How Green IT improves the ESG rating and what reporting do you get from circulee?

The positive impact of used IT hardware on the environment and methodology

The production and use of IT hardware have two significant negative consequences for the environment. On one hand, a lot of CO₂ is released during production, especially due to the high energy demand in the manufacture of LED diodes for displays. On the other hand, electronic waste is the fastest growing waste stream in the world, with an increasing trend: humanity generates more than 50 million tons of e-waste annually (the weight of the Great Wall of China), and the number is still growing. This is a clear characteristic of a linear economy that is unable (and lacks incentives) to reuse materials or extend product lifespan through repair.

In contrast, a circular economy has the clear potential to make the IT hardware industry sustainable and virtually eliminate its negative impacts. At circulee, we employ a circular model to refurbish IT hardware for professional use and give it a second life in a B2B context. Together with our customers, we avoid the production of new hardware and can collectively reduce up to 80% of CO₂ emissions. The following graphic illustrates the product carbon footprint of various device types across their lifecycle.

To make this more tangible: A single IT device like a monitor generates nearly as much CO₂ as three domestic flights (roughly three times the total CO₂ emitted during a flight from Berlin to Munich or Frankfurt!).

Therefore, used hardware can significantly contribute to making businesses more sustainable. To date, circulee has helped our +1200 customers save over 2,500 tons of CO₂ (as of May 2024). The underlying methodology for these figures and the positive impact of Green IT is detailed in the circulee Whitepaper, based on independent market research commissioned by CHG-MERIDIAN AG in 2021.

ESG Rating: How can Green IT help improve it?

The goal of any IT sustainability strategy is to measurably reduce CO₂ emissions, resource consumption, and electronic waste, thereby enabling IT functions and hardware procurement to make a measurable contribution to an ESG strategy. As described above, using used IT hardware results in reducing Scope 3 emissions, i.e., indirect emissions (both upstream and downstream). Up to 80% of the CO₂ footprint and up to 70% of IT hardware materials can be reduced or reused through the use of refurbished devices.

There is increasing regulation around sustainability reporting and corresponding obligations for companies and management. Additionally, there is growing pressure from stakeholders to report relevant metrics (e.g., investors). The following graphic illustrates the various components of ESG reporting obligations mandated by the European CSRD (Corporate Sustainability Reporting Directive), which has been legally binding in the European Union since January 5, 2023.

Green IT enhances the environmental performance of companies and can thereby improve ESG ratings. The following graphic illustrates the structure of the CSRD directive in reporting standards and underlying ESG dimensions: Overall, Environmental, Social, and Governance. The use of refurbished IT equipment should be incorporated into ESG reporting - the CO₂ and e-waste savings contribute to the "Environmental" part and improve the "Climate Change" (Standard ESRS E1) and "Pollution & Resources" (Standard ESRS E5) dimensions.

What impact reporting do you receive as a circulee customer?

Circulee provides you with an automated CO₂ savings report as part of our services. In your customer account, you can use the interactive CO₂ savings dashboard to visualize and track your CO₂ savings in real-time. This allows you to see the positive impact of choosing our pre-owned hardware.

Additionally, you can generate a downloadable CO₂ savings report as well as personalized marketing materials, perfect for celebrating and sharing your green achievements internally or on social media, e.g., LinkedIn, or as a base for your ESG reporting.

The exact translation of CO₂ savings into ESG ratings or improvements should be carried out by trained and responsible personnel, based on internal and legal guidelines (circulee itself cannot and may not make any statements regarding the ESG rating or ESG reporting of customers).