Waste electronics and the opportunity for circular thinking
Jamie Butterworth, founding partner of Circularity Capital, discusses the highly concerning findings of an exposé by the Financial Times into e-waste disposal and explains why circular business models, not better recycling practices, are key to tackling the issue head-on.
According to insight from sustainability firm Anthesis, more than 30,000 tonnes of electronic waste are illegally shipped out of Britain every year – with the vast majority destined for developing countries where legislation is far less stringent.[1] What’s more, an additional 87,000 tonnes is said to be either fly-tipped or funnelled into illegal UK waste sites, leaving toxic substances to leach into the natural environment.[2]
However, while shocking, every retailer, local council and recycling company still remains adamant that it is following European best practice and doing the right thing with the end of life tech that we throw away. These opposing views led the Financial Times’ visual storytelling team to fit tracking devices to a number of broken laptops, enabling them to track the journey for themselves.
Rather than the traceable route that many would have expected, items were taken on a mystery tour of Britain, stopping at a Norfolk beach, residential addresses in Slough and a warehouse in rural Wales along the way. While none of the laptops made it to international waters, one unit was stolen from the supply chain twice, while others were sold to unregistered eBay sellers.
The exercise uncovered two clear, but uncomfortable truths. Firstly, that the Environment Agency is struggling to cope with such a vast – and ever-growing – quantity of used electronics and, secondly, that the UK’s increasingly wasteful throwaway culture is resulting in hugely damaging environmental consequences.
While many would argue that this is simply a case of underinvestment in waste infrastructure, lacking management and poor policing, at Circularity Capital we believe that the issue is far deeper. Indeed, rather than trying our best to close the stable door after the horse has bolted, we should be looking to tackle the global e-waste challenge at its very source. In essence, by embracing forward-thinking solutions to prevent waste from arising in the first place.
How circular business models are tackling global e-waste
When it comes to tackling e-waste, a growing number of companies are seeking to disrupt the dated, linear ‘take-make-dispose’ method of production and consumption – to curb escalating volumes and unlock the commercial opportunities offered by circular business models.
One company leading the charge when it comes to tackling e-waste is Circularity investee business P2i, a global leader in liquid repellent nanotechnology products. Founded in 2004, P2i works with original equipment manufacturers (OEMs) to enhance electronic devices by making them liquid resistant, providing waterproof protection, improving their reliability and enabling them to survive liquid exposure from everyday accidents.
P2i’s range of innovative coating solutions delivers up to IPX8 lifetime protection without the need for mechanical seals or gaskets. More than 1,000 times thinner than a human hair, its coating reduces the number of devices being scrapped or returned due to water ingress, thus keeping products in circulation for longer.
Renowned worldwide, P2i has protected more than 700 million devices worldwide with its unique coatings. Key customers include leading manufacturers of automotive components, medical devices, drones, IoT technology and consumer electronics.
Another example is our portfolio company Grover, Europe’s market leader in consumer tech subscriptions. Grover enables individuals and businesses to rent technology on a monthly basis, removing the need for upfront purchase costs and providing more flexibility than a financing plan.
The subscription service provides unbeatable access to tech by providing access to more than 3,000 products and offering complete control of the subscription length to maximise affordability. At the end of the original subscription period, the customer can either buy the product, send it back or continue on a month-to-month basis.
Both companies share a commonality – that recycling e-waste should be considered a last resort, not a first choice. As opposed to seeing more and more devices lost to global waste crime, P2i and Grover are tackling some of the most common factors behind the origination of e-waste – turning a challenging situation into a future-proof solution for the industry of tomorrow; benefitting both the environment and the bottom line.
Specialist support for businesses
When we founded Circularity Capital in 2015, we did so with the firm conviction that the entrepreneurs of businesses like Grover and P2i, who are developing the circular innovations to make this transition a reality, deserve a specialist investor with the right knowledge and network to unlock their full potential.
We have worked hard to develop a firm with the right capabilities to make this a reality and are currently deploying our second dedicated circular economy private growth-equity fund – at €215m, it is the largest of its kind globally.
Our current portfolio includes a number of leading circular businesses across Europe, but our ambition is to further grow this investment base by supporting leading, innovative, circular businesses where we can add value as a domain expert investor.
It’s clear to see that the circular economy provides a strong framework for decoupling business growth from resource constraints, enhancing resource productivity and driving competitive advantage. It also highlights a subset of business models which are enabling this transition and can generate premium returns for investors. Indeed, circular economy thinking will drive industry for years to come.
The supply chain is set to experience rapid change over the coming years. At Circularity Capital, we’re looking forward to playing a leading role in the transition towards a more resource-efficient future.
[1] https://www.materialfocus.org.uk/press-releases/electrical-waste-challenges-and-opportunities/
[2] https://www.materialfocus.org.uk/report-and-research/an-independent-study-fly-tipping-unregistered-waste-carriers-england/