PC vendors seek profits in recycling

Technology vendors have long used Earth Day as an excuse to polish their environmental records every April, but in 2007, many companies are finding they can generate revenue through the practice.

In the past year, PC vendors like Dell, Hewlett-Packard, and Apple have expanded their programs to take back their customers' obsolete computers for free recycling. And cell phone vendors like Motorola and Nokia this week offered their customers greater incentives to return old equipment.

This is not just charity work, analysts say. In addition to improving their public relations, those companies can also generate new cash.

Some PC vendors earn growing revenue by selling parts as they see rising global demand for plastics, components, scrap, and refurbished PCs, according to a report from David Daoud, an analyst with IDC. Some vendors also use take-back programs as a way to convince customers to buy new PCs more often.

One of their biggest challenges is finding a better way to collect the flood of obsolete hardware. Just 7 percent of consumers put their used PCs into municipal recycling, while 34 percent donate them to friends and family, and 35 percent store them in an attic or garage, IDC said. The corporate world is nearly as bad, recycling only 30 percent of their PC assets through official channels, compared to donating 70 percent of them to nonprofit groups and employees.

In 2006, that picture started to change, Daoud said. The percentage of recycled PCs rose significantly, as companies cut the number of computers they tossed in the trash and saw a tight shrink in the demand for donated obsolete technologies.

One reason for the shift is greater awareness of other options, supported by Web sites like MyGreenElectronics.org, which lists the location of nearby recycling centers sorted by zip code. And the EPEAT government IT procurement site helps institutions buy PCs that are manufactured with less of the lead, copper, and cadmium that fills up toxic landfills.

Another reason is the growing realization in corporate boardrooms that companies can combine profit with social responsibility, said Bob Houghton, president of Redemtech, a firm that helps connect companies disposing of their old IT assets with recyclers seeking raw materials.

Most large enterprise companies have strict rules for IT procurement and deployment but only vague guidelines for hardware retirement and disposal, he said. Many of those companies are glad to make grand statements about upholding their environmental responsibility, but the message often gets lost by the time it reaches IT directors with limited budgets. Generating revenue from the process can change the whole equation.

"A sustainable IT operation has to be financially advantageous for the company and its shareholders. If you can do that, it becomes very easy to do. Otherwise, it's just risk avoidance," Houghton said. "Ultimately, being 'green' saves overhead, saves money in terms of lifecycle cost and extending your infrastructure, and the board benefits from what it wants to do with social responsibility."

IT vendors are lining up to help their customers find these savings. Sun and AMD say their servers and chips will reduce users' carbon footprints, the carbon dioxide emissions caused by electricity generation that can lead to global warming. Fujitsu and Salesforce.com say they are cutting their own carbon footprints through improved office and factory practices. And LANDesk Software says it can save customers up to $75 per PC every year with an application that puts idle computers into low-power sleep modes sooner.

Profit opportunities in e-waste recycling will continue to grow fast. The 490 million PCs retired worldwide between 2000 and 2005 will rise to 955 million retired between 2005 and 2010, according to an IDC forecast.