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E-waste: A blight on the environment and a company's good name

Linda Tucci, Executive Editor
Cloud computing might someday cut down on electronic waste. Heck, the day may come when computers are implanted in our brains and electronic waste, or e-waste, follows us to a human grave. But for now, electronic

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junk -- old computers, monitors, cell phones and so on -- keeps piling up, most of it stashed in warehouses and basements.

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Some 235 million electronic units have accumulated in storage since 1980, according to the latest figures from the U.S. Environmental Protection Agency (EPA). The stockpile includes 66 million desktop computers, 42 million computer monitors, 2.1 million laptops. And it will only get bigger -- exponentially so. The EPA estimates that 40 million computers became obsolete in 2007, more than double the number a decade ago. (Think the Disney/Pixar movie Wall-E).

Of the 18% of e-garbage that is not stored but recycled, 82% ends up in landfills, again according to the EPA. Indeed, electronic waste is fast becoming the largest source of lead in landfills, spurring states like California, Massachusetts, Minnesota, Maine and others to pass legislation on toxic e-waste.

Here's the dirtier secret:

"Better than 80% of electronic waste that is nominally called recycled is exported," said Robert Houghton, president of Redemtech Inc., a Columbus, Ohio-based company that helps mostly large enterprises reassign, retire, dispose of and, yes, redeem IT hardware.

"If you go to your community e-waste collection and drop off a PC, there is a great chance that it will end up in Pakistan or China and disassembled by a child," he said. (Watch "EWaste: Dumping on the Poor" for a compelling look at the impact of exported e-waste on poor Chinese towns.)

Sustainability moving up the corporate agenda

Large companies are becoming sensitive to the damage done by dispatching toxic waste to countries with no health or environmental protections, if only to protect corporate image, Houghton said. The Pepsi Bottling Group Inc., a recent customer win, is an example.

Keep IT assets longer
and save money
Redemtech's Bob Houghton says enterprise CIOs have a lot to learn about managing the end stages of IT assets.

"On the financial side, in my experience these very large IT organizations are terrible at measuring and managing the ROI of their IT portfolio," he said.

An increasing segment of Redemtech's business is just that -- redeploying IT assets to other parts of the company, reselling them or banking goodwill by donating the stuff to charities. An 18-month IT asset redeployment strategy Redemtech engineered for a very large bank customer for its desktops, servers, telecom and networking platforms saved the bank $9. 2 million, he said, about half of that in the desktop category.

"For every dollar they spent redeploying an asset, they saved $14.50 in procurement expenses," Houghton tallied.  

Fifteen years ago the desktop lifecycle was rarely more than three years. The increase in processing power relative to the software requirements means the use expectancy for PCs is now closer to five years, offering companies "a dramatic improvement in the total cost of ownership."

Redemtech estimates that by going from just a three- to five-year lifecycle, a company can "pick up about $600 savings per $1,000 in original procurement costs.

"And that is net of resale value and depreciation," Houghton said, putting in one more plug: "Our data destruction process allows us to knock down a lot of barriers to achieving longer lifecycles."

-- Linda Tucci
CIO Neal Bronzo found his way to Redemtech when Somers, N.Y.-based PBG decided to replace the 20,000 handheld mobile devices used by its delivery people. The IT strategy in recent years called for limiting PBG's vendor footprint, so his first concern was finding an IT asset disposer with a national footprint and a standardized process for getting rid of the handhelds.

"I wanted to make sure we had a process in place so the people in the field could focus on their customers," Bronzo said, rather than the logistics of swapping out their devices.

But what actually happened to the stuff also mattered -- a lot, Bronzo said. With annual sales of nearly $14 billion, PBG is the world's No. 1 manufacturer and distributor of Pepsi-Cola beverages. Spun off from PepsiCo Inc. in the 1990s, the bottler has two reputations to protect -- its own and that of the patron brand.

"The whole sustainability thing has become a large corporate issue. We wanted to make sure there was no offshore dumping, no landfills, and make sure everything was going to be recycled and there was a process in place to handle that waste," Bronzo said.

Redemtech, which does business with 100 of the Global 500 companies, has facilities across North America and in Europe and could handle the PBG territory. The vendor also had a data security process that ensures verified destruction and auditable proof of results. This was important to PBG, Bronzo said, because the handheld devices carried memory cards with sensitive pricing and invoice data. Plus, the devices were plastered with the company name. And the name could not be removed without breaking the handhelds.

"We chose to forego reselling these things with the understanding that they would not end up in the waste stream with our brand on it," said Mark Kniseley, PBG senior IT manager of IT asset management.

Redemtech has developed a software system that tracks component parts by serial number down to the hard drive. Visibility into what is happening with the handhelds has not been an issue, Kniseley said, chuckling. "I must get 15 to 20 emails a day telling me the status of all the pickups and where they are in the exit stream."

And none of the stuff should turn up to bite the Pepsi brand. Baked into the Redemtech mission is the promise that electronic waste that has toxic materials will not end up in a landfill, be exported to countries with no environmental or worker safety laws, or be incinerated or managed by prison labor.

E-waste laundering trade

There are no federal laws banning export of toxic e-trash. Last month, U.S. Representative Gene Green, D-Texas, chairman of the House Subcommittee on Environment and Hazardous Materials, introduced a congressional resolution (H.Res. 1395) that calls for the U.S. to join other nations that have banned the export of toxic e-waste to developing countries. This resolution could be the precursor for future legislation. In the meantime, tracking electronic waste is not an easy task, Houghton said.

"This a massive laundering trade where I may have a vendor process my electronic scrap and that vendor might be able to document the resale of some domestic components but pass others downstream -- and almost everybody is exporting down the line," he said. "Redemtech put a stake in the ground."

If a vendor can show Redemtech it is getting 34 cents a pound in Indianapolis, Houghton said he can be pretty confident the stuff is not being exported for dumping. But that scenario is the exception, he added.

We wanted to make sure there was no offshore dumping, no landfills, and make sure everything was going to be recycled and there was a process in place to handle that waste.
Neal Bronzo
CIOThe Pepsi Bottling Group Inc.
"We've developed auditing practices which allow us to open the hood and see what is happening to the final disposition of the product," Houghton said.

Houghton, an outdoor-enthusiast who worked in the sports adventure business, said 10-year-old Redemtech wasn't always so scrupulous. "We were educated by one of our clients, a very large health care organization," he said.

The company brags that it was one of the first recipients, along with Dell Inc., Hewlett-Packard Co., IBM and Intechra LLC, of IDC's Green Recycling and Asset Disposal for the Enterprise certification. The certification focuses on U.S. companies and is based on 34 IT asset-disposal functions and tasks, according to IDC. Redemtech is also working with the Basel Action Network to rewrite environmental audit standards. The aim is that these will be the basis of auditable certification for recyclers.

"At the end of the day, we want to raise the bar so we're competing on a level playing field," Houghton said.

Meantime, PBG can't risk waiting for a law to tell it what to do with e-trash. "The bar in the industry might not be formal yet, but we're going to make this a formal policy before we're forced to," Bronzo said.

And that policy could have legs. Bronzo said he intends to make the case for the responsible disposition of electronic equipment when PepsiCo and its various divisions and partners next meet to share best practices.

Let us know what you think about the story; email: Linda Tucci, Senior News Writer


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