The big picture
- For most businesses, IT hardware is indispensable to their day-to-day operations.
- A company’s IT devices typically have a lifecycle of two to three years, after which they are replaced by new equipment. Eighty-nine percent of companies recycle less than 10 percent of their hardware overall.
- For the average new laptop, manufacturing alone accounts for 85 percent of its CO2 emissions, amounting to around 356 kgs of CO2.
- Achieving circularity for IT equipment can significantly reduce its CO2 emissions.
The challenge at hand
In 2020, the ICT sector accounted for 2-6 percent of global greenhouse gas emissions. This number is set to rise to 20 percent by 2030. End-user devices—laptops, tablets, smartphones, and printers—generate 1.5 to 2.0 times more carbon globally than data centers. Extending the lifecycle of IT equipment—laptops, monitors, and phones, for example—can significantly reduce devices’ CO2 footprint by 70-80 percent (when using pre-owned IT hardware). To address this issue, a circular-economy business was built that sells pre-owned versions of these common pieces of IT equipment to smaller businesses and startups. Giving new life to pre-owned IT equipment extends its life cycle beyond the usual two to three years.
Results achieved
McKinsey partnered with a leading tech start-up to help build a digital circular-economy provider for pre-owned IT hardware for businesses, from scratch. Within three months, we assisted in developing a Minimum Viable Product to take to market, supported by a team of experts.
To date, Circulee has provided such sustainable hardware to more than 200 B2B customers. Customers may choose between buying or renting equipment from the provider, who offers to buy back devices after use for secure refurbishing and additional re-use or recycling.
By providing a circular solution for IT hardware, the start-up is helping to reduce greenhouse gas emissions and to fight climate change. The provider ensures sustainability across multiple dimensions:
- Choosing pre-owned IT equipment helps customers decrease CO2 emissions by up to 80 percent and their IT equipment expenditures by 30 percent—all without sacrificing device quality or B2B support.
- More than 250 tons of CO2 have been saved (equaling more than 1,800 domestic flights).
- More sustainable packaging has been implemented by removing nearly all plastic components from standard packaging.
- A simple CO2 calculator has been set up for IT hardware.
- With the client, McKinsey developed a case study with climate-focused materials that the client can showcase to customers.
- A whitepaper on the sustainability impact of pre-owned hardware for businesses was published as a guide for IT decision-makers and executives.
