Edition 116, November 2021

Achieving Environmental, Social and Revenue Goals with Retired IT Assets

By Paul Baum, PlanITROI

There are numerous challenges companies face with retired IT assets, from data security to financial risks. Environmental sustainability and keeping these devices out of the waste stream and the world’s landfills are additional factors. Taking a fresh look at how companies are managing these devices transforms challenges into opportunities.

The triple bottom line supports that companies should prioritize social and environmental concerns, as much as profits. Instead of one bottom line, there should be three: planet, people and profit. The concept measures a company’s level of commitment to corporate social responsibility and its impact on the environment over time. As companies think long-term about their end-of-life electronic devices, they should consider this framework to determine if they can check off all three boxes. Repair and refurbishment are effective means to attain the triple bottom line.

There is a growing backlog of e-waste dumped in landfills. In 2019, approximately 53.6 million metric tons of e-waste were generated, which is detrimental to human health and the environment. E-waste commonly contains several toxic additives and hazardous substances. If improperly handled, e-waste can pose significant risks to the environment and human health.

By 2025, an estimated 65 million metric tons of e-waste will be generated. The higher consumption rate of electronic equipment and shorter device life cycles are contributing to that growth. However, only 17 percent of global e-waste today is appropriately documented, collected and recycled.

The remaining 83 percent is not documented or tracked through its final destination and is more than likely disposed of in the following ways:

  •    Discarded in waste bins and subsequently landfilled or incinerated.
  •    Exported to middle- and low-income countries.
  •    Mixed into other waste streams and recycled under inferior conditions.

Environmental, social and governance remains high on the list of priorities for companies. A recent PwC survey showed that 33 percent of CFOs plan to include environmental, social and governance disclosures in their upcoming annual report. Looking ahead, CFOs can use environmental, social and governance as a springboard for collaboration with leaders in operations, human resources, tax and risk. 

Companies can fulfill environmental, social and governance goals and reduce e-waste by leveraging the circular economy for their retired IT devices. This concept extends the lifecycle of a product and keeps waste to a minimum. Growing environmental concerns and increasing costs have shifted consumer behavior to the rising acceptance and use of refurbished electronics. There are many benefits to repairing and refurbishing retired IT devices. On top of reducing e-waste and contributing to the circular economy, there is social impact and resale recovery value.

There is an expanding trend of manufacturers making electronic devices that are more easily repaired, to extend their lifecycle. The Repair Association advocates nationally for a competitive repair market, as well as improvements to the quality and longevity of products. The mission is to drive repair-friendly legislation, regulations and standards for all products and all industries. According to that association, too often, usable products and device components are shredded or tossed away instead of being salvaged, fixed and reused. As such, we need to make our products last longer. That includes optimizing electronics not only for the first owner, but also for the third, fourth and fifth through formal and informal reuse and repair.

Unfortunately, 90 percent of traditional IT asset disposition providers recycle and ship assets overseas without visibility into the destination or recovery. As a result, many of these devices end up in landfills or are recycled in substandard conditions, causing hazardous impacts to the environment. Instead of shipping retired IT devices wholesale and recycling them overseas, leverage the circular economy by repairing and refurbishing them.  

When end-of-life IT devices are beyond the point of refurbishment, the focus is on responsible recycling. It is worth noting that an “EPA-Certified Electronics Processing Facility” does not exist. The EPA does not audit electronics recycling operations. Verify that an ITAD provider employs the highest level of environmental practices by ensuring it holds an accredited certification through the EPA.

The ITAD provider also should have a downstream process that is ISO 14001 certified, combined with an e-Stewards® or Responsible Recycling (R2) certification. These require third-party audits based on rigorous environmental standards. For example, with R2, any equipment that cannot be refurbished (less than 10 percent) is sent downstream to recycling partners, who separate materials for use in future manufacturing. The independent accredited certifying body requires continual oversight and holds the ITAD provider to particular standards even after the initial certification.

Transparency is essential. Therefore, an ITAD provider needs to deliver accurate reporting. Equipped with that information, a company can understand every part of the recycling process and its impact.

Companies also have a corporate social responsibility to create value for stakeholders and benefit the broader community. Through corporate social responsibility programs, companies can help humanity while boosting their brands and bottom line. An estimated 90 percent of companies on the S&P 500 index published a corporate social responsibility report in 2019, compared to just 20 percent in 2011.

Furthermore, customers, employees and executives have strong corporate social responsibility  beliefs:

  • Seventy-seven percent of consumers are motivated to purchase from companies committed to making the world a better place.
  • At the same time, 73 percent of investors state that efforts to improve the environment and society contribute to their investment decisions.
  • Ninety-three percent of employees believe companies must lead with purpose.
  • A further 88 percent believe it no longer is acceptable for companies to make money at the expense of society at large.
  • Nearly 90 percent of executives believe a strong sense of collective purpose within their organization drives employee satisfaction.
  • A further 84 percent believe collective purpose affects the organization’s ability to transform.
  • Eighty percent of executives believe collective purpose can increase customer loyalty.

These statistics illuminate the importance of corporate social responsibility initiatives. Companies can make a social impact and fulfill corporate social responsibility goals by turning retired, returned and idle IT devices into recertified, affordable technology solutions for low-income students and families. Just before 2021, up to 12 million K-12 students remained digitally underserved. Many students lacked connectivity, an e-learning device or both. Although progress to bridge the digital divide has been significant, this is not a short-term issue.

The digital divide extends beyond students. Findings from a Pew Research Center study found that roughly 41 percent of adults with household incomes below $30,000 a year do not have a desktop or laptop computer. By comparison, each of these technologies is nearly widespread among adults in households earning $100,000 or more a year.

PlanITROI started the Digital Dreams Project to support its mission to bridge the digital divide with affordable technology. Through its non-profit collaborations, including Take On Race, PlanITROI builds mission-driven partnerships. As a result, these organizations are creating a more digitally inclusive world by providing free and low-cost devices to communities of color.

Companies are uniquely positioned to help bridge the digital divide because of their backlog of retired and idle IT devices. There are millions of unused and retired IT devices “collecting dust” in U.S. businesses and homes. Directly trading in computers, making a financial contribution or initiating collections can make a difference. PlanITROI offers a turn-key program with several participation levels, including virtual or in-person drives. This process maximizes the value of underused or end-of-life IT equipment. Together with impacting students and families in need, participating in the Digital Dreams Project is an easy entry point into tackling digital inequity and satisfying corporate social responsibility goals.

Instead of an ITAD program being a cost center, look at it as an opportunity to be a profit center. Apart from the initial purchase, companies can recover the highest possible value of an IT asset during multiple phases of its lifecycle. For example, if a device is not in working condition, repair or refurbishment could increase the potential value by turning the expense of ITAD into a profit. The highest recovery comes from refurbishing and reselling these devices directly to the next user, through big box retailers.

Profit and data security go hand-in-hand. To get the best return on investment for end-of-life IT devices, companies must eliminate data security risks and costly penalties. Retired IT devices contain sensitive data. If data destruction is not flawlessly managed, a data breach will have extensive harmful effects, from damaging a company’s reputation to costing millions of dollars. Recent research revealed the average total cost of a data breach increased by nearly 10 percent to $4.24 million, the highest ever recorded.

Data breaches can happen at any time during the IT lifecycle. However, end-of-life devices are especially vulnerable to a data breach. This can occur when data is not adequately sanitized or done in compliance with The National Institute of Standards and Technology (NIST) and Department of Defense guidelines.
NIST-certified data deletion methods ensure that data is overwritten with numbers and characters, so it cannot be seen or retrieved. Private information is wholly deleted using a magnetic field. This scrambles information to the point where it cannot be recovered, no matter what methods are attempted. The hard drive also is destroyed. During physical destruction, hard disk drives get physically shredded, making data unrecoverable.

A Certificate of Data Destruction states that data was destroyed and hard drives cleaned with lawful, compliant methods. Specifically, the certificate includes the date and location of the data destruction and a certified signature. Most important is the statement confirming that the ITAD provider destroyed the data. This eliminates liability. The assets are given unique serial numbers, which companies can use as an audit to match what, where and when the secure data destruction occurred.

Data destruction is best handled by an expert ITAD provider with an unblemished history of destroying data without an incident of personal information exposure.

When assessing retired IT assets, please do not consider them worthless equipment. Instead, think about their potential and ability to impact the triple bottom line. It is possible to recover value and achieve environmental and social responsibility goals by partnering with an ITAD provider specializing in these areas.

Paul Baum
Paul Baum is the founder and CEO of PlanITROI. For more than 30 years, Paul has been leading IT Asset Value Recovery models to help clients make decisions on the best place for their retired or returned devices to go in its next life. He developed many of the first and largest OEM and retailer “cash-in and trade-up” programs. PlanITROI is the global leader in purpose-driven IT lifecycle management solutions, offering complete end-to-end ITAD services, data security, seamless integration, and real-time transparent reporting and analytics. A long-term, trusted partner to leading corporations, educational institutions, device OEMs and non-profit organizations, PlanITROI leverages the circular economy to prevent e-waste. Since its inception in 2001, PlanITROI has prevented 35 million pounds of e-waste and recovered $1.2 billion for its clients.