2020 Sustainability Report Our sustainability practices and policies are designed to help us operate as a supplier of choice, an employer of choice, and a neighbor of choice around the globe. Our 2020 report contains some exciting developments since our introductory report issued two years ago, and it provides more focused insights into material areas for us, as well as a mapping to the reporting frameworks of the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). We continue to be a member of the Responsible Business Alliance (RBA) and have adopted the principles set out in the RBA Code of Conduct, which establishes standards to ensure working conditions in the electronics industry supply chain are safe, that employees are treated with dignity and respect, and that business operations are environmentally responsible and conducted ethically. Fundamental to these principles is the understanding that a business must operate in full compliance with the laws of the countries in which it operates. Importantly, we require our suppliers to adhere to these same standards and principles. A message from Gary Smith We take seriously our role as stewards of the global networks that connect and bind us together with family, friends, colleagues, customers, and partners around the world. This has never been more pronounced than in a global pandemic, when nearly everyone has been affected by unpredictable and challenging circumstances. We are dedicated to enabling greater connectivity that improves the lives and experiences of people around the world and, in so doing, drives a sustainable digital future. Our continued progress across multiple dimensions of sustainability is rooted in our people, who are undeniably our single greatest asset. Through their collective efforts, we achieve exceptional engineering feats, impactful social programs, progressive people initiatives, and upstanding governance practices. This means that we are not merely a technology leader. We are also a sustainability leader. And enhancements since our last report, including a few highlights below, illustrate our commitment to making a difference and our drive for continual improvement. Innovation leadership and sustainability go hand in hand At a time of exploding network traffic and service expansion, our greatest impact on the environment is through our technology innovation, which continually allows our customers to ‘do more with less’—less power, less space, and less cost. For more than a decade, our WaveLogic™ coherent modem solutions have been redefining networking, repeatedly raising the bar on performance and yielding immense sustainable outcomes. Through the end of fiscal 2019, energy-efficient product innovation related to our first four generations of this technology enabled network operators to avoid more than three million metric tons of CO2 emissions. That’s the equivalent of emissions from burning nearly 3.5 billion pounds of coal, or the carbon sequestered by more than 4 million acres of forest each year—roughly the size impacted by the 2020 California wildfires. And we’re not done. In fiscal 2020, we released and began to deploy our next-generation WaveLogic 5 Extreme, the industry’s first single wavelength 800G solution. It leapfrogs the nearest competitive offerings with 50 percent more capacity and a 50 percent improvement in space and power consumption as compared to its previous generation. Driving further sustainability outcomes, our footprint-optimized WaveLogic 5 Nano is a technology that is tailored to address even lower space, power, and operational requirements, including those of data center interconnect applications. Beyond our product design, we are increasingly focused on the environmental impact of our operations. In partnership with Tree Nation, we offset 43 percent of our operational emissions from fiscal 2019, completely mitigating the impact of our site energy consumption and business travel during the year. We also established a cross-functional Environmental Steering Committee to further integrate sustainability thinking throughout our business practices and decision making, and to drive targeted goals that address our emissions and impact on the environment. Through deliberate programming and offsets, we have committed that our operations will be carbon neutral by 2024. And, we will be evaluating adherence to a science-based target and limiting the impact of our operations to support a goal to keep the earth’s temperature below a 1.5°C increase from pre-industrial levels. Investing in our people and authentic culture We benefit from our outstanding employees bringing their ideas, motivation, and full capabilities to life. That’s how they enable us to force the pace of innovation and redefine what is possible. It’s our goal to give them a vibrant and inclusive environment where everyone feels they can belong. Investing in our employees and their total wellbeing, offering innovative compensation and benefits, and adopting progressive people management practices are core elements of our corporate strategy. We’ve made meaningful strides across these vectors, including a significant emphasis on safety, mental health, and supplemental benefits during the pandemic. During fiscal 2020 we launched our People Promise, focused on fostering an environment where employees can make a difference, are empowered, and feel included. To reinforce our unique and authentic culture and our adoption of best practices, we also created and resourced new, dedicated functions focused on Diversity, Inclusion, and Belonging initiatives as well as Corporate Compliance and Ethics, and we’re excited to see the outcomes of these new levels of focus. Using our core strengths as a force for good in our communities Through our social and community engagement, we aim to mobilize our core strengths—our people, innovation and partnerships—as a force for good that is a natural extension of our business. In the face of the pandemic, we enhanced our Ciena Cares program, which provides corporate matching for employee charitable donations and volunteer service. During fiscal 2020 we provided more than $1.7 million in matching dollars to support the organizations that our employees are passionate about. In truly inspiring ways, our employees volunteered nearly 6,000 hours of commitment and energy in and around our communities. To reinforce this culture of service, we have set an enterprise goal to collectively volunteer at least 20,000 hours in fiscal 2021, including the promotion of virtual volunteering. In fiscal 2020, we launched our Digital Inclusion initiative, focused on supporting underserved students in our communities around the world. Under this program, we have committed $10 million over five years to expand opportunities for 100,000 students by enabling greater digital connectivity for an exponential societal impact, including through access to computing technology and skills. Among other programs, we recently partnered with Verizon Innovative Learning, which targets under-resourced Title 1 schools across the U.S. to bolster remote learning and support digital inclusion. Through this partnership, we have already provided connected devices for students at Hubbard Media Arts Academy in San Jose, California, and Baltimore Design School (BDS) in Maryland. We are collaborating with Spark, a telecommunications and digital services company, to help address digital inequity in New Zealand by providing free in-home internet access to eligible students in decile 1 high schools. We are only just getting started and are confident that we have the know-how, energized workforce, and partnerships to drive outcomes that help bridge this opportunity gap. Our work continues We have done much more in the past several years, and I hope you enjoy reading this Sustainability Report to learn about our achievements and future objectives. We believe it is vitally important to be good stewards of the Earth, supporters of the communities in which we work and live, and business partners to our customers and suppliers. Our legacy will ultimately be what we do to make a difference. Sustainability is both a priority and an opportunity to create value for us, our employees, and the communities in which we operate. We are confident that our sustainability initiatives provide us a competitive advantage in the marketplace with our key stakeholders, while enlivening and providing meaning to our work. We are committed to being part of the solution, creating a more sustainable future, and enabling the world to be a better place for all of us to live, work, and thrive. I am extremely proud to be part of the Ciena family and our many activities that promote a better, more connected world. Sustainability maturity We continue to enhance our overall approach to sustainability, and we validate that approach on an annual basis through an independent, third-party sustainability assessment conducted by industry leader EcoVadis. In 2020, our rating increased, resulting in the award of a "Platinum" medal reflecting our ranking in the top 1 percent of all assessments conducted. Materiality In 2017, we conducted an internal materiality assessment to identify the Environmental, Social, and Governance (ESG) topics that are most important to our business and our stakeholders. These topics represent our sustainability focus areas over the period of this report, the results of which are set forth in the materiality matrix below. Our materiality assessment process included the following: Topic identification: We identified topics based on the GRI and SASB frameworks and the guidelines of the RBA. Prioritization: We gathered feedback from internal and external stakeholder groups and then prioritized the topics by evaluating the level of stakeholder concern, relevance to us, and our ability to influence the issue. Material topic validation: After rating the significance of each element on a four-point scale, elements were classified into 13 categories under either the environmental, social, or governance topic areas. We used aggregated ratings across the stakeholder groups to determine the relative importance of each element. Through the process outlined above, we determined that the three categories of greatest importance are governance, employee diversity and development, and supply chain. COVID-19 response The COVID-19 pandemic affected all of us in meaningful ways. Of paramount importance to us, we’ve taken extensive measures to ensure the safety and wellbeing of our employees and our extended family of customers and partners around the world. We activated our business continuity plans to ensure that we continue to operate with minimal disruption. The vast majority of our employees are working remotely, not traveling, and practicing appropriate social-distancing and hygiene recommendations. We also shifted our engagement strategies to digital platforms and virtual collaboration tools so we remain in touch with one another and our customers. At a higher level, as a key supplier to the telecommunications industry, we are custodians of the immense networks that connect and bind us together. In a world where physical distancing is common, it is the network that keeps us connected to loved ones, friends, colleagues, and important services. The network and its ability to connect people has a tremendous role to play in helping the world navigate and overcome the challenge of this global pandemic. As a key enabler of innovations that drive network connectivity, we have a responsibility to do everything we can to ensure that network operators can deliver critical next-generation connectivity at all times, especially during this crisis. Our customers are reporting rapid growth in bandwidth demand resulting from the dramatic shift in how we are living today. These demands stem from the exponential rise in remote working to maintain the flow of business and commerce; a shift to distance education so our children continue to learn and develop; and a rise in e-gaming and streaming entertainment for the reprieve we all need. Importantly, our technology is essential for governments to coordinate efforts and communicate instruction to citizens, and for the healthcare community—from first responders to hospitals and telemedicine to medical research—to treat patients and contain the spread of COVID-19. We are on this journey together, and we are honored that we play a critical role in serving the world’s connectivity needs. We have the industry’s leading innovation, the global scale and reach, and the financial and operational strength to deliver on this promise now and as this situation continues to evolve. We remain focused on delivering networks that can successfully adapt to ever-changing demands so that people and companies can maintain their connections. Our COVID-19 response Employee safety and wellbeing Prioritized employee health and safety, following Centers for Disease Control and Prevention (CDC) and other relevant guidelines Temporarily closed offices globally Required vast majority of employees to work from home Instituted business travel bans and restrictions Adopted new pandemic leave and work-from-home benefits Launched wellbeing initiatives focusing on mental health Business continuity Established a COVID-19 business continuity planning team Implemented business continuity plans to minimize business disruption Mitigated supply chain disruption, including through multi-sourcing Met customer fulfillment needs despite disruptions in ability to provide services and access sites Invested significantly in digital platforms and virtual collaboration, enabling a smooth transition to remote working Financial resiliency Increased profitability despite slowdowns in customer spending and business velocity that negatively impacted annual revenue Demonstrated a resilient operating model and ability to continue to invest in innovation leadership Strengthened balance sheet and generated cash flow After a temporary pause, reinstated stock repurchase plan in first quarter of fiscal 2021 Community outreach and support Tripled corporate matching for employee charitable donations and volunteering through the Ciena Cares program Offered 2500+ virtual volunteering opportunities Extended volunteer rewards beyond non-profits to include neighborly acts of kindness Donated personal protective equipment Designed and 3D printed face shields and components for healthcare workers Launched digital inclusion commitment to provide greater opportunities for underserved students through access, technology, and digital skills Participated in joint digital inclusion community projects with business partners Tweet Post Share Email Ciena is proud to have been designated as a certified "Great Place to Work" for 2020. 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