Aligning IT with global ESG priorities

SA IT is long overdue for a move to a circular economy.

Johannesburg, 17 Aug 2022
Zakhe Khuzwayo, CFO, InnoVent.
Zakhe Khuzwayo, CFO, InnoVent.

As environmental, social and governance (ESG) performance moves up the corporate priority list, IT’s place in a circular economy has become more relevant than ever before.

This is according to Zakhe Khuzwayo, CFO of InnoVent, who says circularity in the IT sector is long overdue, but changing global ESG regulations are now helping to make it a priority in South African businesses.

“The drafting of ESG disclosure regulations around the world and a growing focus on ESG investing are welcomed developments that may raise local awareness and help turn the tide of e-waste in Africa,” says Khuzwayo. “Waste management is an integral part of ESG, yet the e-waste crisis has been neglected for too long. It is expected that the annual generation of e-waste will reach 74.7 tonnes by 2030. Now is the time for end consumers and corporate IT users to focus on more sustainable approaches to the use and disposal of IT and electronics within a circular economy model.

“Taking a circular approach to the procurement, re-use and repair of IT assets will make a significant impact on overall ESG efforts, and close the loop in the IT circular economy,” he says. Khuzwayo notes that the Circularity Gap Report 2021 indicated that the global economy was only 8.6% circular in 2021. The report warned that business as usual would result in 65 billion tonnes of greenhouse gas emissions in 2030.

In addition, continued production without recycling is not sustainable: according to the UN International Resources Panel, the amount of raw materials extracted from the earth has more than doubled and is set to double again by 2060. The panel says: "Resource extraction and processing account for 90% of global biodiversity loss and water stress impacts, and half of total greenhouse emissions, excluding those related to land use."

“As growing resource consumption and its negative environmental impacts confront the world, carrying out business as usual is no longer an option for a sustainable future. For the future to have enough raw materials, our economy must become circular,” he says.

“Efforts are under way to combat e-waste and drive a more sustainable IT industry,” Khuzwayo says. “The Global E-waste Monitor 2020 reported that 13 countries in Africa had an e-waste policy, legislation or regulation in place. We also see major OEMs making a concerted effort to move towards recyclable and sustainably sourced materials and packaging, and greener manufacturing. However, we don’t see a mass movement toward a circular economy approach among customers. Customers and consumers of IT need to close the loop to enable a successful circular economy in IT.

“The IT sector and IT consumers must move away from linear models of consume and dispose, towards a circular model that supports the extension of the lifespan of devices and the reduction of waste,” says Khuzwayo.

InnoVent says there are several ways organisations can improve their ESG posture and move towards a circular IT economy.

“Sustainable product design and lower power consuming devices are an important first step. However, shared economy business models – including leasing and subscription services – are equally important.

"These models give organisations access to the technology they need, as they need it, and eliminates the burden of ownership where the responsibility for environmentally and safely discarding the equipment is passed on to the lessor or service provider,” Khuzwayo says. “This means that devices are fully utilised and re-used, and with the right provider, refurbishment is part of the value chain to extend the lifespan of the products.

Organisations should also consider purchasing or renting remanufactured or refurbished technology, which gives them access to quality technology at a lower price and helps promote principles of the circular economy by keeping devices in circulation for longer. Another aspect to consider is proper asset management, using IT asset tracking and professional IT asset disposal services to ensure that obsolete devices are identified, accounted for and disposed of in an environmentally sound manner.

“Now that ESG and a circular economy have become a priority, organisations in South Africa need to do more than talk about it – they need to have concrete roadmaps and start taking steps to become more sustainable,” says Khuzwayo.