ECO-BRIEF
The Environmental Product Life Cycle:
Environmentally Conscious Product End of Life
Sponsored by: HP
David Daoud
February 2007
EXECUTIVE SUMMARY
www.idc.com
The last link in the IT product chain is end-of-life disposition. Until recently,
manufacturers and end users paid little attention to this stage; however, with
increasing environmental concerns and more rigorous regulation, the need for eco-
friendly product disposal is growing. HP has long played a leading role in eco-aware
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product end-of-life issues; and with its Asset Recovery management program, it
provides a solid infrastructure to assist its customers in extending the life of their IT
products when possible and recycling them and recovering raw materials from them
when it's not. Further, HP's Asset Recovery program guards against data security
issues, starting with providing secure transportation to the asset recovery center and
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extending to services ranging from one or more rounds of software-based wiping to
physical destruction of the device. For a graphical depiction of how end of life fits into
the product life cycle, see Figure 1.
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FIGURE 1
HP Approach to Reducing Environmental Impacts and Engaging
Stakeholders Across the Product Life Cycle
Source: IDC, 2007 adapted from HP
BACKGROUND
With nearly 1 billion PCs installed worldwide and with an equally impressive number
of servers, peripherals, displays, and accessories, environmentally friendly disposal of
IT assets has become an increasingly important concern for manufacturers and end
users alike. Unfortunately, many organizations have not adopted environmentally
conscious end-of-life procedures. In its 2005 Commercial PC survey, IDC found that
only 37% of U.S. organizations stated they have an electronic recycling policy, and
more than 50% donate unwanted systems, pushing disposal responsibility onto other
organizations. Since the problem will only continue to grow, implementing proper end-
of-life policies is critical for users and vendors alike.
Asset Recovery Services: HP Approach to
Product End-of-Life (EOL)
HP began pursuing environmentally friendly disposal policies long before they were
mandated by government regulation. Originally started largely in response to
addressing disposal requirements in its own installed base, HP's Asset Recovery
management program has subsequently evolved to the point where it now provides
eco-friendly product end-of-life programs to HP customers. Starting with an upfront
consulting practice in which HP works with customers to advice them on optimizing
total costs and recovery potential while mitigating risks, the HP Asset Recovery
program focuses on three primary methods to address product end of life:
! Extending the life of systems when possible through a refurbishing process
! Properly disposing of units that cannot be refurbished
! Extracting useful components and materials from recyclable systems to make
use of them elsewhere
Refurbishment and Reuse
The HP Asset Recovery service, primarily operated by HP Financial Services,
disposes of hardware products using a strict auditing, testing, refurbishment, and
resale or recycling process based on the condition of the hardware. In support of this
goal, HP gives its customers the option to donate working computer equipment, thus
elongating the life of the hardware, reducing environmental impact, and making IT
available to a wider user base. For products that are remarketed, HP shares the
proceeds of sales with its customers, extracting additional value for the customer
while elongating the life of the hardware. Further, by focusing on achieving the
highest recovery value, as opposed to looking only at cost mitigation through
recycling and recovery, HP helps companies pursuing a leasing strategy to better
achieve residual end-of-lease assumptions thereby maximizing the financial value of
their lease.
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Recycling and Recovery
For products that have outlived their usefulness, HP has a multiphase recycling
process that includes sorting, shredding, and plastics and metals separation, and
provides transport and logistical services to guarantee the proper movement of
hardware to HP's facilities. Recycling, primarily operated by HP's Imaging and
Printing group, is offered for a wide range of products including servers, PCs,
displays, peripherals, and print cartridges. The extracted products in their final stage
become raw commodity material recycled into other industries.
HP's recycling procedures are in strict compliance with local, regional, and
international regulations. HP has led efforts to establish proper recycling policies in
the United States, Europe, and in key markets where it operates. In the United States,
HP has engaged federal and state governments, while in Europe, HP has contributed
to noted environmental regulations such as the RoHS Waste Electrical and Electronic
Equipment (WEEE) directives, which control the use of six materials, including lead,
mercury cadmium, hexavalent chromium, polybrominated biphenyls (PBB), and
polybrominated diphenyl ether (PBDE).
HP's policy is to meet or exceed all global reuse and recycling regulations. It applies
this policy to its own infrastructure and has adopted an assurance process to ensure
that recycling partners conduct their operations in an environmentally friendly manner.
Data Security and Environmental Stewardship
For end-user customers taking advantage of product reuse or recycling, data security
issues are of paramount concern. Whether for regulatory compliance, customer
privacy, or competitive intelligence, companies cannot afford to have sensitive data
leaked during the process of asset disposal.
For this reason, as part of its Asset Recovery program, HP provides data destruction
methods that match the sensitivity of the data and each customer's security
requirements. From software-based processes that involve one or more hard drive
wiping rounds, with the most stringent utilizing a three-time wiping based on U.S.
Department of Defense requirements, to physical destruction for those requiring the
ultimate security guarantee, HP employs a tight chain-of-custody control and
documented processes to demonstrate regulatory compliance.
IDC Analysis
IDC believes that HP's strategy to handle hardware end of life is among the industry's
best of breed thanks to a growing refurbishing and recycling infrastructure, a
worldwide network of recycling partners, and multifaceted approach of extending the
life of hardware when possible and recycling when the product is no longer useful.
With its global reuse and recovery capabilities, HP can provide a single point of
contact for large multinational enterprises to manage their end-of-life assets.
Opportunities for HP include leveraging its leadership position and extending end-of-
life services to a wider user base, enabling it to achieve economies of scale for its
investments in this area.
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At the same time, much like other IT vendors, HP faces a number of challenges. As
IDC research indicates, end users remain poorly educated on their options, and end-
of-life functions in organizations are often poorly managed. So while the infrastructure
for environmentally compliant disposal and recycling is growing, HP and other
industry players will need to focus on additional user education.
CONCLUSION
As the volume of IT products to be retired grows and environmental regulations
become more stringent, HP appears to be well positioned to meet the challenges of
customers' product end-of-life issues. With the right mix of processes, facilities, and
technologies, IDC believes that HP is likely to remain one of the leading players in
providing IT product end-of-life services.
HP Products and the Environment Document
Series
This eco-brief is part of a series of IDC documents commissioned by HP to discuss its
environmentally aware policies and practices. This series includes a core white paper,
HP Products Built to Protect the Environment, as well as standalone eco-briefs
focusing on specific product areas: product design, manufacturing, power and
cooling, and product end of life
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Copyright 2007 IDC. Reproduction without written permission is completely forbidden.
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