The environment is increasingly central to business thinking. Managing and predicting emerging environmental issues, marketing eco-credentials, demonstrating responsibility and adhering to regulations are just a few of the myriad ways in which businesses have gone green.
For producers and retailers, a good environmental reputation is becoming as important as product reliability and price. However, this is a fast shifting field. What was adequately green last week might be environmentally inadequate this week; and what was a regulatory rule last year might have been superseded since.
What can businesses do to help shape environmental issues? The emerging field of electronic waste might offer one pathway forward.
Old computers, mobile phones and domestic appliances are being discarded in ever greater amounts, at ever greater speed. The useful lifespan of a technology has shrunk from around eight years to two. Electronic waste is growing three times faster than any other waste stream. It is also among the most toxic waste streams in the world. In the next few years, it is likely to be subject to new regulatory regimes and new challenges arising from the increasing scale of waste.
The UK has recently doubled its annual disposal of electronic waste to 2 million tonnes, and a conservative estimate suggests that by 2010, there will be a further 716 million computers in use globally. One hundred and seventy-eight million new computer users will appear in China, with 80 million new users in India.
Illustration by Malay Karmakar / Mint)
With consumers and government regulatory bodies increasingly focusing on environmental issues, the spotlight of responsibility is now falling on electronic producers and retailers. But how should producers and retailers manage this environmental concern?
Traditional approaches to waste management include landfill and incineration for energy production. However, an average PC (personal computer) contains more than 1,000 components, generating a potential array of environmental problems. Landfilling or incinerating components— ranging from flame retardant plastics used in monitors to metals used on circuit boards—could produce toxic hazards for generations to come, not to mention wasting the resources used in the production of these goods.
Three alternatives to these traditional forms of waste management have evolved over the last few years, particularly in the European Union (EU). One option would be to expand waste management to incorporate electronic goods. However, this is not a straightforward option.
Recycling the components of an old PC in an environmentally responsible manner requires infrastructure and equipment to recapture useful resources and a market willing to pay for (and thus cover the costs of recovering) recycled material.
The EU has attempted to regulate this infrastructure into being through the Waste Electrical and Electronic Equipment directive. This binds the member states of the EU into a waste management system which connects producers, retailers, consumers, waste management facilities, government regulators and electronic goods.
Every part of the system is overseen. Waste handling facilities are audited, retailers inspected, producers checked, the movement of products closely monitored, and consumers are strongly encouraged to handle their old electronic goods in responsible ways.
Has this expanded system of waste management successfully resolved the problems of electronic waste? Setting out to manage waste does little to reduce the production and consumption of resources. Managing every aspect of waste also requires a weighty, bureaucratic endeavour. Experiences across EU member states also suggest that implementing a uniform waste management system between nations is difficult.
A second option for dealing with electronic waste would be to regulate the materials used in the production of electronic goods to reduce their toxicity. In place of waste management comes a system to enforce the production of goods.
In the EU, this has involved the development of the Restriction on Hazardous Substances directive. This approach appears to introduce less of a bureaucratic burden. By focusing on a single list of restricted substances, implementation also appears more uniform.
Has this list of restricted substances successfully resolved the problems of electronic waste? Although new electronic goods may incorporate resources with lower levels of toxicity, once again, there seems little prospect of this approach reducing the overall amount of resources produced and consumed.
Also, experience across the EU suggests that compliance with this form of waste management might be as low as 10% in some market sectors, suggesting the list of restricted substances is not having the desired effect.
A third option for reducing electronic waste would involve shifting disposal to a design issue. This approach offers opportunities to focus more broadly on energy consumption, how components might be reused, how product lifespan might be augmented through upgrades and how technology might be designed for environmentally responsible disposal.
In this area, the EU has recently developed the Energy Using Products directive. Although currently it focuses mostly on energy consumption, the directive’s focus on product lifecycle might offer an opportunity for broadening the scope of managing electronic waste. An important feature of the directive is the labelling of products, certifying compliance with environmental concerns.
This certification may enable a shift from producers complying with regulation due to the threat of enforcement, to producers attempting to produce goods which can stimulate and respond to consumer demand.
The area of electronic waste demonstrates that environmental responsibility can shift rapidly in nature and scale. Although there are a variety of methods available for managing this waste, treating disposal as a design issue may enable producers to set the agenda, rather than just respond to regulation, and stimulate and shape demand for eco-certified products rather than just respond to perceptions of what consumers might want.
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Daniel Neyland is a senior research fellow at Saïd Business School, University of Oxford.