FT Rethink
Is a sustainable electronics industry possible?
Over the past decade, tech has become an indispensable companion in our lives. A growing number of devices answer our every daily need. But all of these – from smart watches, to wireless headphones, virtual assistants and tablets – have a shelf life. And, once discarded, they linger on in e-waste graveyards, leaching toxins into the soil, or gathering dust in drawers. All of the resources extracted, transported and transformed in their manufacture – the rare minerals, plastics, chemicals – are lost. And all of the energy used to create them is lost to the ever-warming atmosphere.
In 2020, a UN Global E-waste Monitor report found a whopping 53.6 million tonnes of e-waste had been dumped worldwide in 2019. That’s the same weight as 4,500 Eiffel towers. Or heavier than the combined weight of all commercial planes ever made. And that’s just one year of e-waste. Within that horde of washing machines and televisions and toasters was some USD 57 billion worth of raw materials – greater than the GDP of many nations. Only 17.4% of these materials were recycled. The majority were incinerated or jettisoned in landfill.
Demand has not peaked. Some 1.43 billion phones are sold annually. E-commerce sales continue to surge worldwide. As a result, e-waste is one of the fastest growing waste streams in the world. The UN forecasts that, on current trends, yearly e-waste generation will balloon to 74.7 million tonnes by 2030. The report called for a global reboot and a new vision for e-waste rooted in the ‘circular economy’ of reuse and recycling. But is a sustainable electronics industry possible?
Circular by design
Many companies, from fledgling start-ups to established tech giants, have been grappling with that question, and a number of organisations have sprung up to coordinate their efforts.
The Circular Electronics Partnership (CEP) was established in 2021 to unite experts, business leaders and global organisations in co-designing solutions for a ‘circular’ electronics industry. Alongside 40 companies, CEP produced a roadmap identifying the core barriers to sustainability faced by the industry, and the pathways towards circularity.
“These 40 barriers are something all companies run into and, because they are all so broad, they need collective action to be overcome,” says Carolien Van Brunschot, CEP’s manager. “You don’t build a circular economy yourself. It’s a larger system, so you need to collaborate with your industry peers.”
While recycling is often cited as the answer to e-waste, change must begin much earlier in the value chain. The starting point – and the first CEP pathway – is building circularity into product design, so that reuse and refurbishment become commonplace. “Essentially, you want to keep things in the loop and in use for as long as possible,” says Brunschot. “Recycling misses the part on reused and refurbished. Low recycling rates are not a recycling issue but a full value chain issue.”
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The right to repair
In recent years, a campaign has been mounted over consumers’ right to repair electronic devices – rather than being forced to throw them away. Governments are beginning to take notice. Last year, building on rules that require the repairability of devices such as fridges and televisions, the EU Commission proposed a smartphone repair law that would demand improved battery longevity, better energy efficiency, and the availability of at least 15 different component parts to enable repairs for a minimum of 5 years after devices hit the market. Repairability labelling will also be introduced from 2025, so that consumers can consider the ease of repair when choosing their next phone or tablet.
In the US, too, calls for repairability are growing, and some US states have followed the EU’s lead. In response, Apple, Samsung et al have started to offer guides and repair kits for some of their products.
This shift away from ‘built-in obsolescence’ will require a shift in consumer behaviour, too; so-called ‘upgrade culture’ is incompatible with a circular economy. “It’s something that consumers also need to go through,” argues Brunschot. “It’s really a global societal mindset of using things for as long as you can. And, if you can’t anymore, then take it apart and see what else you could use it for. It’s about putting value in what you have rather than what you can buy.”
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Making phones fair
The idea of repairability forms the backbone of Fairphone, a Dutch smartphone manufacturer and social enterprise focussed on fair and recycled materials. “If you want to tackle the environmental impact, longevity becomes the focus area because most of the impact of a smartphone lies in its production phase,” explains Thea Kleinmagd, a circular material chains innovator at Fairphone. By some estimates, 75% of a phone’s adverse environmental footprint lies in its production.
The company’s latest model, Fairphone 4, is modular: comprised of eight modules that can be easily repaired by customers, with guides and spare parts available on the website. “Repair has a very small carbon footprint,” says Kleinmagd. “If you design smart, in a way that [means] you can exchange modules that have a very low impact, and keep the big module, the core, then you’re gaining a lot of resources because you can use it for longer and it’s not ending up in recycling where you lose a lot of materials.”
For every device there will come a point, however, at which repairing is no longer an option – here, recycling innovations are improving what can be salvaged from expired tech. Apple’s Daisy robot can disassemble 200 phones an hour. Similarly, its Dave robot recovers rare earth magnets, tungsten and steel, while its Taz machine reclaims magnets from audio modules. In 2021, 20% of all materials in Apple products were recycled; the goal is 100%.
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Educate, educate, educate
The UN’S International Telecommunication Union (ITU) guides governments’ national policies on e-waste. These can include recycling benchmarks or current efforts to standardise global power adapters. “Compliance and enforcement are critical,” says Cosmas Zavszava, ITU’s director. “It’s a work in progress. We have to educate, educate, educate.”
Some early signs are promising. Since 2014, the number of countries that have adopted a national e-waste policy, legislation, or regulation has increased from 61 to 78, and that number is still growing, according to an ITU report. In 2021, the global e-waste recycling market was already worth USD 3.6 billion and it is now forecast to expand at a compound annual growth rate of 7.6% to reach USD 7.3 billion by 2030, based on data from Transparency Market Research.
“It’s not going to be an overnight shift,” Brunschot says. “We’re not going to wake up one day and say, oh, the circular economy is here. It’s a gradual shift. But it’s happening.”
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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