Circularity is the new IT imperative

Economic benefits

Whereas environmental initiatives are often perceived as involving trade-offs, E-waste reduction is a win-win proposition with both economic and sustainability benefits. Best practices save materials and reduce waste management costs, create new business opportunities in refurbishment and recycling, and enhance the brand reputation benefits of proactive CSR.

Being green is good for business. Management consulting firm McKinsey says customers are willing to pay an average of 5% more for “green” products and estimates that reducing resource costs can improve operating profits by up to 60%. An overwhelming 87% of American consumers say they prefer to buy products with social and environmental benefits. Ernst & Young found that sustainable companies record higher gross earnings than 73% of their less-sustainable industry peers.

Despite broad acceptance of the need for businesses to become more sustainable, IT organisations have mostly lagged in adopting circular principles. A 2021 Capgemini report found that 89% of organisations recycle less than 10% of their IT hardware, 57% of technology executives are unaware of their organisation’s IT carbon footprint, and nearly half lack the tools or expertise needed to adopt and deploy circular IT solutions.

IT challenges

IT executives are under pressure to show progress against CSR goals. In addition to the E-waste problem, data centres consume about 1% of all electricity globally and 2% in the U.S., making them major sources of carbon emissions. The U.S. Department of Energy estimates that a typical data centre consumes 10 to 50 times as much energy per square foot as an office building. Data centres and power generation facilities are also major consumers of water, a resource that has grown more precious amid climate change-induced droughts.

The current environment most IT organisations face creates impediments to becoming more sustainable.

• Budget-strapped chief information officers (CIOs) are tempted to put short-term savings ahead of long-term sustainability benefits, causing them to opt for cheaper but less environmentally-friendly products.
• The fast pace of technological advancement causes IT equipment to quickly become outdated. Rapid obsolescence encourages a culture of frequent upgrades and replacements, with recycling and sustainable disposal treated as an afterthought. The value of older equipment falls so quickly that there is little incentive to remarket it.
• The IT industry relies on complex global supply chains that are often opaque and difficult to understand. Verifying that vendors at all stages - from raw material extraction to manufacturing, distribution, and disposal - are embracing sustainable practices can be seen as “nice to have” information that is easily overlooked.
• Chronic skills shortages distract from big-picture initiatives. IT departments do not necessarily prioritise sustainability because it's not top of mind due to the ever-present need to get projects out the door. Sustainability practices have not historically been part of university computer science curricula, although a growing number are now including the topic in their curricula.
• For practical reasons, CIOs prefer to do business with a small number of strategic vendors. This can lock them into long-term contracts that make it prohibitively expensive to switch to vendors with more sustainable practices.

The burden of becoming more sustainable doesn’t need to rest on the shoulders of the internal IT group alone. By leveraging partners at every step of the procurement, usage, and retirement process, IT organisations can rapidly advance sustainability practices that reduce costs and recover value from equipment that would otherwise be discarded. Understanding how to do that starts with exploring the circular economy asset lifecycle supply chain.

The supply chain and the circular economy

The IT asset supply chain spans all stages, from raw materials extraction to the usage of finished products. The corresponding assets supply chain is a circular system consisting of six stages that progressively build upon each other as materials are refined, components are assembled, and equipment is purchased, deployed, and ultimately reused or retired. Each stage presents an opportunity to apply practices and levers that foster a circular economy-providing both sustainability and business benefits.

1. Material extraction and conversion

   At this first stage, raw materials such as silicon, germanium, gallium arsenide, and precious metals are processed into a form that enables them to be used to manufacture electronic components. Most are extracted through mining, an environmentally harmful process. Recovering materials from existing IT hardware can minimise unnecessary disposal and reduce the need for mining of net new resources.

2. Parts and component manufacturing

   Raw materials are refined and formed into finished parts such as transistors, diodes, integrated circuits and microprocessors. These are assembled into the subsystems of computing devices like central processing units, storage devices, power supplies, displays, network interfaces, and specialised adapter cards. Many of these components can be recovered from existing equipment through a “demanufacturing” process that combines extraction, testing, recertification, and redeployment to assembly lines.

3. Device design and manufacture

   At this stage, components come together into a finished system like a computer, printer, or display. Many parts in these devices are task-specific and change little over time. They can often be extracted from existing end-of-life equipment and reused in new devices. A refurbishment process re-images components, tests for compatibility, and deploys them for incorporation into new devices. Design plays an increasingly important role in sustainability. Electronics manufacturers are stepping up their use of biodegradable or recycled plastics, standardised parts, low-powered hardware, and products designed to be disassembled and reused. IT organisations can contribute to corporate CSR initiatives by choosing to do business with suppliers that adhere to established sustainability best practices and standards.

4. Retail and wholesale distribution

   Buying refurbished equipment is a sustainable practice and a smart use of budget dollars. Many IT equipment makers sell used and refurbished hardware at an attractive price point, and often with full warranty coverage. Purchasing a refurbished computer not only extends the asset’s lifecycle but also reduces E-waste by keeping equipment in circulation, and avoids the environmental impact of manufacturing new devices. This choice leads to lower greenhouse gas emissions, aligning with the sustainability objectives of many enterprises that prioritise CSR goals.

5. Configuration and deployment

   Asset configuration and redeployment ensures that hardware is repurposed within the organisation to maximise its value. Maintenance activities keep assets operational and reliable. Refurbishment breathes new life into older hardware, extending its useful life. While this stage holds high potential for sustainability gains due to the asset being redeployed as a whole, it requires ample storage space for those assets that are not currently in use. Organisations must also develop plans to enable smooth transitions during hardware upgrades and logistics in order to move assets between locations.

6. Asset usage

   Another area of high business and sustainability impact, this stage applies best practices to ensure that assets are properly managed and tracked throughout their lifecycle, thus minimising unnecessary purchases of new equipment. It encompasses device maintenance, asset tracking, storage of replacement equipment, imaging, kitting, tracking, logistics, and reporting. Regular maintenance such as cleaning, reformatting, and re-imaging a slow PC or laptop can improve performance dramatically, as can adding system memory or replacing a hard disk with a speedy solid-state drive.
   
   Equipment that is too old to be used in the workplace may be redeployed for less intensive uses as print servers or network firewalls. When internal reuse isn’t practical, charities frequently welcome donations of older equipment, provided that the data on these devices has been securely wiped. Some companies even offer end-of-life devices to employees at a discounted rate for use as home file servers, media players, backup devices, and DVRs. In all cases, disposal should be a last resort.

When all options for reuse and refurbishment have been exhausted, end-of-life equipment should be disposed of responsibly in a secure and sustainable manner. Experienced IT asset disposition (ITAD) companies can maximise value out of even old equipment through component remarketing and precious metals recovery. They also ensure sustainability and data security best practices are followed. A certificate of destruction (COD) verifies that the process is complete and provides an audit trail for regulators and auditors.

Pillars of effective IT asset management in a circular economy

A few basic principles should guide IT organisations in thinking about sustainability:

Avoid unnecessary purchases

The best way to avoid contributing to the E-waste problem is to derive the greatest value from what you already have. Actively managing assets maximises existing resources and minimises the need to purchase new equipment. Many computing-intensive applications can be moved off desktops and local servers and run more efficiently in the cloud. Old PCs can continue functioning as smart terminals while the bulk of the processing occurs in efficient and sustainable hyperscale data centres. Cloud providers’ economies of scale and shared infrastructure make them more efficient at processing data than local data centres and all have ambitious programs to reduce power consumption and carbon emissions.

Cloud computing has reduced the need for powerful desktop devices. One example is virtual desktop infrastructure. It delivers a full, personalised Windows or Mac experience from the cloud to thin clients on the desktop. Performance is comparable to or even better than that of dedicated PCs. Security is enhanced because there is no need for local storage and no risk of viruses infecting endpoint devices. Power needs are dramatically lower. Updates and patches are applied centrally and distributed automatically to all users, freeing IT administrators from that task.

Optimise the IT asset supply chain

An essential tenet of circularity is to reduce moves along the supply chain. The optimal circularity benefits are realised at the bottom of the IT asset supply chain - asset usage and configuration/deployment - because they require the least effort to extend and reuse existing equipment. Reprocessing and remanufacturing create transportation and labor costs that can be avoided if devices can be kept within the company's facilities or the immediate area. If recycling and remarketing services are needed, contract with a single vendor that provides a secure chain of custody, to ensure data security, supports sustainability best practices, and maximises the value of your assets through recycling and remarketing.

Data destruction is crucial in the ‘data security danger zone’

Final disposition of data-bearing IT equipment and electronic media at their end of life carries the greatest risk of exposing sensitive data through a breach. All data on these assets should be destroyed, and a certificate of data destruction should be provided. ITAD specialists have software that can wipe data across very large numbers of machines providing time efficiencies and data destruction documentation to support requirements and mandates. They also have access to specialised destruction equipment, such as shredders, that pulverise hard disks into tiny particles that can be refined and reused downstream. Degaussing is also a reliable method for data destruction.

Simplify IT asset tracking and management

IT asset management (ITAM) asset discovery can scan the organisation's network to identify all connected devices and software. This can include servers, workstations, laptops, mobile devices, any network-connected hardware, as well as installed software applications and operating systems. Detailed information can be collected about each asset - such as make, model, serial number, specifications, installed software, and configuration settings.

Asset tracking contributes to sustainability by reducing purchases of new equipment to replace devices that have been lost or misplaced. It also enhances data security practices by ensuring that lost or stolen gear can’t be used to access corporate networks.

The way forward

Transitioning toward a circular economy within IT organisations is both environmentally responsible and good for the business. As the challenges of E-waste and unsustainable resource consumption intensify, the adoption of circular economy principles offers a viable pathway for IT organisations to mitigate environmental impacts while simultaneously enhancing their operational efficiency and brand reputation.

Sustainability is increasingly recognised as integral to business success, evidenced by the growing commitment of CEOs and the widespread publication of sustainability reports. The journey is complicated by multiple factors, including the rapid pace of technological obsolescence, the complexities of global supply chains, and the need for cultural and organisational change. Despite these challenges, the potential rewards are immense, promising significant reductions in E-waste, greenhouse gas emissions, and energy consumption - as well as economic benefits through cost savings, new business opportunities, and a strengthened brand image.

By embracing the circular economy, IT organisations can lead the way in fostering a more sustainable, resilient, and prosperous future, underscoring the critical role of technology in addressing the pressing environmental challenges we all face.

_{^{Gartner, Best Practices for Device Sustainability in End-User Computing, Autumn Stanish, Annette Zimmermann, Katja Rudd, Stuart Downes; 13 March 2024
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