5 Ways Tech Companies Can Improve Their Sustainability | Entrepreneur

At a time when environmental concerns have reached unprecedented levels, businesses across all sectors are faced with the imperative to adopt sustainable practices. Among various industries across the globe, the technology sector has emerged as a prominent player, recognizing the pressing need to prioritize green initiatives.

With growing consumer awareness and growing demand for eco-friendly solutions, technology companies have realized that sustainability is no longer just a trend, but a critical success factor that has a significant impact on their bottom line. According to a study conducted by Deutsche Bank, companies with high environmental, social and governance (ESG) ratings have a lower cost of debt and equity. These results were corroborated by MSCI in 2020.

Moreover, the results show that companies with high ESG ratings outperform the market in the medium and long term. Additionally, by implementing stewardship-focused programs, companies have not only seen growth in their finances, but also in brand awareness.

By adopting circular business models, implementing waste reduction programs, and placing greater emphasis on the extended life cycles of their assets, companies are creating a transition to doing business from an eco-friendly perspective. environment. This shift has created the need for companies that specialize in helping large organizations develop sustainability plans, operate with an emphasis on environmental friendliness, reduce waste and implement strong stewardship practices.

Here are five strategies tech companies around the world are using to improve their green credentials while reducing 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. Unlike the conventional linear economy, the 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 size of the European circular economy market for electronics is expected to increase from €60 billion to €95 billion by 2030. In addition, resource productivity is expected to increase by 3%, which will also generate savings of around 600 billion euros. as 1.8 trillion euros of other economic benefits per year.

For businesses, one of the most important resources they have is technology, whether software or hardware. Often, an organization’s largest and most impactful investments are in technology.

With IT hardware accounting for approximately 30% of overall IT budgets, hardware spending accounts for the largest portion of overall technology spending. Therefore, hardware products, such as laptops, tablets, and smartphones, are often at the top of the list in terms of 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 service for as long as possible. In addition, efforts are made to regenerate natural systems. In 2021, ATRenew reduced emissions by a total of 464,000 metric tons through the remarketing of used phones. This is equivalent to the carbon sink of approximately 1,533 square kilometers of urban forests in one year.

2. Invest in environmentally friendly products and manufacturing

One of the main benefits of implementing a circular economy model is waste reduction. By prioritizing the reuse, repair 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 more than 12% of greenhouse gas emissions in the EU. Therefore, a circular economy model reduces the environmental impacts associated with waste disposal and mitigates pollution and greenhouse gas emissions during manufacturing.

Investing in environmentally friendly manufacturing processes and products is crucial to minimizing environmental impact. According to the Ellen MacArthur Foundation, 80% of a product’s environmental impact is decided during the early design stages. Businesses can increase their green credentials by using sustainable materials, reducing energy consumption and minimizing waste.

Additionally, 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 tech talent shortage in the United States

3. Encourage and facilitate recycling

Recycling plays a crucial role in reducing electronic waste (e-waste), so it is important to encourage it to promote and advance a sustainable approach to technology. As technological advancements continue at a staggering rate, it is becoming increasingly important for technology companies to take responsibility for the lifecycle of their products.

Businesses can help reduce e-waste and minimize its impact on the environment by implementing effective strategies, such as take-back programs or recycling events that encourage consumers to recycle their old devices. For example, technology companies can establish internal partnerships or programs that allow consumers to trade in their used devices in exchange for credit towards a new purchase.

Not only does this encourage device recycling, but it also promotes brand loyalty and customer satisfaction. Education and awareness campaigns can also be powerful tools, especially since many electronic devices contain valuable and limited resources. Materials like lead, silver, copper and gold are essential to the manufacture of new technologies, which makes recycling even more attractive.

Related: The United States has a huge e-waste problem. But there is money to be made in its elimination.

4. Extend device lifecycle

Extending the life of electronic devices offers both financial and environmental benefits. By offering repair services, manufacturers and third-party vendors can help consumers extend the life 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 making a new device.

Another approach that companies can take to extend the life cycle of electronic devices is to sell their used devices. By selling carefully tested and repaired used devices at a reduced price with a warranty, consumers benefit from a dynamic range of choice, extending beyond the realm of new products.

According to Counterpoint Research, the demand for refurbished smartphones continues to grow. In 2022, the global smartphone secondary market grew 5% year-over-year, with refurbished iPhone sales increasing 16%. Additionally, the aftermarket for refurbished devices is also creating new opportunities for businesses and consumers to recoup some of their investments, reducing the overall cost of ownership and making affordable technology more accessible.

Manufacturers can also support the environment by making affordable spare parts available and providing repair guides or tutorials. Companies can simultaneously extend the life of their products and build customer loyalty by embracing repairability and durability.

5. Foster a culture of sustainability

Promoting sustainability within the corporate culture is essential for sustainable organizations aiming to have 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 translates into a series of benefits for all parties involved, as well as for the environment.

Incorporating a strong sustainability policy into the foundations of a business, along with employee training and engagement, sets a whole new standard that also comes with many benefits. Not only do sustainable organizations attract quality employees and customers focused on sustainability, but they also benefit financially.

For example, after successfully defining and implementing a sustainability-focused management plan, REI now has one of the most successful circular commerce programs of any outdoor retail brand. , supporting approximately 100,000 outdoor-related items for trade or resale in their stores by 2022. By integrating sustainability into all of their operations, technology companies can drive change and contribute to a more sustainable future.

Related: 3 Ways to Bring Sustainability to Your Workplace