Circular Economy

The Circular Economy and IT Assets: How to Manage Your IT Assets in a Circular Way

What is a Circular Economy?

What goes around comes around. In a circular economy, that is the desired outcome. A circular approach to economic development is restorative by nature. A circular economy aims to rely on renewable energy while minimizing, tracking, and eliminating the use of toxic chemicals and waste. This model is especially conducive to eliminating electronic waste, which is currently growing at an unsustainable pace.

A circular economy is designed to benefit businesses, society, and the environment, and build capital instead of reducing it. There are significant benefits for organizations that choose to move toward a circular economy, as further discussed below.

There are three pillars of a circular economy:

  1. Designing out waste and pollution
  2. Keeping products and materials in use
  3. Regenerating natural systems

A circular economy begins with a product’s inception and careful design, including the materials used, packaging, and business models of the manufacturer. Instead of being designed for one-time consumption, products are made to be more durable so that they will last longer and can be later disassembled or refurbished for further use. Products are made without toxic chemicals so that they can be reused or returned to the biosphere.

A circular economy advocates for a “functional service” model in which manufacturers and retailers retain ownership of their electronic products and sell the use of their products, not the products themselves. When the customer is done using the product, it is returned to the manufacturer or retailer who will transform the product for further use beyond its shelf life. In this scenario, manufacturers and retailers are essentially acting as service providers.

By avoiding the use of non-renewable resources and advocating for a product cycle that optimizes for disassembly and reuse, a circular economy decreases resource dependence and feeds materials back into the system through processes like reusing, recycling, or composting. A circular economy optimizes resources by circulating products, components, and materials so that they can be used to their maximum extent, technologically and biologically, at all times.

Circular Economy vs. Linear Economy

The circular economy model contrasts sharply with the linear economy model, which is the norm today. A linear economy operates on a “take, make, dispose” model. It relies on a constant supply of easily accessible resources and energy to create a product that is disposed of after use.

A linear economy is not sustainable in the long term due to a finite supply of resources and the toll production takes on our ecosystems. The production process, which requires a constant use of large quantities of raw materials, contributes to high energy and water consumption, emits toxic substances, and disrupts natural capital such as forests and water supplies. For example, manufacturing a laptop uses 62-70 percent of the total energy required over its lifecycle, and requires 50 of the world’s 90 natural elements, some of which occur in limited amounts. Yet manufacturers are not focusing on the repairability or upgradeability of laptops. This means that they have short lifespans, and new ones are constantly being manufactured.

Further, many manufacturers are not making their products easy to disassemble. For example, many electronics are assembled with glue instead of screws. This makes it harder to take them apart so they can be recycled and their materials can be reused.

Consequently, when these laptops or other products are eventually discarded, they end up taking space in landfills or oceans, where they may emit toxic substances or cause other harmful effects to humans or animals living in close proximity.

Due to expected population growth, future demand for consumption of products, especially IT equipment, is guaranteed to increase significantly. As a result, a transition away from a linear economy is inevitable.

Economic Benefits of a Circular Economy

The circular economy changes how we should view the end of life of products. A transition to a circular economy will require innovative new business models and technologies, and presents a market opportunity of over $4.5 trillion by 2030.

In a circular economy, products should be reused as much as possible, instead of being discarded. For example, IT equipment can be dismantled and their materials, components, and parts can be fed back into the circular economy. As a result, the original equipment manufacturers can reuse those materials to produce new products with a decreased toll on the environment. New work is created for the people performing the dismantling, inspecting, testing, and recycling work. By eliminating waste, a circular economy builds capital instead of reducing it.

Transition to a Circular Economy

A full transition to a circular economy requires a complete systemic shift. This will take some time. However, there are many steps that your organization can take today toward a circular economy, especially when it comes to managing your IT equipment.

  1. Take stock of your IT assets across all of your locations to determine the exact number of assets and their condition, preferably through a physical inspection. Create an asset register with this information and note when assets will be reaching their end of life.
  2. IT equipment should be repaired and reused, if possible, when it reaches the end of its lifecycle. Through your asset register, you should be able to ascertain which spare parts you have readily available to facilitate repairs.
  3. If you can’t repair or reuse your IT equipment, sell it or recycle it. Your asset register will allow you to assess whether the IT equipment has any inherent value and can be resold, thus extending its lifecycle. A reputable IT asset disposition partner like Dispoteca can help you maximize value recovery for your IT equipment by finding the right secondary markets for your specific equipment. If the equipment does not have resale value, it should be recycled so that any precious metals or parts within it can be recovered and reused. Dispoteca also handles recycling of equipment and ensures that it is done in an environmentally responsible manner.
  4. Don’t keep your IT equipment in storage too long. When it comes to recovering the value of IT assets through resale, time is money. These assets depreciate very quickly. They also break down over time, especially when not stored properly. Keeping your assets in storage for a prolonged period greatly inhibits your ability to recover value for them and can impact their future usability by others.

A circular economy can bring many benefits not only to the environment and society in general, but also to an organization’s bottom line. A reputable IT asset disposition partner like Dispoteca can help you maximize value recovery for your IT equipment and feed it all back into the circular economy through resale or recycling. Dispoteca helps you become a part of the solution instead of the problem.

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