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E-Waste – an electrically charged issue

E-Waste – an electrically charged issue
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ARTICLE TYPE
Sustainability Soapbox
TOPIC
Responsible Investing
PUBLISHED
December 10,2021
READ TIME
2 mins
AUTHOR
Jamie McAloon
SHARE
Back
ARTICLE TYPE Sustainability Soapbox
TOPIC Responsible Investing
PUBLISHED December 10,2021
READ TIME 2 mins read
AUTHOR Jamie McAloon
SHARE

What is EEE and E-Waste? Electrical and Electronic Equipment (EEE) are products with circuitry or electrical components with power or battery supply. E-Waste is the discard of these products, whether through wear and tear or, most likely, due to technological advancements and upgrades. The growth of EEE over the past century has been closely associated with rapid global economic development. With the continuous increase in disposable income levels, mass urbanisation and industrialisation in developing economies, E-Waste is on an exponential track. Globally, it is the fastest-growing waste stream.

 

According to the UN Global E-Waste Monitor 2020, global E-Waste reached a record 53.6 million tonnes (Mt) in 2019, of which only 17.4% was recycled. This is not sustainable as E-waste continues to outpace global recycling efforts. Currently, the Global E-Waste market is worth $57 billion. Only $10 billion worth is recycled in an environmentally sound way.

 

Poor recycling and collection management of E-Waste contributes to global warming. Unsurprisingly, Greenhouse gas emissions are released in the extraction and refinement of primary raw materials for EEE products. If we could recycle materials, it would alleviate the need to mine for new raw materials. Another complicating factor is the type of materials in the waste and the dangerous properties they have. E-Waste includes not only plastic, but also some extreme additives and hazardous substances such as mercury, brominated flame retardants (BFR), chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs). Unsurprisingly, this poses significant risks to the environment and human health.

 

How can companies tackle this problem? Firstly, they can look at product design. Companies need to manufacture products, components and materials that can be kept at their maximum functionality for as long as possible. This can be achieved by repairing and refurbishing a product or certain parts of it. Investment in refurbishment technologies and methods will allow refurbished products to compete with new products in appearance and functionality. Refurbishment is predominantly a time-consuming and manual process. Further research and investment in this area are vital, therefore, to improving efficiencies.

 

Secondly, we need to address the stigma around using refurbished or used products. Other than the fact that people want to be fashionable and keep up-to-date with the latest trends, the main deterrents to using refurbished products are the assumption that the performance of the items will be inferior and that there could be a financial cost incurred due to a product malfunctioning. Customers need guarantees and transparency in the secondary market to ensure that the circular economy is utilised.

 

Lastly, cloud technology can play a crucial role in reducing the pace of hardware obsolescence. Harnessing such technology allows for optimised storage and improved data management and processing capabilities through a network of internet servers instead of a local device.

 

A company we like is ASML, a Dutch-listed semiconductor equipment manufacturer. The company manufactures lithography (light) machines used by TSMC and Intel to 'print' silicon chips. ASML's products are vital in enabling the production of smaller, cheaper, more powerful, and energy-efficient chips. ASML boasts admirable circular initiatives; in 2020 alone, the company recycled 360kg of E-Waste, with an 85% total recycle rate and reusable parts equating to over €1,151m. One of its flagship products, PAS 5500 systems (launched in 1991, seven years after the company was founded), has a 90% usage rate. When newer systems replace older ones, ASML refurbishes the devices and provides them with a new purpose, producing less sophisticated chips. The company also runs its "As-New" program that remanufactures used system parts that requalify to the same standard as new parts.

 

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Source:UN E-waste Monitor 2020 report (GEM_2020_def.pdf (itu.int))

More about the authors

Jamie McAloon Responsible Investment Associate

Jamie McAloon is a responsible investment associate focusing on equities and multi-asset.

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