Every Day Has To Be Earth Day
April 19, 2021 Timothy Prickett Morgan
Every day is Earth Day at IBM, as it has become for many companies that are trying to lessen their environmental impact and increase the sustainability of their businesses and of our planet at the same time.
But that does not mean that we don’t celebrate the real Earth Day, which is on April 22 this year and which was first held on that day in 1970. Back then, at the birth of the environmental movement, 10 percent of the population of the United States took to the streets to demonstrate peacefully against the environmental and health impacts of a century and a half of largely unfettered Industrial Revolution. And Earth Day literally changed politics and business – first here in the United States, and then around the world.
With Earth Day in mind, we had a chat with Linda Demmler, chief operating officer at IBM Global Asset Recovery Services, which is the division of IBM Global Financing that handles the remanufacturing and reselling of IBM servers, storage, and other equipment as well as the recycling of components in these machines when they reach their end of life. We wanted to get a sense of the positive environmental impact that IBM and its customers are having as they keep machines alive and squeeze every last drop of economic and technical life out of them.
Timothy Prickett Morgan: As you know, sustainability and environmental issues matter to the C Suite, and the research from IBM’s own Institute for Business Value shows that companies and their IT organizations are increasingly focused on sustainability. IBM has a long history here, doesn’t it?
Linda Demmler: IBM’s environmental sustainability leadership is not a new trend. We are not all of a sudden jumping on the bandwagon. This is something that’s been threaded into our DNA since the 1960s, and it has been a part of our core beliefs. In the 1970s, we were one of the first companies that established a formal environmental leadership program. IBM Global Asset Recovery Services has gone through a lot of twists and turns over the years to take advantage of market opportunities, and in the 1980s, we were established predominantly to recover the residual value for IBM Global Financing’s off lease assets. In the 1990s, IBM started self reporting its sustainability goals and its progress in achieving of those goals. These were not driven by industry or government compliance requirements, but IBM’s own environmental leadership.
At that point, Global Asset Recovery Services was consolidated into a single corporate service for the recovery and resale of all used equipment across the IBM enterprise, and we could then really start reporting what percent were we reusing, reselling, and recycling. From 1995, when IBM first began including product recovery in our annual corporate environmental report, through the end of 2019, IBM documented the collection and processing of approximately 1.08 million metric tons (about 2.38 billion pounds) of product and product waste. In 2019 alone, more than 95 percent (by weight) was recycled, resold, or reused, and only 0.8% was sent by IBM to landfill or incineration facilities for disposal. In 2020, we started selling IBM Certified Pre-Owned servers, storage, parts and features directly to clients and our business partners on our open-access Marketplace website.
TPM: I’m a kid of the 1970s and am known for being a diligent recycler – every manufactured object is sacred because of the energy and pollution footprint it creates and can’t be wasted. You can refurbish and reuse all kinds of things for quite a time when it comes to computers, but recycling is a different thing, I think. It’s difficult to take things apart and recycle them, and difficult to get all of the metals out of this gear, and I suspect it is more complicated than melting a motherboard down and siphon the gold off.
Linda Demmler: It’s definitely getting more complicated, but there are initiatives making it easier. IBM, for instance, established our Product Design for the Environment program in 1991, which requires that IBM develop, manufacture and market products that can be recycled, and GARS offers input into the design cycle to make products easier to reuse, easier to recycle. Use a clip where you don’t need to use a screw. Use a reusable component as opposed to plastic that’s thrown away. Of the 95 percent that is recycled, reused, or resold, about 34 percent of that is actually reused and resold. We shred very little. We reuse so much So we have less raw material to recycle or dispose of as hazardous waste.
Sustainability is a great collaboration across IBM. Whether it’s our Global Business Services sustainability practice, our corporate environmental affairs and social responsibility teams, Global Asset Recovery Services or Systems Group, all of the business units work together to really make sustainability magic happen. It’s not just a standalone sustainability organization working in a vacuum. You have to work in partnership across the entire organization to achieve aggressive environmental goals.
As a revenue producing organization focused on profitability, GARS balances both growth and sustainability leadership practices. Every expense, every dollar matters. But we also are very concerned about how we continue to deliver 95 percent reuse/resell/recycle returns.
TPM: How long do you see machinery stretch out in life over time? People talk about cascading laptops being used for six to ten years, or more, over many users. I assume there are cascading servers, too. The average server at a hyperscaler or large public cloud has been three years, but it has been stretching out to four or even five years
Linda Demmler: Every product is going to have its limitations. I think storage devices with spinning disks probably have a little bit more wear and tear, although we can replace everything. That’s one of the benefits of being placed within a captive financing company for an OEM – we have access to the maintenance records, and we can see when to swap components out after four or five years.
TPM: Even when IBM was a disk drive manufacturer, they were only warranted for five years.
Linda Demmler: True. We have a couple of philosophies about the longevity of equipment. One is, extend the first life of a product. Can you sell it to the company that originally leased it? That’s great because then they can cascade it within their enterprise, and you don’t have any transportation costs or the environmental impacts of transportation. Once a product is returned we work to find secondary and even tertiary extended lives for equipment and this is particularly true for servers and PC equipment.
TPM: When something does really reach the end of life, such as an old system that has been used for a decade or two, do customers call IBM to get rid of it? I don’t want to just throw it in a dumpster somewhere.
Linda Demmler: No one wants that. IBM is committed to take back programs when clients call and say, “I’m done, you’re the original OEM, you take this back.” IBM participates in a variety of take back for recycling programs for covered products, batteries or packaging which vary depending on local regulations.
We support selective trade-ins. If customers are buying new equipment, we’ll take the old equipment off the floor. If you’re contracting with IBM Global Technology Services, now Kyndryl, and they’re outsourcing your datacenter, they also work with us to take out the datacenter equipment and repurpose that somewhere either inside IBM or resell it.
TPM: And when customers tell you it’s old, it’s dead, is it Global Asset Recovery Services that does that takeout, or is it a different part of IBM?
Linda Demmler: If it’s very old and there is no chance of remanufacturing, no chance of recovery value, the machine can be dismantled, parts sold and remains scrapped. Clients can contact IBM for no charge product recycling of equipment IBM has manufactured. More information can be found online at https://www.ibm.com/ibm/recycle/ww.
TPM: What is the most important thing about bringing sustainability to bear in the datacenter? I mean, there is an interplay between always running the most energy efficient machinery and upgrading, but to do that you still need to make full use of the older gear to cover the environmental impact of building it in the first place. These are difficult, and not always easy calculations. But where is the important place to start?
Linda Demmler: I’m on the phone every day with customers who are asking us, number one, what are our practices to recover value, and number two, how do they ensure environmental compliance?
The first thing companies need to do is have an environmental policy in place. It has to be in the DNA of the executing business units – not just a policy, but operational execution. And if you have that end-to-end accountability, all the way up and down through the company, it is possible to be effective at achieving your sustainability goals.
The other thing important thing is to wring the towel. We get every last drop of value out of the equipment that comes back to us and we resell. We have remanufacturing centers around the globe, some of them are run by IBM, some by partners. One remanufacturing center is located in Poughkeepsie, New York, and it receives all of our servers back from around the world and they manage that inventory for reuse, resale and recycling. Our operations for lower margin commodity equipment are more decentralized across IBM’s regions. Our remanufacturing facilities know what to do with servers, storage, and other IT equipment, and how to do this with minimal touch and minimal expense. We know prior to something being returned to us exactly if and how we can reuse it, resell it, dismantle it and recycle. And that happens as soon as it hits the floor in Poughkeepsie for instance. This allows for a very efficient process, which lowers cost, adds to IBM’s achievement of sustainability goals as well as to the achievement of our customers’ goals. It’s a win-win-win. See IBM’s Certified Pre-Owned servers, storage, parts and features on the IBM Marketplace website.
This content is sponsored by IBM.