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IT Sustainability: Understanding the circular economy

In a recent study Dell Technologies commissioned with Forrester Consulting, 64% of decision makers surveyed believe sustainability is a priority for their firm’s IT procurement decisions. Understanding the environmental impact of the technology we buy and the method of disposal is critical.

Technology plays a crucial role in every organisation. You cannot run a future-proof business and remain competitive on legacy equipment. However, as organisations upgrade their technology to the latest and greatest, what happens to the outdated laptops and old equipment, also known as e-waste?

Waste from electronics, such as cell phones, computers, and other digital devices, represents the world’s fastest-growing waste stream, increasing at an alarming pace of 2Mt per year. In 2019, approximately 53Mt of e-waste was generated, with 2030 projections estimated to exceed 74Mt.

In addition, current technology cycles are increasing the demand for natural resources with limited recycling options, resulting in a “take-make-use-dispose” linear model. Implementing circular economy business models – “take-make-use-reuse” - can help companies lower their overall environmental impact.

As CIO and IT leaders, understanding the circular economy is crucial for driving sustainable and responsible practices within your organisation.

Here are some key points we need to know about the circular economy:

  • Definition of the Circular Economy: The circular economy is an economic system aimed at eliminating waste and promoting the continual use of resources. It emphasises keeping products, materials, and resources in circulation for as long as possible through strategies such as reuse, repair, remanufacturing, and recycling.

  • Extended Product Lifecycle: The circular economy challenges the traditional linear "take-make-dispose" model by promoting the extension of product lifecycles. Extending the lifespan of products is a major factor in reducing their environmental impact. To have a longer life, products must be durable, repairable, and upgradeable, making them more attractive for re-use.

  • Role of Technology: Technology plays a vital role in enabling and optimising circular economy practices. IT leaders should explore how digital solutions, such as the Internet of Things (IoT), artificial intelligence (AI), blockchain, and data analytics, can support the transition toward a circular model. These technologies can help track and trace products, enable resource optimisation, and facilitate efficient sharing and collaboration.

  • Resource Optimisation and Waste Reduction: IT departments can leverage technology to optimise resource consumption and reduce waste. By implementing smart energy management systems, organisations can monitor and control energy usage, identifying opportunities for efficiency improvements. Additionally, advanced analytics can help identify waste generation points, enabling targeted interventions for waste reduction and recycling.

  • Reverse Logistics and Product Recovery: Reverse logistics is a key aspect of the circular economy. Organisations should explore solutions and service providers that enable the efficient collection, sorting, and processing of returned products. This may involve implementing asset management systems for product identification, reverse supply chain optimisation for end-of-life products, and coordination with recycling partners.

  • Business Model Innovation: The circular economy often requires rethinking traditional business models. CIOs and IT leaders should collaborate with other executives to identify opportunities for innovation. This might involve exploring consumption-based models, such as product-as-a-service or sharing platforms, where products are leased or shared and returned to the supplier. Done correctly, this closes the loop on material flows when products and materials are recovered, refurbished, and reintroduced into the economy for a second life.

  • Regulatory Compliance and Reporting: CIOs should stay informed about relevant regulations and reporting requirements related to the circular economy. Compliance with environmental standards and reporting on sustainability performance are becoming increasingly important. CIOs should ensure that their systems and processes can capture and report the necessary data accurately.

  • Stakeholder Engagement: Engaging with stakeholders, including customers, employees, investors, and communities, is essential for the success of circular economy initiatives. Businesses can support these efforts using technology to communicate sustainability initiatives, gather feedback, and provide transparency into the organisation's circular practices.

A circular economy is about more than just recycling equipment. It includes thinking of the second and third life of a product or components and using resources, by-products, and surplus materials efficiently.

By understanding and embracing the circular economy, CIOs and IT leaders can drive innovation, foster sustainability, and create long-term value for their organisations while minimising environmental impact.

Find out how we are extending the lifetime of IT equipment through our leasing model.


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