Society is demanding greater sustainability, and policymakers are creating the appropriate business and regulatory environment across all levels. This puts pressure on companies to play their part in shaping the transition to a more sustainable economy. What role can the circular economy play in this? And how is the shift in customer behavior changing the market?
Matthias Steybe, Group Sustainability Officer at CHG-MERIDIAN, discusses these questions with Dr. Rüdiger Kühr, circular economy expert at the United Nations Institute for Training and Research.
Steybe: Not yet, but I have noticed that CHG-MERIDIAN employees are starting to ask whether they can use their IT equipment for longer, or might be allowed to order refurbished devices. We are seeing the same trend with our customers. There is a greater focus on using technology responsibly.
Kühr: Overall, sustainability and related topics have been pushed right up the agenda, in both the political and the private spheres. There is a new awareness of our consumer society.
Steybe: This zeitgeist is defining the way we think. The automotive industry has been under close scrutiny for some time regarding its environmental impact, and has reacted accordingly. This trend is now continuing in the IT sector.
Kühr: IT is a little behind the curve when it comes to sustainability, despite the public perception that the industry is highly innovative. The discussion of IT’s environmental impact and the launching of zero-emissions campaigns are only recent developments.
Steybe: Yes, the IT sector has certainly been lagging behind. As a result of the scarcity of resources and the related costs, the million or so used assets that we refurbish for another lifecycle now command a higher price. Demand is rising rapidly, leading to new business models based on the circular economy.
Dr. Rüdiger Kühr has a PhD in Economics and Social Sciences, and is one of the world's leading experts in the circular economy. Since 1999, he has been teaching and conducting research at the United Nations University. He is currently the Director of the Sustainable Cycles Programme at the United Nations Institute for Training and Research (UNITAR).
Kühr: The IT sector’s way of thinking is still linear. A product’s end-of-life phase and the closing of circular loops are rarely a consideration at the design stage, and that is down to a lack of internal communication. The IT industry is not as innovative as its reputation would suggest.
Steybe: We have identified a shift among our customer base toward the types of alternative model that we, as a technology management pioneer, have championed for more than 40 years. Access over ownership is an increasingly popular concept, and the sharing economy is creating a new market mechanism. But there is still plenty of room for improvement, particularly when it comes to the longevity of products.
Matthias Steybe has been the Group Sustainability Officer at CHG-MERIDIAN since mid-2020. Together with his interdepartmental team, he is responsible for helping to shape the Group's sustainability strategy, and for deriving the required action plans and implementing them internationally.
Kühr: There is talk that it represents the start of the next industrial revolution. And a revolution is exactly what is needed.
Steybe: This gives us sustainability managers plenty of food for thought. Companies essentially have to earn their social license to operate from their shareholders and other stakeholders. What’s more, companies have to be able to show tangible results from their actions; statements of intent and statutory requirements are no longer sufficient. The phrase “If you want to fix the climate, you have to fix the economy first” could not be more fitting.
"The IT industry is not as innovative as its reputation would suggest. Its way of thinking is still far too linear."
Kühr: Mainly from society. Policymakers only pick up on trends that are popular, but offer little in terms of vision. Among other things, this is down to election cycles, which is why we probably shouldn’t expect too much from governments. Businesses, on the other hand, must think and plan for the long term. This is where the interaction between business and society is a key driver.
Steybe: One example of successful interaction is the EU’s sustainable finance initiative, part of its Green Deal. By demanding longer-term thinking in investment, policies are having a positive impact, reflected, for example, in our ESG-compliant syndicated loan from Helaba Landesbank Hessen-Thüringen.
Steybe: Competition boosts innovation. Just think of Car2go. In this case, a company within the Mercedes-Group questioned the primacy of buying. That was revolutionary. We are now witnessing something similar in IT. Policymakers can accelerate certain processes, of course, in the same way that the Green Deal is driving sustainable finance. Nevertheless, I firmly believe that the impetus for innovation should come from businesses.
Kühr: To some extent, new business models are imposing a form of self-regulation. Going forward, companies will only be buying the service, not the device. This will lead to greater component replaceability.
"If you want to fix the climate, you have to fix the economy first. The market is most likely to succeed in changing the market."
Kühr: Correct. There is no need to sacrifice our quality of life nor to do without innovation and the latest technology. The task is to maintain the way of life to which we are accustomed while exploring new approaches.
Steybe: We are talking of a digital revolution. One that is creating a new operating system for the economy.