Analysis & Reviews

Electronic Brands Sustainable Or Not

Electronic Brands: Sustainable Or Not?

We recently guest authored a report for CLSA U® – “Toxic phones: China controls the core”, examining risks associated with highly polluting and toxic minerals which lie at the phone’s interactive core from touch, feel, sound to vision.

“Global technology and smartphone brands have taken neither smart nor consistent actions to minimise their exposure”

CLSA U® report – “Toxic phones: China controls the core”

The report warns that as China says no to pollution and yes to a high tech future, transitional risks are abound. We expand on this convergence of events – from China’s dominance of critical raw materials (CRMs) to a tightening supply – in our overview.

However, the report also finds that “global technology and smartphone brands have taken neither smart nor consistent actions to minimise their exposure.” Instead, brands’ no-sense strategies are geared towards short-term profit, including:

  1. New smartphones use more types of rare earths
  2. Recycling rates are ultra-low
  3. Smartphones are designed to go obsolete

Inconsistency is also pervasive. For one, Apple may excel in supply chain sustainability but their devices are designed against personal repair and there is no traceability for their rare earth consumption. For more on Apple’s current efforts on closing the loop see here.

These inconsistencies in design, manufacture and no-sense sustainable policies across various products exacerbate brands’ exposure to CRM risks. Plus with growing NGO pressure there is an increasing reputational risk and water risks in brands’ supply chains need tackling, as our new dashboard shows.

Brands need to re-think their supply chain, recycling and design strategies

To mitigate these risks, brands need a comprehensive re-think of their supply chain, recycling and design strategies. There are some excellent NGO reports looking at brand action and if you cannot access the full report, we cover them below. From built-in obsolescence to repairability, brands have taken steps forward but much more needs to be done.

CITI Index: China-led supply chain sustainability ranking

 
Between CITI 2016 (1)2010 and 2013, IPE along with other NGO’s ranked global IT brands based on parameters such as supply chain management and disclosure in their “IT Industry Reports Phases I-VII”. Since 2014 this ranking has been expanded, updated and incorporated into the Corporate Information Transparency Index (CITI).

How have brands ranked in the last three years? As shown in the table below right, laggards include globally renowned companies such as Blackberry and HTC. Asian brands such as Xiaomi, BYD and Haier are also falling behind. In contrast, as shown in the table below left, Apple has come top in the all three of the CITI index rankings. Apple’s supply chain management, however, has not always been so exemplary and IPE’s work has encouraged Apple to open up their then secretive supply chain and expand focus beyond Tier 1 suppliers. See the CLSA U® report for a fuller analysis.

 

CITI ranking

Still no traceability system & even Apple unclear on toxic waste

While the CITI index is a good indicator of brand supply chain sustainability, there is still much room for improvement even for those leading the pack. According to researcher Hongqiao Liu, Apple’s iPhones could contain at least 51 tonnes of rare earths. This could likely have resulted in 71 tonnes of radioactive waste in 2016, but with no responsible sourcing platform, Apple will neither be able to confirm nor deny this. As the CLSA U® report notes: “We are not saying that Apple has caused this, but without proper disclosure or traceability of rare earths, brands can neither confirm nor deny these numbers.

From Smart to Senseless: low recycling rates & non-transparent take-back programmes 

 
Beyond Smart to Senslessupstream supply chain management, electronics brands also need to consider the downstream impacts of their products, such as end-of-life recycling and reducing greenhouse gas emissions. In February 2017, Greenpeace released a report looking at the global impact of 10 years of smartphones – “From Smart to Senseless: The Global Impact of Ten Years of Smartphones”.

After reviewing 13 popular smartphone brands, the report found that no brand comprehensively re-uses recycled materials for their smartphones. Samsung claims to use 6% of recycled materials in their phones but does not disclose what these materials are. Of the brands which have “partially achieved” this target (Apple, Lenovo, Fairphone, LGE and Sony Mobile), only PCR plastics were re-used and not CRMs. For more on smartphone impacts Greenpeace’s report is certainly a good read.

No/low recycling efforts & non-transparent take-back programmes compound risks

In fairness, various brands have established take-back programmes for used electronics. Samsung, for instance, has a wide range of take-back programmes for different electronic products. According to their website, more than 698 million pounds of e-waste had been collected in the US as of January 2017. That said, it was only after extensive NGO pressure that Samsung re-used the materials from their Galaxy Note 7 recall in a new device. Again this is inconsistent action compared to Samsung’s good supply chain performance in the CITI Index.

Plus, many current take-back programmes lack transparency. There is little transparency from brands as to what is actually being recycled in these take-back programmes – are only the materials which are commercially viable to extract recycled? Is this why recycling rates for most key CRMs are so low?

A Circular Economy For Smart Devices – smartphones designed to be obsolete

 
Inadequate Obsolescence take-back programmes and recycling efforts are merely “symptoms”; with the cause being built-in-obsolescence. Smartphones have increasingly been designed with shorter life spans, not only in hardware, but also in software support.

This topic is well-covered in a report by Green Alliance, a UK think tank, “A Circular Economy for Smart Devices” (2015), which found the average years of use for smartphones, tablets and laptops to be 1.8, 2.6, and 3.1 years respectively. It was also found that by extending a smartphone’s life span by merely 1 year saves 31% of embodied carbon and 29% of water consumption.

Extending a smartphone’s life span by 1 year saves 31% of embodied carbon & 29% of water consumption

Furthermore, there are inconsistencies within brands regarding consumer software support across product types. For example, although Apple provides the most support, the iPhone 4 and the iPhone 3Gs had software support for nearly 4 and 5 years respectively, yet the iPad only got software support for 2 years. This short iPad support period makes even less sense when considering that 1) the average life span of a tablet is more than two and a half years and 2) larger devices like laptops and tablets contain more CRMs than smartphones. Do brands really have a holistic long term strategic thinking behind their electronic device designs?

It’s not just electronics. Fast fashion, another heavy polluter and user of water, also promotes a culture of waste. However, the tide is turning on that front as fashion is being re-designed into a circular economy. We recently co-convened a seminar with C&A Foundation on this very topic at World Water Week in Stockholm – see our key takeaways here.

How Repairable Is Your Mobile Device?

 
It’s repairability not just software obsolescence; smartphones also go obsolete because many models cannot be easily repaired even with minor breakages.

The most relevant and up-to-date report here is “How Repairable Is Your Mobile Device” by Greenpeace and iFixit. It assessed over 40 of the most popular smartphones, tablets and laptops from the past two years to see how easily companies are allowing consumers the access to repair or make spare parts and repair manuals available.

This report found that devices are purposefully made difficult to repair and maintain. Examples include some of LG and Samsung´s latest smartphones alongside Apple’s laptops. In particular, batteries are harder to replace, with Samsung’s Galaxy S8 smartphone and Apple’s Retina MacBook’s batteries completely adhered to the device panels.

LG & Samsung’s latest smartphones purposefully made difficult to repair

Moreover, the report found that some phones are made to be more fragile. For example, Samsung’s latest S8, designed with edge to edge glass on the front and back, has been called “the most fragile’ phone ever made”. Greenpeace also pointed out that out of the 17 brands assessed, only three – Dell, Fairphone and HP – provide all spare parts and repair manuals.

There have admittedly been recent efforts to enhance repairing of smartphones. Apple has pledged to put its proprietary machines for mending cracked iPhone glass in about 400 authorised third-party repair centres in 25 countries by the end of 2017. Samsung is helping a start-up called Puls which delivers Genius Bar-style repairs to customers at home. However, this is still inconsistent with easily breakable designs – will this continue with the iPhone X?

Scam Recycling: e-Dumping on Asia by US Recyclers

 
If ewaste the 4 actions above were pursued consistently, there would be less e-waste. At the moment this is still not the case and toxic e-waste is still dumped. China has already stated that it will not take any more “foreign garbage”, including e-waste. So where is it ending up?

Basel Action Network answered this question comprehensively in their report “Scam Recycling: e-Dumping on Asia by US Recyclers”. It was found that more than half of the exported trackers on used electronics made their way to Hong Kong’s New Territories. Of the 205 trackers activated, 48 were found in different electronics junkyards in New Territories.

Hong Kong is traditionally a transit stop for waste to enter China from the rest of the world. Now that China is cracking down, waste is piling up in Hong Kong, from electronics to plastics and even paper. This is a grave risk but with it comes great opportunity – can Hong Kong’s recycling industry seize it and upgrade?

Surely it is smart for electronic brands to follow China’s lead & pursue a circular economy?

The CLSA U® report notes that “Hong Kong does prohibit the import of hazardous e-waste but appears is less vigilant; or maybe this just shows how serious China is about cleaning up”. As the Made in China 2025 plan shows, China is already pushing for a circular economy for its CRM supplies. Surely it is only “smart” for electronic brands to follow their lead?


Further Reading

  • Toxic Phones: China Controls the Core - We review CLSA U®’s report which warns that transitional risks are abound as China says no to pollution and yes to a high tech future. What are the top-5 ‘bewares’? China Water Risk’s Debra Tan expands
  • Apple & Rare Earth Recycling - Although Apple is leading smartphone giants in green commitments, its transparency and traceability of rare earth supply can be improved. Plus, what lies ahead for rare earth recycling? Researcher Hongqiao Liu expands
  • At A Glance: Water Risk Dashboard - Need to gauge water risks across your operations, suppliers or investees at a glance? China Water Risk’s Hubert Thieriot expands on a new dashboard for exactly that – check it out!
  • 2017 World Water Week: Key Takeaways - The theme for World Water Week 2017 was ‘Water and Waste: Reduce & Reuse’ and perhaps unsurprisingly textiles was a key focus area along with circularity. China Water Risk’s Dawn McGregor shares both water and textile takeaways from Stockholm
  • Dug-Up In China: The World’s Critical Raw Materials - China is the largest global supplier of many critical raw materials but growing domestic demand could mean it becomes a net importer. How will other countries secure these materials that are key to a low carbon future? China Water Risk’s Hongqiao Liu explores China’s direction in the 13FYP
  • Can We Build A Clean & Smart Future On Toxic Rare Earths? - Almost all smart, green & clean tech need rare earths to work, but mining & processing these are highly polluting. Lead author Liu of China Water Risk’s new report:  “Rare Earths: Shades Of Grey” explores this paradox. It is time to rethink our clean & smart future
  • Rare Earth Black Market: An Open Dirty Secret – The black market exacerbates environmental pollution from rare earth mining in China. With low prices, depleted reserves and contaminated drinking water, find out if your smartphone, tablet or electric car is party to this. Hongqiao Liu expands
  • E-Waste: Downside to the Tech Revolution – China is one of the largest producers of e-waste globally. Faced with mountains of toxic e-waste, Green Initiatives launched the [WE] Project in Shanghai. Co-founder, Nitin Dani on this easy, safe & scalable way to recycle phones, home appliances & more

Rare Earths - Shades Of Grey - China Water Risk Report - June 2016

To understand the hidden risks behind smart and clean technologies we have explored the rare earth industry in China & globally, as well the associated environmental damage in our new report, “Rare Earths: Shades Of Grey – Can China continue to fuel our clean and smart future?”

 

The report is available in English and Chinese.

 

Woody Chan

About Woody Chan

Born in Hong Kong, Woody graduated from the University of Cambridge in June 2016 with a BA in Geography. His travels across Eurasia pointed him towards the nexus between environmental risk and global business. In particular, he is concerned with the extent and effects of wastewater discharge in China – the topic of his dissertation. At China Water Risk, Woody undertakes multiple research streams ranging from water stress in the HKH region to water issues in China’s mining and data centre industries. Moreover, he assists in the publication of the monthly newsletter and will be responsible for future updating and revamping of China Water Risk’s website. Also proficient at GIS mapping, he hopes to embark on a career which helps tackle climate change from a business and financial perspective.

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