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April 09, 2003
Return to Sender: Dell Inches Toward a Computer Take-Back Recycling Program
by William Baue
Calvert-led coalition conducts shareowner action urging U.S. computer companies to implement
take-back programs for recycling obsolete computers and components.
SocialFunds.com --
What will become of the computer in front of you when it becomes obsolete? If it is an average
computer, planned obsolescence has dropped its life expectancy from five years to two years,
according to a 1999 National Safety Council (NSC) report. And if you are in the vast majority, you
will not recycle it--only about eleven percent of computers are recycled, according to the NSC.
 Even if you do recycle it, chances are high it will not
be recycled properly. According to a report published last year by the Silicon Valley Toxics Coalition (SVTC) and the Basel Action Network (BAN), 50 to 80 percent of
electronic waste (or e-waste) ends up in a developing country. There, it is not properly recycled
but instead becomes a hazard to both the environment and the disassembly workers who may be exposed
to its toxic components, which include lead, mercury, and arsenic.
Computer manufacturers
have been slow to address the problem of computer recycling. Take-back programs represent one of
the better solutions. In these programs, manufacturers take back computers in order to reclaim
reusable components and properly recycle the rest.
The Calvert Group, along with a consortium of other socially
responsible investment (SRI) firms and environmental advocacy organizations, has been conducting
shareowner action urging computer companies to tackle the recycling problem. Yesterday, the
coalition announced the signing of an agreement with Dell (ticker: DELL) to set global
computer recycling and take-back performance goals. The coalition also includes Green Century Capital Management, Walden Asset Management, and As You Sow, a foundation that coordinates shareowner action.
"Dell has said that they will come up with recycling goals by March 2004. That's almost a
year from now, which sounds like a long stretch of time, but we recognize that this issue requires
some research and that there are some very legitimate technical hurdles to overcome to establish a
corporate-wide benchmark," said Julie Frieder, an environment analyst with Calvert. "We're trying
to be as reasonable as possible without being pushovers."
The agreement calls on Dell to
establish and report quantitative recycling goals, track and publicly disclose the recycling chain,
and verify that recycling vendors adhere to a no-export clause prohibiting the removal of recycling
to developing countries. The agreement also calls for verification that Dell's U.S. recycling
vendors comply with health and safety standards on par with U.S. Occupational Safety and Health
Administration (OSHA) regulations.
"Dell has been the major focus of the computer
take-back campaign because they are the sales leader but environmental laggard," said Ted Smith of
SVTC. "This is a good first step and commits Dell to moving in the right direction, but the devil
is in the details, and the agreement leaves out most of the details."
For example, the
agreement does not address how the take-back program will be financed. The current system, which
charges consumers between $13 and $34 to take back computers for recycling, serves as a significant
disincentive.
"Dell only got 160,000 units back last year, and most of that, we
understand, is from their corporate leasing, not from consumers," said Conrad McKeron, director of
As You Sow's corporate social responsibility program.
Some critics consider it the
responsibility of the computer producers, not consumers, to provide for the recycling of their
products.
"We've got the price for recycling down to the lowest possible level at this
point, which is $15," said Cathie Hargett, a Dell spokesperson. However, Ms. Hargett would not
confirm whether Dell intends to take on all financial responsibility for the recycling of its
products.
Dell is not the only company where the consortium is conducting shareowner
action.
"In lieu of filing shareowner resolutions, we have been in a dialogue with IBM (IBM), HP (HWP), and Apple (AAPL), asking
for a very similar set of commitments," Ms. Frieder told SocialFunds.com. Dell's commitment puts
pressure on other computer companies to enact similar initiatives in order to remain competitive.
Such competitive advantage may become more of an issue in the near future.
"We're tracking
other issues on the horizon, including what's happening in European legislation with the WEEE
[Waste Electrical and Electronic Equipment] Directives," added Ms. Frieder.
In January,
the European Union refined rules that require manufacturers to take back for recycling all
electrical and electronics equipment they produce. Some critics have questioned why U.S. companies
have not displayed more foresight in preparing for the implementation of these laws and the
inevitable migration of similar initiatives across the Atlantic.
"What appears to be
rather stark from our contact with U.S.-based EEE manufacturers is their nervous--and sometimes
panicked--concern about the timelines for when the Directives kick in," said Dr. Harvey Stone,
managing director of the GoodBye Chain Group, an early-stage company focusing on waste-as-resource
solutions. "It's as if they waited a very long time before paying serious attention to the
legislation."
"I do believe many of these companies will be at a competitive disadvantage
when the legislation kicks in--they are likely to face fines, if not the stopping of product
shipments," said Dr. Stone. "Depending on the extent of the penalties and the press implications,
they could impact market share, revenues, earnings, and brand value."
©
SRI World Group, Inc. All Rights Reserved.
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