler joins a video conference from his home in Mendocino, California, he does the “newscaster thing” — dress shirt and sports coat up top, a pair of shorts down low.
“I admit to that,” says Stickler, the affable head of environmental strategies and initiatives at San Jose–based Cisco Systems who telecommutes four days a week.
Many companies now offer employees the opportunity to work from home at least part of the time. In fact, remote work has jumped by 115 percent in the United States since 2005, according to the 2017 State of Telecommuting in the U.S. Employee Workforce report by FlexJobs and Global Workplace Analytics.
Technology has enabled this increase, fueled by the growing awareness that some employees are happier and more productive at home or in a coffee house. And, by the way, businesses can save quite a bit money.
For Cisco Systems, a global technology company that makes teleconferencing and videoconferencing equipment, among its many products, the decision to use its own tech to both encourage telecommuting and reduce corporate travel seems like a no-brainer. What didn’t necessarily go into the equation when Cisco started these initiatives a decade ago is how much the company could reduce its environmental footprint.
Stickler’s home is set up with Cisco TelePresence, the video conferencing system that gets him at least halfway into his dress clothes. This system, along with his company phone and laptop, are run through a Cisco 800-series router that connects to the company’s global wireless system, essentially converting his, or any employee’s, home into a virtual office.
“It’s really just like being at work,” Stickler says. “It’s hard to overemphasize what a difference it makes versus having to connect manually. The productivity is exactly the same. And people can’t tell if you’re in the office or at home, because you’re not limited in any way.”
Cisco, which employs roughly 70,000 people in more than 70 countries, began its telecommuting program in 2007. Across the company, its employees now work from home an average of 1.4 days a week, or 30 percent of the time.
Not everyone can work from home, of course, because the ability to work remotely also depends on things like a country’s culture, distance from the office, and the preferences of the person in charge. Some managers prefer their staff on-site; Stickler’s boss likes to see him in person once a week, even though she has others who report to her remotely from around the globe.
Still, company policy encourages it, and for good reason. As a result of workplace flexibility — some folks work from home all the time, and part-time office dwellers share space — Cisco has avoided building or leasing any new office space over the past decade, even though its employee headcount has doubled. In fact, the company has exited roughly 5 million square feet of space over the past five years.
“It definitely has a material impact. It adds up to a lot of dollars, both from a real estate perspective and an energy perspective,” says Andy Smith, who leads the company’s internal energy management and sustainability team.
(Cisco does not break down or share real-estate cost savings publicly.)
“It also has a very positive effect on the environment,” Smith adds. “The greenest building is the one you don’t have to build.”
The elimination of office space, along with investments in renewable energy and energy efficiency, has contributed to a 40 percent reduction in greenhouse gas (GHG) emissions across Cisco’s operations since 2007. The company also estimates that by telecommuting an average of 1.4 days a week, its employees are avoiding approximately 60,000 metric tons of GHG emissions and saving approximately $84 million per year in fuel costs.
Indeed, FlexJobs and Global Workplace Analytics earlier this year released new data on the environmental impact of existing telecommuters in the United States. Assuming they work from home around half the time (2.5 days out of a five-day workweek), these workers cut the distance traveled in cars by around 7.8 billion miles a year, resulting in a GHG emission reduction of 3.6 million tons per year.
After introducing its video conferencing technology in 2006, Cisco also set a goal to reduce company travel by 10 percent, mainly as a cost-savings initiative. Over the past decade, the company has been able to achieve this goal, even though its revenues and employee headcount have doubled.
This is a pretty significant achievement, Stickler says, because prior to this initiative, the company generally saw a correlation between travel and growth. In other words, adding 10 percent more revenue, or 10 percent more people, generally meant a 10 percent increase in travel.
The company doesn’t release stats on GHG reductions from company travel, because calculations that go into avoided emissions from flights that might have been taken or cars that might have been rented feel a bit like “greenwashing,” Stickler says.
“The avoided emissions over 10 years is a very big — but also a somewhat theoretical — number,” he says.
That said, we do know that aviation is responsible for 3 percent of worldwide emissions—more than the emissions of the United Kingdom, Mexico, or Indonesia. One round-trip flight from New York to Europe or San Francisco creates a warming effect that’s equivalent to two or three tons of carbon dioxide per person, according to a New York Times piece. The average American generates about 19 tons of carbon dioxide a year; the average European generates 10 tons. So, if you take five long flights each year, they may well account for three-quarters of the emissions you create.
For Cisco, the cost savings of reducing business travel has been dramatic. In 2012, the company crunched the numbers and found it was saving more than $100 million a year in travel costs — airfare, hotels, rental cars, and the like. Cisco also estimated it was saving an additional $400 million in productivity gains.
“Employees that travel less have better work-life balance, which aids recruiting and retention, and they’re more productive,” Sickler says. “An employee can meet with five customers around the world in the time they might spend traveling overseas for a meeting with one customer.”