Expert Hubs 2021: the circular economy

Canalys ran a series of “Expert Hubs” at its latest forum events. The idea was to gather experts within the channel partner community to discuss a variety of subjects pertaining to one of the key event themes: ESG, strategy, cybersecurity, managed services and digital workplace. The sessions featured a mix of partners, vendors and, in some cases, third-party experts. Event participants were invited to watch the live discussions online. In this series of reports, we summarize some of the key points that came from these sessions. 

Topic: The circular economy

Partner participants: Also, Atea, Dustin, N2S, Softcat

Vendor participants: Dell Technologies, HP Inc, Hewlett Packard Enterprise, Lenovo

Key points

The circular economy is still inaccessible

As the UN’s 2030 Sustainable Development Goals (SDGs) deadline nears, the shift from a “make-use-dispose” model to a “produce-use-reuse” economic system is gaining traction. With 80% of electronic waste ending up in unknown locations every year and resource scarcity becoming more of an issue, sustainability has become the major driver to review the current economic model and shift toward circular practices.

The Expert Hub participants noted how the lack of knowledge and understanding around circularity has slowed this shift. For example, a 3StepIT survey from last year found that 25% of IT managers don’t know how to dispose of end-of-use equipment. Panelists on the hub all agreed that collaboration is needed to swiftly go from the traditional linear framework to a circular one.

The level of uptake varies in different geographies, with the Nordics leading the way. These are the early stages though. For example, only 10% of smartphones were recycled in Sweden in 2020. Canalys research found that only 16% of partners regularly sell refurbished products and 39% of partners don’t see an opportunity in this area yet.

Panelists on the hub agreed that legislation is vital if the 2030 SDGs are to be met. The Nordics and France have taken the lead in implementing actual laws around the production, use and disposal of equipment. Countries are at different stages of implementing sustainability policies, but governments need to accelerate this process as organizations seek more clarity in terms of the timeline and targets.

Collaboration and education are the stepping stones 

Prior to the rapidly deteriorating condition of the planet, sustainability was a “nice to have” rather than a “must”. With customers now required to meet tangible goals with respect to sustainability, partners and vendors are increasingly reviewing their internal and external operations to meet new customer requirements.

The lack of knowledge around circularity is clear, and both vendors and partners must therefore focus on educating the market around the circular framework to identify new opportunities while staying in line with the UN’s net zero strategy.

From a vendor perspective, an as-a-service model can facilitate the shift to a circular framework. Recycling programs and take-back initiatives can be easily put into practice. Vendors are increasingly setting a one-to-one ratio target with regards to the devices that go into and out of their organizations.

Panelists concurred that there needs to be further investment to improve current recycling practices as the quantity of electronic equipment will continue to grow. The end of life of devices is an area that is still unclear for many, but all agreed that this is the next opportunity to focus on.

Sustainability has highlighted the flaws in today’s current processes. This has driven vendors to review their business practices as well as their relationships with their business partners. The development of equipment is based on two indicators: price and product specifications. Procurement organizations are still leaning toward the traditional cost-based model, which is delaying the adoption of a circular economic system. Vendors and partners are therefore looking to encourage a more environmental approach (adding sustainability as the third indicator), which will ultimately lead to improvements in efficiencies in the industry.