Will Social Distancing Increase E-Waste? Here’s How This IT CEO Is Preparing For The Possibility
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Will Social Distancing Increase E-Waste? Here’s How This IT CEO Is Preparing For The Possibility

Will Social Distancing Increase E-Waste? Here’s How This IT CEO Is Preparing For The Possibility

  • In this exclusive story, we sit down with Gordon Smith, IT giant Sagent's President and CEO.
  • Gordon shares why he thinks there's going to be a spike in e-waste and how his company is preparing for it.
  • This story is available exclusively to our paid subscribers. Subscribe for less than two cups of coffee a month to start reading now.

With stay-at-home laws requiring an unprecedented percentage of the workforce to work remotely, we may witness a stark rise in the demand for and disposal of electronics. Sagent, an IT and network analytics company, has seen this increase in demand play out first-hand.

But for them, the situation isn’t all positive; the company believes COVID-19 could result in a “wave of e-waste.”

To get a better understanding of what evidence drives that hypothesis, how we can plan ahead, and how the company is reacting to this anticipating, I sat down with Sagent CEO Gordon Smith and he walked me through it.

Our conversation has been edited for length and clarity.

***

ARI KELO: Intuitively, why would the COVID-19 pandemic cause a new wave of e-waste?

GORDON SMITH: In the short and mid-term, there will not be a new wave of e-waste.  Inventories of current and legacy technology are being deployed to support the growth in network traffic experienced since the issuance of stay at home orders. In fact, some inventories of legacy technology are finding a useful purpose in the circular economy instead of moving to e-waste streams sooner. This is happening at the consumer, business and network provider levels. The amount of technology deployed per capita will reach a new normal over the coming months. It’s unlikely that this will be reversed as consumers and companies alike will want to be prepared for future disruptions. 

However, as technology turnover rates resume to previous durations, e-waste will accelerate beyond pre-pandemic levels as turnover will be happening across a larger deployed base of technology. For example, if the average personal computer is used for three years and that turnover rate holds, it will be applied to a larger deployed base of technology, thus creating higher levels of e-waste in the long term.  

Although it seems like technological consumption is on the rise during quarantine, that’s only one factor that could cause e-waste numbers to spike. In your experience, what are some other drivers of increased e-waste?

The largest driver of e-waste is the inefficiency in the redeployment process and lack of investment in the circular economy. An electronic asset that is removed from the original user’s environment most often has an economic benefit to another user in another market. Product lifecycle can be extended by efficiently finding users in the markets, and thus reducing contributions to e-waste streams.  

What are some of the e-waste numbers associated with networking equipment and other areas of the industry you operate in?

Unfortunately, e-waste tracking is limited. Only 41 nations publish statistics, and they are broken down by type, such as small IT equipment, large IT equipment, screens, refrigeration, and so on. Specific figures related to networking equipment, as compared with other enterprise hardware, are not compiled.

We do know that the world was expected to generate more than 50 million tons of e-waste this year, a number that’s been growing around 5% per annum. It is possible that the economic slowdown will reduce e-waste production slightly, as telecoms and enterprises delay upgrades for financial reasons and/or to limit field technician activity to mission critical equipment and actual outages. A temporary, economic-driven decline, however, would not fundamentally alter the global e-waste situation.

How do those numbers motivate Sagent’s work today in how you mitigate the e-waste challenge?

Real change can be achieved by helping telecoms and other enterprises realize the value in their IT hardware assets. To the extent that Sagent can make repair and refurbishment, reuse and redeployment, and resale attractive and easy, we can extend the lifespan of existing IT hardware and reduce both manufacturing inputs and downstream e-waste. 

The next step is recycling. Worldwide, only about 20% of e-waste is documented to have been collected and recycled. This number is highly motivational—the U.S. needs to aggressively increase recycling. We find that integrating e-waste recycling and disposal with our other services encourages more organizations to “close the circle” on all equipment. 

From a company’s perspective, recycling is a cost center; the enterprise pays for the service. Sagent’s customers, however, know they can direct a full array of older and non-functional hardware to us. We assess the equipment, repair and refurbish as necessary, and capture any remaining value for them. The revenues generated from resale offset—and often outpace—reclamation costs for the smaller fraction of equipment that is truly unusable or obsolete and cannot be resold.

During the pandemic, which products are being ordered most frequently these days and what are the implications of these products being ordered more often?

Anything that provides connectivity to users and capacity to network operators is being ordered. This includes data and optical networking, memory, laptops and tablets, modems, wireless infrastructure, and power equipment. 

From an e-waste perspective, everything that is placed into use is diverted from a waste stream. The follow-on effects of this are a reduction in the use of raw materials and natural resources, fewer emissions, less water and solid pollution, and a reduction in greenhouse gases.  

Provided those implications, what are Sagent’s current strategies to minimize e-waste?

To minimize e-waste, Sagent must continue to educate our customers and maximize the supply of electronics infrastructure and consumer devices through our programs. Sagent is partnering with some of the largest companies in the world to ensure their reverse supply chains are running as efficiently as possible.

A large part of the efficiency comes from the data that Sagent provides. Providing our customers with current and future estimated market values allows for our customers to time their upgrade cycles so that they can minimize the environmental and monetary impacts.

What’s Sagent’s process for measuring how successful it is as a company at mitigating the e-waste problem?

The key metric we look to is the total pounds of electronics diverted from the waste stream. In 2019, Sagent diverted 8.5M lbs. of electronics from e-waste through our refurbishing, repairing and reselling efforts. We view this as the biggest win for our customers, suppliers and the environment.

How do scalability challenges impact a company’s ability to adapt to and offset e-waste?

For Sagent, the key to managing scalability has always been about maximizing product outlets in diverse geographies and industries. We continually work to understand the entire market to minimize waste streams and maximize our contributions to the circular economy. If we know who wants to reuse, we can make this happen.

How has COVID-19 impacted the way Sagent runs its e-waste mitigation strategies?

Our execution has been modified, but Sagent’s mitigation strategies and goals have not.  Advised and mandated safety precautions have been implemented including the use of PPE, expanded sanitization of facilities, and social distancing. Ultimately, we are here to maximize the utility of electronic assets and minimize our customers’ environmental footprint—these are constants.

So in what ways does Sagent’s hierarchy of asset disposition maximize sustainability?

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Sagent maximizes sustainability by capturing a customer’s potential e-waste stream and evaluating each piece of equipment. When possible, we repair and refurbish hardware, either for redeployment by our customer or resale on the “green market.” Only equipment that cannot be repaired or holds no further market value is recycled. 

This approach is more sustainable than a “recycling first” mindset. We are always striving to extend hardware lifespan, so it can fill a need somewhere. On a systemic level, this means organizations buy fewer pieces of new hardware, so reduced manufacturing inputs, including materials, water, and energy, are required to feed global IT requirements. It also means we squeeze as much value from every component before recycling. 

Thus recycling, as important as it is, serves as the final option. As the familiar environmental triangle portrays, we have to reduce and reuse as much as possible —and only then recycle the rest.

How can Sagent apply this strategy to offset e-waste accumulation during social distancing?

Social distancing itself will not affect this model or radically shift our implementation. Some challenges we’ve already addressed, such as maintaining safety and social distance within our facility to protect employees. We may see discrete logistics-related complications at times, and reclamation may slow down to accommodate social distancing in these facilities, creating a backlog. But we expect such issues to be temporary.

Processing used equipment, however, presents no specific risk. The coronavirus has been documented to survive on some surfaces, including plastics, for about one week in ideal circumstances. Disinfection of those surfaces is sufficient to protect health and safety. Internal components, spares taken from storage or shipped from a manufacturer, etc., are safe. 

What are some success stories associated with how Sagent has combated e-waste?

Network operators have historically spent most of their supply chain focus on procuring new products and services with little focus on reverse logistics. Sagent’s value is that it provides a data-driven, orderly, predictable and reliable approach and process to the reverse supply chain. 

With Sagent’s help, our customers are able to make decisions quickly and decisively about their network assets which in turn leads to lower inventory levels, higher return on assets and lower logistics costs. 

Network operators can no longer leave central offices full of decommissioned equipment or let their warehouses fill up with equipment that they know they will no longer need but are driven to inaction because they don’t have the data or the partner to maximize the outflow of equipment from their network.

The cost of inaction to the environment and the network operator have become too high to continue down a path of inaction. 

What are Sagent’s key logistical challenges associated with tackling e-waste during the COVID-19 pandemic?

There have been delays in acquiring and delivering refurbished assets to users due to transportation scheduling, human resource availability, and access to advisable PPE.  None of these challenges have resulted in more than minor delivery delays and no loss of product being moved to its highest and best use away from e-waste streams.

***

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