Circular IT: we need to think big, but start small and act now

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Circular IT: we need to think big, but start small and act now

ABN AMRO’s journey to circular IT

Circular IT can have a substantial positive impact on the environmental footprint of organisations, and offers significant business opportunities — even though it is still in its infancy. Currently, we are pioneering this emerging area of circularity with Dutch bank ABN AMRO and her IT suppliers. What barriers do we encounter, and how can we overcome those?

By Jacques Buith and Dieuwertje Ewalts

The take-make-waste model is way past its prime. Climate change, the scarcity of raw materials and declining biodiversity are threatening our wellbeing. We cannot continue to use virgin materials, while at the same time, valuable used materials and products are disposed as waste.

Circularity is a future proof alternative for the take-make-waste model, offering the next step in our economic model. Circularity closes the loops of products, materials and resources, by extracting maximum value from resources in use, and minimizing waste and emissions.

At the same time, circular IT offers significant business opportunities. Circular business models like ‘as a service’ models boost innovation, and can open up new markets and client groups. Besides that, sustainable organisations have an advantage in attracting and retaining employees.

Therefore, it makes sense that circularity is becoming a top priority on the sustainability agenda of many organisations, including our clients’.

Banking for better

As one of the first large corporates, Dutch bank ABN AMRO recently started an ambitious circular IT project. “Circularity fits perfectly into our purpose: banking for better, for generations to come”, says Wiebren van der Zee, Design & Engineering IT Architect at ABN AMRO. “We want to be a frontrunner, minimise our footprint and be ahead of regulations. For this, we get full support from our board. Our CTO Jan van Groningen says that sustainability is one of our most important drivers to do business.”

We have worked closely with Mr Van der Zee to draft a roadmap towards circular IT assets in the past few months. Our starting point? Think big, start small, and act now. Circular IT is a big ambition that we can only take on if we start small: defining where we are now. We have analysed ABN AMRO’s IT assets, selected a circularity methodology, worked with ABN AMRO’s IT suppliers to collect relevant data, and calculated the baseline circularity of IT assets.

Data quality and availability

Significant limitations in this project were data quality and data availability. While ABN AMRO’s IT suppliers were supportive and enthusiastic on this emerging topic, determining the circularity of the materials per product type proofed extremely difficult. Therefore, we often had to turn to company-wide metrics reported in public sustainability reports. Resulting in another challenge of comparability of the metrics, as definitions of circularity vary within the industry. Collaboration with the suppliers helped to clarify and align.

We applied these metrics in WBCDS’s CTI framework to make a first estimation of the circular inflow and circular outflow percentages of ABN AMRO’s IT assets. These numbers now form the baseline for ABN AMRO’s ambition.

A powerful tool

Intuitive metrics like these circular percentages, are a powerful tool in every organisation’s sustainability journey. They make the current situation tangible, help to set goals and are essential for sustainability reporting. With the upcoming EU taxonomy and the EU Corporate Sustainability Reporting Directive companies have to report on circularity metrics in the future.

Circular inflow of IT assets at ABN AMRO is still low, while the circular outflow is relatively high. The same is probably true for most corporates. They tend to procure new IT assets, which are largely made from virgin materials, and at the end of the economic life of the assets, these often get repurposed in a second life. Most IT suppliers have take-back systems for their assets. There also is a growing number of NGO’s, that provides high-quality refurbished IT equipment donated by companies to social and educational projects or that collects e-waste from emerging and developing countries as compensation programs.

Maturity of circular IT design

For the ABN AMRO project, we have discussed the current and desired future state of circular IT in a round table session with ABN AMRO’s and her key IT suppliers from Japan, Europe and the United States. Besides the complexity of circularity data and lack of standardised definitions, the immaturity of circular design was perceived as one of the biggest barriers.

Currently, there aren't many true circular IT products available. Circular design includes a range of options including modular design, standardisation of components across product lines, design for durability or repair, and design for recycling. Some options may reinforce the other (e.g. modular design and repairability) while others might negatively impact the other (e.g. designed for durability and recycling) — adding to the often already complex development of IT assets.

Most suppliers indicated that circular design is becoming more important, and that they have started with the redesign of a few models. However turning to full circular design and supportive circular business models, will require a transformation throughout the organisation, the industry and the entire value chain.

The beginning of something big

“We can only overcome these and other barriers if we cooperate”, says Mr Van der Zee. “If companies like ours ask our suppliers for more data and circular products, they have to become transparent or start moving. They will ask their subsequent value chain suppliers for more data, for circular materials and products. A small project like this can contribute to something big.”

We couldn’t agree more. This small project has started conversations between ABN AMRO and her suppliers and sparked actions within the supplier organisations. Frontrunners like ABN AMRO show that if we want our big ambitions to become a reality, we need to start small and build strong partnerships throughout the entire value chain. And we have no time to waste, so we have to act now.

More information

For more information about circular IT, please do not hesitate to contact Jacques Buith or Dieuwertje Ewalts via the contact details below.

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