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May 13, 2004
Dell First US Computer Company to Commit to a Global Recycling Goal
    by William Baue

In its 2004 Sustainability Report, Dell commits to increase its fiscal year 2005 computer recycling 50 percent over fiscal year 2004 levels.


Yesterday, Dell (ticker: DELL) became the first US computer company to publicly release a global recycling goal, culminating a three-year dialogue with a coalition of socially responsible investment (SRI) advocates. In its 2004 Sustainability Report, Dell committed to increase its recovery rate of used computer products for fiscal year (FY) 2005 by 50 percent over its rate for FY 2004, which ended on January 30. During this period, Dell recovered approximately 35 million pounds (the equivalent of approximately 16 million kilograms) of used computer products.

"As institutional shareholders, we are pleased by Dell's efforts toward full life cycle management of its products," said Julie Frieder, environment analyst at the Calvert Group, which led the coalition alongside the As You Sow Foundation. "We successfully used shareholder influence to encourage a mindset of responsible stewardship."

"Being the first to set targets is a big leadership step for one company, particularly a company with Dell's global presence," said Karina Litvack, head of governance and SRI at ISIS Asset Management, another coalition member. The coalition also included Dreyfus Premier Third Century Fund, Green Century Funds, Pax World Funds, and Walden Asset Management.

In disclosing the amount recycled, Dell identified six distinct recycling streams. These include recycled consumer computers; computers recovered from schools, governments, and businesses; computers Dell donated to US charities; Dell-sponsored recycling events; lease returns; and retired Dell-owned equipment, customer returns, and excess spare parts. The FY 2005 goal, known internally by the moniker "5-0 in '05," covers the first four categories, an important disclosure.

"The key is to know what is included and what is not--we are pushing Dell to be absolutely transparent about how the numbers are calculated," Ms. Frieder told SocialFunds.com. "We need to see goals from the other companies, too--ultimately, we want metrics that allow comparisons across companies and that put recovery rates in the context of some overall business unit, be it revenue, weight shipped, or units shipped."

The SRI coalition is using Dell's commitment to leverage other US computer companies, such as IBM (IBM) and Hewlett-Packard (HPQ), to commit to similar recycling goals. According to information provided by Ms. Frieder, IBM took back 1.1 million PCs in 2003; HP recycles almost 80 million pounds of computer equipment yearly, and expects to break down 42 million pounds of it in its FY 2004. So although they are playing catch up with Dell in terms of publicly-stated targets and transparent disclosure of metrics, other companies appear to be doing more actual recycling than Dell.

"If we estimate a five-year average age of returned product, our recovery rates this year represent less than 10 percent of Dell branded products sold in 2000," said Pat Nathan, Dell’s sustainable business director. "Considering our rapid market share gain and relatively recent restructuring of our customer recycling offerings, we're happy with the direction of the numbers, but we must increase our recovery rates."

"Given the affordability of our recycling offerings, it is clear we need to increase customer awareness of the value and importance of responsibly retiring used computers," he added.

Dell has lowered the cost of recycling to $7.50 for up to 50 pounds of equipment.

"Dell is working hard to provide an even lower cost and possibly no-charge recycling option for consumers," Dell spokesperson Caroline Dietz told SocialFunds.com.

Recycling computers is crucial because "PCs contain a nasty cocktail of lead, mercury, cadmium, and plastics that can damage the environment when landfilled or incinerated, and threaten worker health when recycled sloppily," explained Ms. Litvack.

In January 2004, ISIS published a report on information and communication technology (ICT) companies' electronic waste (or e-waste) disposal practices. The report focuses on the problem of exporting e-waste to developing nations, where it is improperly recycled. In its 20 03 Environmental Report, Dell committed not to export environmentally sensitive material to developing countries "unless Dell Environmental Affairs has approved the disposal channel."

"Dell is moving in the right direction and at the same time is being careful to not overstate what they are doing with absolute export bans," said Ms. Frieder. "We want to know that Dell has global tracking system in place and can verify where materials end up upon final disposition."

"They are taking this very seriously and have limited their recycling vendors to those they can audit and that have specific guidelines in place," she added.

 

 
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