Waste not, want not

Each year UK households and businesses discard an estimated one million tonnes of electrical and electronic equipment

Many chief information officers (CIOs) suffer as they try to get to grips with the complex area of IT regulatory compliance.

Now, with the increasing demand for environmental sensitivity, there is yet another regime to get to grips with ­ – green IT compliance.

However, there are plenty of opportunities that arise for businesses which are quick off the mark and understand the legal aspects:

• Your business could win more work if it can prove to be green compliant.
• By reducing your energy bills, you could keep on-side with the financial director.
• You might even help save the planet.
  

This article looks at some of the regulatory drivers in the area and examines the impact green computing is having on the IT market.

What are the commercial reasons for adopting a green IT policy?

The increased attention consumers are paying to green concerns is one issue. Such concerns are also increasingly important for how the public and private sectors award procurement contracts to suppliers.

The private sector is coming under increasing pressure from customers, shareholders and investors in terms of how they deal with environmental issues. Suppliers are also being compelled to address their own approach on green topics, to help customers deliver on their own environmental objectives.

Providers looking to secure lucrative public sector contracts, for example, have to pay greater attention to how they incorporate the green agenda. Perhaps surprisingly, the public sector leads the way with regards to green procurement standards.

What are the key legal drivers influencing green IT procurement in the public sector?

Put simply, the better your regulatory compliance, the fewer hurdles there will be for your firm to overcome in procuring contracts from the public sector.

A number of public sector initiatives are driving forward the agenda on green public purchasing. At the wider level, the European Union (EU) is committed to raising the level of green public procurement by 2010.

At a domestic level, the UK government has set a goal to be among the EU leaders in sustainable procurement by 2009, and wants to use its spend to reduce environmental impact while demonstrating leadership to others.

The UK government expects suppliers to align themselves with its sustainability strategy. It will increasingly look to vendors to demonstrate an awareness of green issues against specific targets as a requirement of the supply contract.

However, although EU procurement rules increasingly allow sustainability issues to be considered in the decision-making process, taking such concerns into account must not infringe the principles of fair and open competition.

What role can IT directors play in addressing environmental issues?

Now is a good time for CIOs and IT directors to take a lead role in the environmental decision-making process.

The Companies Act 2006 requires a director of a company to act in a way he or she considers would be most likely to promote the success of the company. In so doing, a director must have regard to, among other things, the impact of the company’s operations on the environment.

Through the Companies Act, we are also seeing some interesting developments in annual reporting and the way in which shareholders and investors are putting increasing pressure on companies to address their environmental impact.

In this regard, CIOs and IT directors can make a real difference.

How is legislation seeking to tackle the environmental impacts of IT hardware?

Each year an estimated one million tonnes of waste electrical and electronic equipment (WEEE) are discarded by UK householders and businesses. The disposal of electrical and electronic equipment in landfill sites or through incineration creates environmental problems.

When hardware is disposed of, there is a risk that many of the toxic substances that make up the equipment will escape and cause damage to the environment and human health.

In recognition of this, the EU has introduced legislation that is having a major effect on how WEEE is treated and how products are designed. The legislation comprises:

• European Commission (EC) Directive on Waste Electrical and Electronic Equipment (the WEEE Directive). This has been implemented in the UK by The Waste Electrical and Electronic Equipment Regulations 2006 (the WEEE Regulations).
• EC Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (the RoHS Directive). This has been implemented in the UK by The Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations 2008 (the RoHS Regulations).
• EC Directive on the Eco-Design of Energy-Using Products 2005/32/EC (the EuP Directive). This has been implemented in the UK by The Eco-Design for Energy Using Products Regulations 2007.
  

Other legislation such as waste management controls on WEEE and packaging waste will also have implications for companies.

What are the new controls on waste electrical and electronic equipment?

In terms of addressing WEEE, the premise is those who produce electrical and electronic goods should also be held accountable for their disposal. This means companies manufacturing and importing electrical products will be legally and financially responsible for meeting recycling and other targets set out in the legislation.

Without recycling such equipment, there is a tremendous loss of resource in terms of the metal, plastic and glass components that make up the products, as well as the energy used in production.

The EC is consulting on proposals to revise the WEEE Directive. Options include strengthening collection and recycling targets and extra measures to stimulate re-use and eco-design. The Commission expects to publish proposals to amend the WEEE Directive in autumn 2008.

Producers of equipment for non-household users are required to finance the collection and treatment of WEEE, through the approved producer compliance scheme.

A producer must provide information in the form of manuals on reuse and environmentally sound treatment for each new type of product they put on the market. The information should identify the different components and materials and the location of any dangerous substances in the hardware.

Retailers have the option to offer in-store take back, or to join the collective take-back scheme run by Valpak. In joining Valpak, all WEEE will be sent to the nearest civil amenity sites that have been upgraded to a designated collection facility.

Businesses, as users, will also have specific responsibilities when equipment becomes waste. If the product was acquired before 13 August 2005 and is not being replaced by new equipment performing an equivalent function, it is mandatory that the equipment is disposed of at an authorised treatment facility at the firm’s cost.

There is also an obligation to recycle and reuse as much WEEE as possible, therefore businesses have a duty of care under the WEEE Regulations to make sure waste is disposed of correctly.

From 1 July 2006, the RoHS Regulations banned new products containing more than the permitted levels of specified hazardous substances from entering the market. The RoHS Regulations do not affect the application of existing legal requirements, including safety, the protection of health, transport requirements or provisions on hazardous waste. In other words, existing legislation on electrical equipment and hazardous substances must be complied with.

What are the legal controls which have been introduced concerning energy efficiency?

The objective of the EuP Directive is to bring about improvements in the environmental effects of energy-using products throughout the lifecycle.

Taking into account the urgent need for countries to work towards the Kyoto greenhouse gas emission reduction commitments, increased energy efficiency is considered a priority environmental goal of the EuP Directive.

The Eco-design for Energy-Using Products Regulations makes it an offence to sell products that do not meet specified energy efficiency standards. The maximum fine is £5,000 per item put on the market.

It is anticipated that further “daughter” directives will be introduced for other energy consuming products and the UK government will need to introduce domestic legislation to implement these, although no timetable has yet been announced.

The European Commission has published a draft plan listing the next range of products to be considered under the EuP Directive, including IT servers and data storage equipment. Government will be looking for commitments from manufacturers, retailers and service providers to deliver more efficient goods and services.

The government has published, through its Market Transformation Programme, a series of consultation papers setting out how performance of energy-using products need to improve over the next 10 to 20 years, including proposals for product standards and targets to phase out the least efficient products.

Standards will, for example, guide the commitments government expects from UK businesses and will be updated on an annual basis.

So, what is the way forward for green computing?

The commercial and regulatory compliance drivers outlined above point strongly towards companies having a compelling reason to adopt a green IT policy.

But barriers will need to be overcome. Obstacles include budget allocations, existing procurement agreements, a lack of training on green issues and new legal requirements.

Michael Peeters is a partner and Helen Keele is a senior associate at law firm Pinsent Masons LLP