Joab MeyerBy Joab Meyer
While electronic waste continues to pile up at an increasingly rapid pace, leading IT firms such as Hewlett-Packard are finding being green and promoting corporate social responsibility can actually increase operational efficiency in China. Rather than developing a program to merely address a trendy corporate issue, the company has a track record of tackling these tough issues in a way that makes good business sense.

Waste that is Increasing in Volume and Speed
In addition to the vast amounts of electronic waste that is being discarded domestically and streaming in from overseas, the pace of such waste is rapidly growing in China. It is the swift growth of Information and Communications Technology goods sales in China and the rapid pace of changing technology that conspire together to dramatically increase the volume of the e-waste problem. Such rapid ICT sales growth can be seen when, according to The Seattle Times, 20 million computers were sold in China in 2005 and by the end of 2007 the number of units is expected to be 30 million.

The potential e-waste impact of the recently released Windows Vista operating system in Hong Kong illustrates the influence of changing technology. In February 2007 as many as two million Hong Kong Windows-based PC users first had the opportunity to upgrade to the Vista system, but only a small handful have devices with sufficient computing capacity to run Vista. South China Morning Post reports the significance is that changing technologies like Vista decreases the length of time an average user take to replace their machine and in turn will only add to the nearly 400,000 computers thrown out in Hong Kong each year.

Enter the Dragon
From the initial identification of the e-waste problem HP has been an IT industry leader in addressing the issue through various recycling programs. In fact, the company is reportedly on track to recycle one billion pounds of electronics by the end of 2007. In addition, the company has committed to eliminating a range of hazardous chemicals from its products and has helped lobby for state laws requiring manufacturers to take back old equipment.

In China, where HP has over 5,000 employees, the company has recently launched a first-of-its-kind public and private sector collaboration called the Cartridges for Dragon Recycling program. This program reportedly aims to provide simple and environmentally friendly methods to collect used HP printer supplies to prevent inappropriate disposal methods, which may impact the environment. In cooperation with non-governmental organizations, the program reaches out to community groups through activities that increase the audience's awareness of recycling efforts for both printer supplies and computer hardware. Altogether, HP says it has engaged 14 government offices, 15 communities, 13 public areas, and more than 40 schools and 20,000 students in the program since February of 2005.

The CSR – Innovation Connection
What is most significant about HP's recycling program from a process innovation standpoint, however, is the corporate efficiency it stimulates. For example, printer cartridges recycled through this program compose 25% of the scanner and printer covers for a number of models; the remaining plastic comes from beverage bottles. For HP such a use of recycled materials represents a raw materials cost savings.

The company's intentions to fully utilize this process are apparent in their operation of several recycling plants, which enable them to determine the most effective design features to facilitate product recycling. In addition, HP has developed Design for Recyclability (DfR) standards that apparently integrate clear design guidelines and checklists into every product's design process to assess and improve a product's recylability. Furthermore, such standards not only improve the disassembly and recycling process for these products, but also facilitate easier product assembly.

Community Impact
Whether it is decreased raw materials costs or increased product assembly rates, the fact HP's CSR practices are integrated into their business process results in increased operational efficiencies. The program also has external benefits, which benefit society at large. Communities benefit from a reduction of illegal e-waste dumps and trash.

In the end, truly innovative CSR policies simultaneously address both corporate and community needs. The third piece in this series will demonstrate how such CSR policies have a similar impact on the ability of a firm to attract and retain top talent in the hypercompetitive Chinese IT Industry.

About the author:
Joab Meyer has a B.A. in East Asian Studies from the University of Minnesota and is a May 2007 MBA graduate from Thunderbird School of Global Management. Joab had the opportunity to gather data on CSR activities in China while participating in the Beijing AmCham CSR committee and working in Beijing in 2006. He would welcome comments on this article at [email protected]

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