CleanMed Conference April 14, 2004 Anne Peters Gracestone, Inc.

1. Greening Electronics Purchasing Decisions: End-of-Life and New Equipment CleanMed Conference April 14, 2004 Anne Peters Gracestone, Inc.

2. How to “green” electronics purchase? • Change the bid language • Change the purchase terms • lease vs. buy • Drive manufacturer responsibility • require takeback of obsolete computers • consider reuse loop • ask for assurance of recycling of old equipment • impact toxicity, ergonomics, energy use, packaging etc. to reduce waste

3. What should you do? • Review storage & surplus practices • This affects you in two ways. • Buying new computers & electronics - an opportunity to “green” them and thus reduce liability. • Buying “end-of-life” management services for org’s old electronic equipment. • data destruction • environmental matters - Ensure old equipment is recycled or managed in compliance as a Universal Waste

4. Storage Issues • Org removing 3,000 PCs/yr can save $1M/yr in storage & disposal $$. • Resale & recycle value of stored equipment depreciates 6-10%/month. • Data sanitization should be done upon retirement, before storage or surplus. • Total destruction for data security wastes equipment with value. • < 3-year old equipment has > reuse value

5. Surplus Issues • Surplusing has two risks: • Unauthorized release of secure data • Potential environmental liability from rebuilders buying lots of equipment & trashing what they don’t want - your org. still holds downstream liability

6. Purchasing End-of-Life Recycling Services • What do they do to recycle? Reuse? • Can they help with logistics? • Do they offer data destruction? Methods? • Labor source? • Regulatory compliance? • Sound, ethical business practices? • Need for legitimating credential… (“Pledge”) • Involve local businesses, non-profits Then - set criteria that meets your goals.

7. Legitimate recyclers will: • Tell how they manage e-scrap. • Tell how they process e-scrap. • Document & monitor downstream markets (where components or devices go for reuse, recycling, or disposal). • Generally charge a fee for their services. • Comply with hazwaste requirements. • Disclose all labor practices.

8. Adding Recycling to New Computer Purchases.CASE STUDY: Why did Denver want to “green” its purchase of 8,000 desktops? • Power of one. • Concern re CERCLA liability as old desktops are surplused, go through reuse cycle, & end up in Denver’s own landfill. • The light bulb as the IT managers “got it”. • Den Purchasing is ‘green’ Lesson Learned: You need a champion, an insider, and a compelling motivator for the organization.

9. Research Phase • 2002: Emerging resources on this: • Silicon Valley Toxics Coalition • Materials For Future Foundation • Product Stewardship Institute • Northwest Product Stewardship Council - eco-labels • Center for a New American Dream • Label websites • EPA EPP, DfE Lesson Learned: Nice collective learning curve; use the web & call too.

10. Process with Purchasing & DoIT • Determine IT & org. needs, preferences: • security & data destruction • end-of-life markets (prison, overseas) • contractual req’ts • re-use criteria (addressed in ordinance) • EMS compliance & internal green goals • life cycle cost of FPD vs. CRT • lease vs. purchase • WSCA-NASPO considerations • disaster recovery needs • labeling Lesson Learned: Ask for separate meetings on this. Lessons Learned: Interdepartmental cooperation. Procurement & IT wants to learn. Teach them.

11. Led to RFI & Informal Vendor Meeting • Issued Request for Interest for “Greening” Denver’s Upcoming Purchase of Desktop and Laptop Computers – Questions for Vendors 10/4/02 • Disclosure about the bidders’ environmental policies, manufacturing process, product contents. • Product features: modularity; design for recycling; energy usage; eco-labeling. • End-of-life management requirements. • Packaging and shipping. • Worker health and safety. • Purchase vs. lease. Lesson Learned: An OEM Rohrschach test. If everyone asks, OEMs must respond.

12. RFP: Environmental Criteria • Corporate environmental responsibility • EMS, ISO 14001 • Environmental Policy • Product take-back at end of life • with CCD monitoring capability • regulatory compliance ( downstream liability) • overseas markets only with CCD okay • takeback of current fleet

13. RFP: Environmental Criteria • Energy requirements • Product and packaging features • use of recycled materials • component labeling (aids EOL recycling) • 35% recycled packaging • reduce packaging quantities • 3rd-party certification - Eco-labels

14. RFP: EOL Management Requirements • State regulatory compliance (UWR) • Costs broken out separately in proposals • Assure CCD no parts end up in trash • Use by nonprofit orgs assure good EOL • Hope for cost savings from product value • EPA ID # at any recycling facility • Assure worker safety • No bad overseas markets Lesson Learned: Ask for more than you think you’ll get.

15. Weighting Evaluation Criteria • Environmental Concerns & EOL Pricing —10% • Product Pricing — 50% • Product Line Lifecycle — 10 % • Continuity of Components — 10% • Product Evaluation — 20%

16. What Denver got in response • No vendor was 100% responsive to environmental criteria • Had to ask for more info on: • EOL management practices • Pricing for EOL services breakout • Authority to monitor OEM’s recycling vendor • Pricing for EOL services for current fleet

17. Ranking of vendors’ green pts. Lesson Learned: Price wins in the end. 4/03

18. Denver took advantage of this • By summer, Dell was front-runner. • Dell’s community service to large public customers (San Diego “Digital Divide”) • Asked Dell to host recycle events (city residents only) for life of contract. • Got verbal agreement. • Didn’t end up in final contract language. • City can bring its e-scrap. Lesson Learned: Keep pressure on OEMs to do right thing in communities they serve.

19. Dell’s takeback terms for Denver • By Dell Asset Recovery Services • $24/system or $3,400/truckload • (24 pallets < $5/unit). • may be some credit to Denver • Denver palletizes & shrink-wraps. • Pickup at Denver-specified location, • 72 hrs. notice • Detailed record-keeping & tag removal • data destruction - but not guaranteed • Settlement Report & Certificate of Disposal

20. Lessons Learned: Summary Process • Get IT, Purchasing, & Environmental managers all involved early. • Get the most senior & political support in the organization as possible. • Establish evaluation criteria & weighting early. • Place cost of EOL services in Cost - 25% • 10% for other environmental criteria

21. Lessons Learned: Summary Content • Let OEMs know how important this is. Tie to other things. • It’s a risk management & cost issue. • Emphasize good takeback the most. • Increase emphasis on ROHS & WEEE compliance. If in Europe why not here? • Be realistic about budget constraints. • Push harder for OEM to absorb takeback costs.

22. Sample Desktop Purchase Criteria Weighting

23. Institutional Buying Power Public Sector Institutions • WSCA/NASPO RFP • State purchasing laws addressing green computers, evolving practices Private Sector GPOs • Adopt health care green procurement: www.hcwh.org/goinggreen

24. Anne PetersGracestone, Inc. For more information: 303.494.4934 voice 303.494.4880 fax annep@indra.com

25. Why are scrap electronics a problem in CO?