Column, Chandran Nair: Ethical Corp

If IT companies are committed to reducing their environmental impacts, they must take far more responsibility for what happens to their products once they are thrown away, says Chandran Nair

At the World Economic Forum in January this year, Bill Gates called for a new “creative capitalism” that helps the poor while delivering profits. The Microsoft founder and other IT leaders should be lauded for their efforts in promoting development and alleviating poverty worldwide. But one wonders why their dedication stops short of addressing their most direct duty as beacons of the IT world – their responsibility, as producers, to tackle electronic waste.

It would seem logical that IT companies should be particularly concerned with the life cycles of electronics products, given the damage these cause globally. Discarded computers, mobile phones, routers and other equipment contain numerous toxic materials such as lead, mercury, cadmium, chromium, brominated flame retardants and polychlorinated biphenyls – to name a few.

It is estimated that in the US alone as many as 40 million personal computers become obsolete every year. But PCs are just one product. If all sources of e-waste are considered, the total global amount could be as high as 50 million tonnes a year, according to the UN.

Despite so-called sustainability commitments, IT companies are driven by financial incentives to relentlessly produce newer products, making electrical equipment the fastest growing category of waste in many developed markets.

Some of this discarded equipment is recycled and disposed of safely. HP and Dell, for example, have been praised for offering recycling to customers and for using more eco-friendly components in new machines. But less than 20 per cent of the e-waste in markets like the US is marked for recycling; the rest ends up in landfills (including in the developing world), or is left in storage. Of the goods that do make it to the recycling process, 80 per cent get shipped to developing countries such as China, India and several in Africa, where much of the waste is scavenged by the poor who make a living by extracting valuable metals and components for cash.

In countries such as China the high-tech scrap imports business reached its peak in 2003. Since then the government has implemented strict regulations to curtail these imports, but in many places the damage has already been done. An article in the January 2008 issue of National Geographic described the air and soil near some salvage sites in cities such as Guiyu as being saturated with dioxin, a lethal carcinogen, which may cause endocrine and immune system problems.

Systemic change

The horrifying impact of e-waste is plainly visible in many developing markets. But instead of taking swift action to clean up the mess, IT companies spend their time debating the issues at forums such as the Global eSustainability Initiative – platforms that appear to shy away from influencing regulatory policies or commercial arrangements in a way that would bring about change.

Major IT manufacturers, including HP, Microsoft, Dell, Ericsson, Philips and Cisco Systems, are engaged in programmes such as the UN-led alliance Step (Solving the E-waste Problem). This public-private partnership has companies aligning with UN agencies and governments, civil society groups and recycling companies to formulate global management guidelines for e-waste. But here again the efforts tend to focus on research projects and workshops.

At best, companies work towards donating obsolete machines to charities, putting the onus for regulatory and enforcement regimes on developing countries.

Faced with the lack of enforceable international regulations, and the inevitable trickling of e-waste to developing markets, what should IT companies do to embrace producer responsibility?

The first step if they are to heed the call for “creative capitalism” is to make producer responsibility a core value of the industry. Each of the major players should establish for themselves, as part of their corporate responsibility commitments, recyclability targets for the design, manufacture and disposal of their products.

The next step is for these “innovators” to establish the best supply chain networks to handle the e-waste and in that process establish recycling businesses in the developing markets. These businesses could be established as joint ventures with local partners and, given the expected growth in countries such as China, have the potential to develop into substantial ventures.

To accomplish this, companies need to move beyond the passive end-of-life management policies they currently support, to take a more active role. No doubt the recycling infrastructure (such as reverse assembly-lines) that is needed to make this operational will require investments by these companies – the financial commitment could between $5 million to $10 million for a facility in China. But if the likes of Microsoft, Dell, and HP are truly committed, they can work with local governments to end the illegal salvage operations that still exist in developing countries, while creating employment and profits. That would be true corporate responsibility that would also provide a return on investment.