This time up, we’ve had the opportunity to talk with one of the circularity experts at Foxway Group – Stefan Nilsson. Not only is he one of the founders, he is also the director of Sustainability and ESG. Foxway is a leading Nordic provider of sustainable IT services to large corporations and businesses through their IT lifecycle management solutions. In this sustainability chat, Nilsson will walk us through how a circular economy can be implemented in one’s business strategy to profit planet, people and business
What is circular economy?
Circular Economy is an alternative business model to the traditional ‘make-use-and-dispose’ linear economy. At its core, Circular Economy aims to keep resources in use for as long as possible, and thus design out waste and pollution. It has been described as the blueprint for the new, forthcoming sustainable economy.
What inspired you to start your business?
- The main thing about our organization has always been to observe and innovate. I started to see a trend where large companies started to rent IT services and workspace hardware, like mobiles, screens and computers. It was a challenge for large global providers, who wanted to develop the infrastructure around the services, and not only the workspace itself. Later on, we have also taken the place to be the circularity enabler on mobile operators. Mobile operators like Telia and Tele2 use Foxway to trade mobile phones, offering second hand or redeployed “almost new” phones as a concept. If you trade in your phone at, for example Telia, it will be available at Telia's low-cost brand OneCall in Norway.
So, that was the inspiration. We seize opportunities and try to fill in the large-scale challenges of the IT industry. We usually partner with large enterprises, operators, and large IT suppliers to make the change within this industry.
The IT industry is known for making products that have a short life cycle. How are you trying to change that mindset?
-I would say that the IT industry is making great products that have a long lifecycle, but the behavior of consumers and companies is what is shortening the lifespan. For example, iPhones can be kept alive for 10 years, but a normal user keeps the iPhone for two, maximum three years. This means that the product has several years left to be used. The lifecycle can be prolonged by repairing, upgrading – making the product clean and ready to be purchased one more time. We at Foxway enable organizations to sell iPhones or other IT products in the first, second, third, and fourth lifecycle.
So, the technology and the OEMs (Original Equipment Manufactures) actually produce great units that deserve a 10 years lifetime. To keep the item alive for at least a 10 years is also what the United Nation, World Economics Forum and all e-wasters point out as being important and necessary.
As an IT product has a value of up to 10 years, companies and customers need to be more willing to deploy the products and not always have to buy new ones. We at Foxway have the idea to change the mindset of companies and customers to be more willing to accept redeployed, second-hand or third-hand devices that are repaired and have a warranty, instead of always buying new ones. I think that we can see that mindset at companies today – it’s cooler to have a redeployed iPhone 10 than to have the brand new iPhone 12! It’s a sign of being aware of the consumer industry and actually accepting second-hand and circularity inside your usage. So this is absolutely a trend you can see today.
What efforts do you believe need to be made to make circular economy within the IT industry mainstream, seeing as to how dependent the industry is on early adaptors?
-I would like to see the public sector, legislation, and government to be more aware of this. Today, companies have a much broader view on this and understand the economy of circularity. Private entities are more willing to discuss internal redeployment, using IT as a service, and having second-hand devices in their procurement portals. If the public sector were more circular, they would accept to use a product of higher price for six years than a lower-priced product for three years. And then they would understand that sustainable technology also is more efficient in terms of economics and savings. But that’s not the case.
To compare with the private industry, I would say they are early adopters. I see many companies, like TietoEVRY, who aim for 100% circularity before 2023 and setting ambitious targets that’s worth following. You can see other entities and private companies that have 30% circularity, and they want redeployed devices in their procurement portals, etc.
Have you noticed any particular markets that are having a harder time adapting to circularity?
- I wouldn’t say so actually. I think it’s an underpinned door boosted by the COVID-19 situation, where supply chains have been struggling. Many understand that industries need to be more careful with what they have because you might not be able to buy anything new. The pandemic has been boosting the circularity thoughts further, and the “restart” is said to be more green.
You can see that in the encouragement of the EU Taxonomy as an example, where the legislation will boost the reduction of the carbon footprint. A workspace is equivalent to about 1 ton of carbon dioxide, and if you extend the lifetime by 25%, you reduce the footprint. Or, if you redeploy it, you actually don’t have to buy a new workspace and you’ll save these thousand kilos of carbon dioxide. I would say that all types of incentives are pointing in the direction of circularity and there are not really any hindrances.
I think both manufactures, OEMs, consumers, and companies, are quite positive about circularity. And I’m very impressed by Nordic companies and countries, and by the willingness of the industry to be part of this.
"I would say that all types of incentives are pointing in the direction of circularity and there are not really any hindrances”
What possibilities versus difficulties can you see with shifting to a circular economy in an industry that constantly needs to produce more to keep evolving?
- I would argue against that we constantly need to produce more to evolve. Approximately 80% of the climate impact of a device is from the manufacturing phase and therefore, the device needs to be used until the end of its lifetime. It is important to understand that devices have a value – and that value is divided within its life cycle. For example, If you trade in your old phone after two-three years, you can still get value from it, and the device itself can be redeployed and the lifetime will be prolonged. The possibilities here are to become more skilled in dividing the price based on the lifetime of the device and how to make the most of it.
There is a digital inequality that is globally present, and we have about 500 million students today that don't have access to IT products or the internet. However, thanks to being able to buy redeployed devices instead of new ones, they can actually afford a computer or mobile.
However, this brings up another challenge we’ve seen: the e-waste dumps that occur in some parts of the world, and the question is – do we contribute to that or not? Should we sell and export used devices to other countries? And my first answer would be yes. Because if it’s done responsibly, we can reduce digital inequality. But, it's expensive and challenging to manage e-waste, and there is a risk that the system is misused by actors that don't want to take the responsibility for the waste. These questions need to be explored more, and I would say that there are challenges in being responsible in this matter. However, there is also an opportunity to actually reduce inequality.
Do you have any starting tips for organizations who want to take the step to a circular economy within the IT industry?
- The best step you can do is to stop owning things, own less and start to use things as a service. Because the shared economy is when we start to actually pay for usage and use things as a service, then you know they will be in a circular loop for sure. If you are starting to use things as a service – you can be sure you will be a part of the circular economy by definition.
We at Foxway even have that as a mission: Own Less.
If you liked this Sustainability Chat and want to stay updated on our future guests, please subscribe to our newsletter. We can guarantee exhilarating chats with sustainability profiles you don’t want to miss!
Related blog post you might like:
