As new ESG reporting
mandates
start going into effect in the US, it’s easy to think that this new focus on
corporate consciousness means that a specific effort to tackle e-waste might be
right around the corner. It should be an exciting time, especially for those in
the IT asset disposition (ITAD) industry that have already championed
circularity —
a process that avoids waste by either reusing or breaking down electronics into
materials that can be used in the next generation of products and devices. But
slow widespread adoption of circularity is also a reminder of our industry’s
deeply ingrained transparency problems.
Transparency in ITAD has always been a difficult sales pitch, despite its
obvious benefits. In the short term, giving open access to your reuse and
recycling
processes
offers better overall traceability, more streamlined introductions between
parties, and new business opportunities for those that adopt it. Longer term,
it’s essential to building better client/vendor relationships, improved
communication, industry-wide standardization, education for the public and for
proving out circular applications of materials. A circular economy relies
heavily on supply chains regularly filled with well-processed, accurately
tracked materials in high quantities; so, cooperative transparency across the
industry is key. Yet, even as companies such as
Dell
have been working really hard to make this happen; and organizations such as the
Open Compute Project’s
sustainability working group has attracted representatives from Microsoft,
Facebook and Intel; the overall industry still lags behind — hampered,
in part, by a series of long-standing fears.
Facing our fears
Despite the benefits, common fears about transparency persist — that if
recyclers and ITAD companies are open about their practices or processes, then
those processes will be stolen and clients lost. Many are afraid that
competitors will use transparency as a Trojan Horse to take their vendors and
disrupt their pricing. Many companies consider their supply chain as their
Intellectual Property. After all, finding good, reliable vendors can be difficult
— and, in theory, if several companies vie for the same vendor, the competition
for quantities and quality materials could negatively impact the current rates.
Other companies legitimately have something to hide — they don’t want people to
know that they aren’t doing as much business as they say they are, that their
processing capabilities are lackluster or just that they use bad vendors. Or,
more commonly, they have a mix of reuse versus recycling that isn’t favorable —
recycling can be costly and companies would rather work with ITAD vendors that
remit value-recovery dollars on their assets, rather than be hit with
out-of-pocket fees for processing and recycling. But all of these fears are
worth confronting in order to increase transparency and make a circular economy
a reality.
Making real progress
Opening access to sustainable design
Join us at SB'24 San Diego (October 14-17) as Prakash Arunkundrum — Logitech's Head of Global Operations and Sustainability — shares insights from search for next-generation materials, components and processes to develop superior products with sustainability as a high design priority.
Breaking through these fears means recognizing some basic realities. Firstly,
leveraging the same vendors can actually be beneficial — both in terms of
environmental and business impact. For example, if one company ships aluminum to
a vendor because they are doing a great job and have great reporting, this can
allow a competitor to ship their aluminum to that same vendor too and reap the
same benefits.
This behavior at scale also tells other vendors that they need to step up their
game if they want to stay viable. In effect, a little transparency would have
the eventual impact of ending the idea of secret vendors’ lists and greatly
reducing their value as currency in the ITAD industry. Instead, reporting
capabilities and geographic footprint would be what separates companies. This is
actually a good thing — steadily increasing transparency using the natural
pressures of the market.
Outward transparency could be further encouraged simply by improving
communication within companies. For vendors, this means increasing collaboration
between outbound sales and compliance departments. Typically, compliance folks
are more ready to offer feedback to each other, both good and bad; so, they’re
critical in delivering reporting that sales teams can then communicate
outwardly. Having worked with various vendors throughout my career, it’s a huge
benefit when compliance is involved in organizations from the top-down, and a
big headache when compliance has no clue what's happening outside of the
warehouse with shipments, sales and inbound decisions.
For original electronics manufacturers (OEMs), better communication means giving
sustainability leadership a bigger role and louder megaphone. Yes, we've started
seeing some larger companies elevating C-level sustainability personnel who
supposedly have "power," yet most aren't allowed to set communications policies
or make decisions on vendors. For transparency to flourish, this needs to
change.
Our industry needs to put their money where their mouths are when it comes to
building a circular economy. Setting sustainability goals is a great first step;
but to achieve them, they need to commit to transparency and communication. Yes,
it will mean upsetting the status quo — forcing everyone to adapt to a market
that looks a little different. But it’s also the best way to create a system
that is both beneficial to the planet and profitable for businesses in the
future.
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Published Dec 9, 2021 7am EST / 4am PST / 12pm GMT / 1pm CET