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In an era where environmental concerns have reached unprecedented levels, businesses across all industries face the imperative of adopting sustainable practices. Among the various industries around the globe, the technology sector has emerged as a prominent player, recognizing the pressing need to prioritize green initiatives.
With growing consumer awareness and demand for eco-friendly solutions, tech companies have realized that sustainability is no longer a mere trend but a critical driver of success that has a significant impact on their bottom line. According to research conducted by Deutsche Bank, companies with high ratings for environmental, social, and governance (ESG) have a lower cost of debt and equity. These findings were corroborated by MSCI in 2020.
Additionally, the findings show that companies with high ESG ratings outperform the market in the medium and long term. Further, by implementing stewardship-focused programs, companies have not only seen growth in their financials but also in brand awareness.
By adopting circular economic models, implementing waste reduction programs, and increasing their focus on extended life cycles of their assets, companies are creating a shift toward doing business from an eco-friendly perspective. This shift has created the need for companies that specialize in helping large organizations develop sustainability plans, operate with a focus on being eco-friendly, reduce waste, and implement strong stewardship practices.
Here are five strategies that tech companies around the globe are using to level up their green credentials while decreasing their negative impact.
Related: This Is Why Your Business Should Prioritize Environmental Efforts
1. Embrace the circular economy
The circular economy model is an economic framework that aims to minimize waste and maximize the efficient use of resources. In contrast to the conventional linear economy, circular economy promotes a closed-loop system where materials and products are continuously reused, repaired, remanufactured, or recycled to create new value.
According to McKinsey, the European circular economy market size for electronics is expected to grow from €60 to €95 billion by 2030. Additionally, resource productivity is estimated to grow by 3 percent, which will generate cost savings of around €600 billion as well as €1.8 trillion in other economic benefits annually.
For businesses, one of the most important resources they have at their hands is technology, be it software or hardware. Often, the largest and most impactful investments an organization makes are technology-related.
With computer hardware accounting for around 30% of overall IT budgets, hardware spending is the largest portion of overall tech spending. Consequently, hardware products, such as laptops, tablets, and smartphones, are often at the top of the list in both cost and volume.
The circular economy is based on the principles of designing for longevity and efficiency while minimizing waste and pollution. This is achieved by keeping assets and materials, such as smartphones or laptops, in use for as long as possible. Additionally, efforts are made to regenerate natural systems. In 2021, ATRenew reduced emissions by a total of 464,000 metric tons through re-commercializing pre-owned phones. This is equivalent to the carbon sink of about 1,533 square kilometers of urban forests in one year.
2. Invest in eco-friendly products and manufacturing
One of the key benefits of the implementation of a circular economy model is the reduction in waste. By prioritizing the reusing, repairing, and recycling of resources, the circular economy model minimizes the amount of waste that ends up in landfills or incinerators.
According to the European Environment Agency, waste management, industrial processes, and product use account for over 12% of greenhouse gas emissions in the EU. Consequently, a circular economy model reduces the environmental impacts associated with waste disposal and mitigates pollution and greenhouse gas emissions during manufacturing.
Investing in eco-friendly manufacturing processes and products is crucial for minimizing environmental impact. According to the Ellen MacArthur Foundation, 80% of a product’s environmental impact is decided in the initial design stages. Companies can increase their green credentials by using sustainable materials, reducing energy consumption, and minimizing waste.
Further, sustainable practices attract environmentally conscious customers, positioning sustainable businesses as leaders in a competitive marketplace. In other words, embracing sustainability is both a moral and strategic imperative for the long-term success of any business.
Related: How to Overcome the Shortage of Tech Talent in the US
3. Encourage and facilitate recycling
Recycling plays a crucial role in reducing electronic waste (e-waste), so encouraging it is important in promoting and advancing a sustainable approach to technology. With technological advancements continuing to happen at an astonishing rate, it is becoming increasingly important for tech companies to take responsibility for the lifecycle of their products.
Companies can help reduce e-waste and minimize their environmental impact by implementing effective strategies, such as trade-in programs or recycling events that incentivize consumers to recycle their old devices. For example, tech companies can establish partnerships or in-house programs that allow consumers to trade in their used devices in exchange for credit toward a new purchase.
Not only does this encourage the recycling of devices, but it also promotes brand loyalty and customer satisfaction. Education and awareness campaigns can also be powerful tools, especially considering that many electronic devices contain valuable and limited resources. Materials like lead, silver, copper and gold are essential for manufacturing new technology, making recycling even more attractive.
Related: The U.S. Has a Huge E-Waste Problem. But There Is Money To Make in Its Disposal.
4. Extend the lifecycle of devices
Extending the lifespan of electronic devices offers both financial and environmental benefits. By offering repair services, manufacturers and third-party providers can help consumers prolong the lifespan of their electronic devices. Not only is this often cheaper than buying a new device, but it also reduces e-waste and minimizes the environmental impact of manufacturing a new device.
Another approach businesses can take to extend the lifecycle of electronic devices is to sell their used devices. By selling thoroughly tested and repaired used devices at a reduced price with a warranty, consumers bask in a vibrant array of choices, extending beyond the realm of brand-new products.
According to Counterpoint Research, the demand for refurbished smartphones continues to grow. In 2022, the global secondary smartphone market saw growth of 5% year-over-year, with refurbished iPhone sales growing by 16%. Additionally, the secondary market of refurbished devices also creates new opportunities for businesses and consumers to get some of their investments back, reducing the overall cost of ownership and making affordable technology more accessible.
Manufacturers can also support the environment by making affordable replacement parts available and providing repair guides or tutorials. Companies can extend the lifespan of their products and foster customer loyalty simultaneously by embracing repairability and sustainability.
5. Foster a culture of sustainability
Promoting sustainability within the company culture is essential for sustainable organizations aiming to make a positive environmental impact. Integrating sustainability into a company’s core values, practices, and decision-making processes becomes a shared responsibility and commitment among employees, consumers, and stakeholders. This commitment then leads to a range of benefits for all involved parties, as well as the environment.
Weaving a strong sustainability policy into a company’s foundation as well as educating and engaging employees, sets a whole new standard that also comes with numerous benefits. Not only do sustainable organizations attract quality employees and sustainability-focused customers, but they also benefit financially.
For example, after successfully defining and implementing a stewardship plan focusing on sustainability, REI now has one of the most successful circular commerce programs of any outdoor retail brand, taking in around 100,000 outdoor-related items to be traded or resold in their store locations in 2022. By integrating sustainability into all operations, tech companies can drive change and contribute to a more sustainable future.
Related: 3 Ways You Can Bring Sustainability to Your Workplace
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