Waste Compensation showing the way
By Joost de Kluijver

Circularity has become a permanent part of strategy for businesses and governments. But turning this strategy into action is a challenge. More so for the tech industry because there is very little innovation in circular implementation. The concept of Waste Compensation aims to change this.  

Filed under
August 11 2022
Share this story

Get the latest news and market insights delivered to your inbox.


A popular idea

Although the term is yet unfamiliar to the majority of the general public, it’s safe to say ‘circularity’ is abundantly being discussed. Countries across the globe are setting up circular strategies – from the U.S. to African nations – and the EU has even made the term central to its ‘Green Deal’. There aren’t many corporate websites left that do not have a page dedicated to the concept. Yet those mentions and plans do seem to represent what’s challenging about the term: they’re often rather abstract, long term and theoretical – not to say utopian.

The industry’s take on circularity

It's no different for the tech industry. For an industry as complex and huge as this one – electronics are everywhere as are manufacturers, their components suppliers (and their suppliers) – getting anything done is a challenge. It will require a change in the way the industry designs, produces, sells and interacts with customers. So pretty much changing everything.

So it’s little surprise that companies are not yet rallying behind ‘full’ circularity (“change everything we do for uncertain commercial benefits? No thanks”). So what would work to get an industry - renowned for its innovation and its customer-centric thinking – excited for a world without (electronic) waste?

Collaborating for (green) benefits

In the short term, the answer might be quite simple. The tech industry is arguably quite good at creating great products and services for its customers. Using that skill – i.e. putting commercial creativity to work for circularity – can create green results. This is happening today as companies start considering waste reduction as a customer service - instead of as a ‘responsibility’ or a ‘compliance need’. Helping customers, creating value for them, outsmarting the competition; these are concepts that some 80 per cent of tech companies are working on every day. So how about putting those commercial folks to work for a concept that is on the agenda for the C-suite, investors, NGOs and increasingly for customers?

There is just one hurdle: most tech firms are not really good at implementing circular thinking, yet. So how can we put the tech giants’ sales & marketing power to work, today? One answer is shown by Vodafone, in Germany. The company had already developed a green strategy, it obviously had very powerful commercial skills but it was not yet innovating on circularity. So the company teamed up with a circular innovator: Dutch ‘social enterprise’ Closing the Loop. 

Waste Compensation

Closing the Loop is a firm that has worked on something it calls ‘pragmatic circularity for tech’ since 2012. It went through a learning curve most large organisations might consider less desirable; filled with business model adjustments and dead ends. Its small size allowed for the flexibility needed for such a curve. In its ambition to turn circularity into practice,  Closing the Loop came up with a service it calls Waste Compensation. It boils down to a very simple notion: if a company adds a new device to the market, it can compensate that new device, by ensuring – shortly after the sale - the collection and recycling of a similar amount of electronic waste. This waste reduction is used to ‘compensate’ the new device, it makes it waste-neutral if you will. One crucial detail: the waste needs to be collected in a country where electronic waste is normally not collected.

Dubbed ‘One for One’ by Vodafone, the collaboration between the operator and Closing the Loop allowed for great synergy. A certified and solid but relatively small scale implementation of circular thinking was combined with a highly recognisable and valued consumer brand. The result is: for every device sold by Vodafone to its consumer base in Germany, one scrap device will be collected and recycled in a country such as Ghana, by Closing the Loop. At least some one million German devices will be made waste-neutral each year. And of course: at least a million dead phones saved from the dump. 

Economic and sector impact

Waste compensation enables the legal, traceable and environmentally sound collection of electronic waste in countries such as Nigeria and Ghana. The fact that these collections become traceable and that they are documented means that a business case for local recycling is being built. The recycling sector in these countries becomes more visible, and cash flow is generated that enables this sector to improve and grow. In Nigeria this has directly resulted in cooperation between recycling companies. The  knowledge sharing has enabled better recycling of computer monitors for example. Ultimately, this advantage will make investments in further local recycling more attractive.

Social & environmental impact

Because waste compensation enables the collection of devices according to higher standards (since more funds are available), there is a direct link to the benefits to society and the environment. Being a waste compensation service provider means you have to adhere to certain standards that are verified by third parties. Hazardous collection practices and illegal (often environmentally unsound) recycling practices are avoided. Both the health and safety of the collectors and the environmental impact in the collection countries improve through this method. 

Part of the puzzle

It is showing that circularity can develop from an agenda-topic to a commercial opportunity. It shows that out-of-the-box collaboration can help both circular service providers and tech brands. It shows that there is a way to fund the proper collection of e-waste in the developing world. 

But most of all, it shows that there is a starting point for circularity – even (or perhaps especially so) for the tech industry. A safe and engaging starting point that’s easy to explain to customers and to commercial colleagues. Legislation and customer pressure might be big drivers towards circularity at some point. Until then, I would advise tech brands to team up with young companies that have created commercially attractive parts of the circular puzzle. 

Joost de Kluijver is the founder of the award-winning circular innovator 'Closing the Loop'. He has a background in consulting and sustainability.