Tackling the Global E-Waste Crisis
From Toxic Trash to Innovative Solutions for Electronic Waste
Key Takeaways
Exposure to the toxic substances that e-waste releases may cause congenital disabilities and other health problems. These hazardous toxins can also contaminate water and food supplies.
E-waste can be recycled profitably in a painstaking, multi-step process. Innovators are finding ways to automate e-waste recycling and reduce its environmental footprint.
Regulations for e-waste recycling are uneven. Some wealthy countries ship e-waste to poorer nations where spotty requirements are often unenforced.
We all end up with old electronics that no longer work or don’t need anymore. We shove them in drawers or let them gather dust for a while, but eventually, we want to get rid of them, which has created a massive problem. While today’s technological advancements offer unparalleled convenience and connectivity in transforming our lives, cast-offs from the digital revolution don’t just disappear — they stick around as electronic waste or e-waste.
We rely on our electronic devices, including smartphones, laptops, household appliances and various gadgets, but discarding them responsibly is a worldwide challenge with far-reaching environmental and social implications. Consider this: Old cell phones contain five toxic substances that can taint the water and get into the food supply.
In this article, we delve into the landscape of e-waste, including its origins and environmental impacts, as well as regulations, recycling strategies and sustainable solutions to address this growing problem.
Electronic Waste Management: A Highly Toxic Problem
“Electronic waste” and “e-waste” describe electronics at the end of their useful lives that are either discarded (ultimately ending up in a landfill) or taken to a recycler. This includes a long list of items we use every day, including computers, microwave ovens, TVs, mobile phones, tablets, smartwatches and printers. Roughly 50 million tons of e-waste are generated globally every year, including about 5 billion mobile phones whose combined weight is greater than the mass of the Empire State Building and heavier than the Great Wall of China.1
E-waste is arguably more dangerous than other types of trash. It contains toxic additives and other hazardous substances, including lead, mercury, arsenic, flame retardants, chlorofluorocarbons and hydrochlorofluorocarbons.2
Inhaling or having direct contact with the toxic chemicals from hazardous e-waste is associated with various health risks. These include the following:
An increase in miscarriages, stillbirths, premature births, low birth weight, genetic mutations, and congenital malformations.
Abnormal thyroid function.
Increased lead levels in the blood.
Decreased lung function.
Neurobehavioral disturbances.
E-waste toxins contaminate the air, soil and groundwater, affecting water sources and food supply chains.3
Navigating E-Waste Regulations
We have known for decades that e-waste presents a thorny set of problems. In 1976, the U.S. Congress passed the Resource Conservation and Recovery Act to set standards for protecting human health and the environment from the potential hazards of waste disposal.
In 1989, an international treaty on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal was adopted to reduce the movement of hazardous waste between nations and prevent developed economies from dumping their hazardous waste in less developed countries.4
In 1991, the first electronic waste recycling system was established in Switzerland to collect refrigerators; other electronic devices were added later. A decade later, the European Union (EU) implemented its Waste Electrical and Electronic Equipment Directive that established e-waste recycling requirements.5
Global Impact of Insufficient E-Waste Recycling
Although 188 countries have ratified the 1989 trans-border hazardous waste disposal treaty, large amounts of e-waste continue to be shipped illegally, typically to less developed countries.6 In the U.S., 28 states and the District of Columbia have e-waste recycling laws. Still, no federal law requires e-waste recycling or forbids e-waste from exportation to developing countries.
Even though e-waste is the fastest-growing portion of the municipal waste stream in the U.S., less than 20% of it is recycled.7 In contrast, the EU’s Restriction of Hazardous Substances Directive requires manufacturers to help pay for e-waste recycling; Europe's e-waste recycling rate is roughly 35%. Electronic waste regulation is either non-existent or not well enforced in many regions of Africa, Latin America and Southeast Asia.
Challenges in E-Waste Recycling
Recycling e-waste properly isn’t easy. The first step requires consumers to actively participate by taking e-waste to designated collection locations or seeking retailers’ take-back programs or on-demand collection services. Mixed e-waste then goes to specialized electronics recyclers, which must be safely stored.
Electronic components must then be disassembled, separated, categorized by material and cleaned. Items are then shredded and sorted using advanced techniques, including magnetic and water separation. Finally, the metals and other materials are prepared for sale and reuse.8 Companies must adhere to health and safety rules and use pollution-control technologies to reduce the health and environmental hazards of handling e-waste.9
Regulators and businesses can encourage e-waste recycling with a “carrot” or “stick.” The New York State Equipment Recycling and Reuse Act requires manufacturers to provide consumers with free and convenient e-waste recycling (the stick approach). In contrast, EcoATM offers a convenient way for people to sell their old cell phones, MP3 players and tablets.
Consumers bring their devices to an EcoATM kiosk, which evaluates their value based on the type, model and condition and pays the customer immediately (the carrot). EcoATM then either resells or recycles these items. India and China are also looking at strategies to encourage e-waste recycling. One approach gives informal recyclers financial incentives to divert e-waste to formal collection or recycling centers.
The Business Side of E-Waste
Of course, the business of recycling e-waste must be economically viable and avoid hurting the environment with its processes. One source estimates that e-waste recycling businesses can generate profit margins of 10%-20%. Recycling is not the only approach to dealing with the growing mountain of e-waste. Innovative researchers in academia and the business community are developing creative ways to reduce e-waste that don’t require us to buy fewer gadgets.
Innovative Approaches to Reducing E-Waste
Chemical engineers at Stanford University are developing the first fully biodegradable electronic circuit that dissolves using slightly acidic natural dyes with a pH 100 times weaker than vinegar. Other innovators seek to pulverize e-waste into nano-dust by cooling the various materials and grinding them into homogonous powders that are easy to reuse. The company Ronin8, which repurposes e-waste to produce metals critical to new technologies, has developed a way to separate metals from non-metals using sonic vibrations and recycled water, minimizing energy and water use.
“Right to Repair” Challenges
In addition to recycling, we could slow the growth of e-waste by repairing the devices and appliances we already have. However, intellectual property (IP) rights that apply to the technologies in these products often prevent consumers or repair shops from opening them up to fix them. To address this, over 40 U.S. states are crafting legislation that would create a “right to repair” by carving out a legal exception to IP laws.
New York became the first state to enact such a law, known as the “Digital Fair Repair Act.” It will require manufacturers to make diagnostic and repair information and parts available to consumers and independent repair shops for most digital electronic equipment on fair and reasonable terms. Notably, manufacturers will be protected, as they will not be required to divulge trade secrets and can’t be held liable for damages to the device caused by the owner or repair shop.
Many argue that companies that manufacture and sell electronics have no incentive to make repairing them easy and cost-effective. Companies would rather have consumers toss old devices and buy new ones. A counterargument is that making repairs easier could be a competitive advantage. If consumers know that Company A makes it easy to repair their products, but Company B doesn’t, we will likely prefer Company A, especially when making expensive purchases.
E-Waste Won’t Go Away on Its Own
E-waste is a massive global problem that poses significant environmental and health risks. With public policy, environmental and economic angles to consider, governments, businesses and individuals all have a stake in finding, developing and implementing effective e-waste management strategies.
Governments can require businesses to share in the cost of recycling e-waste. Companies can help reduce e-waste by incorporating recycling in the product design stage — making recycling a gadget's components easier and more cost-effective. Both can help raise awareness among consumers about the e-waste problem and support innovations that reduce e-waste to help create a more environmentally responsible and sustainable digital future.
Case Study: Apple’s Approach to E-Waste
Lagging on charging cord design: Buying different charging cords for different devices is part of the e-waste problem. In October 2022, the EU passed legislation to require all smartphones, tablets, digital cameras, and other small electronic devices sold in the EU to use USB-C charging cords by the end of 2024.
The law also gives consumers a choice of whether to buy a new cord when buying a new device, and estimates show the new regulation could save almost 1,000 tons of e-waste annually. While Apple was a holdout in adopting the USB-C design, in September 2023, the company released the iPhone 15, which uses USB-C charging instead of its proprietary “lightning cable.”
Leading in other e-waste efforts: Apple runs product take-back and recycling programs in 99% of the countries where it sells its products and recycled more than 40,000 tons of e-waste in 2022. Apple uses robots named Daisy, Dave and Taz to help with its recycling.10
Daisy disassembles batteries from 23 different iPhone models into their components — up to 1.2 million phones per year, or just under 3,300 phones daily.
Dave allows Apple to recover rare earth magnets, tungsten and steel.
Taz, an alternative to the shredder many recyclers use, separates magnets containing rare earth elements from other parts of an iPhone.
As of 2022, over two-thirds of all aluminum, 25% of cobalt, 73% of all rare earths and more than 95% of all tungsten in Apple products are recycled, up from 13% of cobalt and 45% of rare earths in 2021. These efforts reduce the e-waste in landfills and the need for newly mined metals and minerals.11
Authors
Senior Sustainable Research Analyst
Sustainability: It’s in our Genes®
Sustainability isn't just something we practice; it is part of who we are as a company and as global citizens.
Luca Matteucci, “5.3 Billion Cell Phones to Become Waste in 2022,” Phys.org, October 13, 2022; Ellen MacArthur Foundation, “Circular Consumer Electronics: An Initial Exploration,” 2018; Bobby Wallace, “How IT Companies Can Embrace Sustainable E-Waste Practices,” Supply Chain Brain, March 6, 2023.
Mark Weick and Nicole Ray, “How Companies Can Leverage the Circular Economy to Address Global E-Waste,” Ernst & Young Insights, February 20, 2023.
Renee Cho, “What Can We Do About the Growing E-Waste Problem?” Columbia Climate School, Columbia University, August 27, 2018; World Economic Forum, “A New Circular Vision for Electronics: Time for a Global Reboot,” January 2019.
UN Environment Program, “Overview of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal,” accessed December 4, 2023.
Great Lakes Electronics Corp., “What Is E-Waste? Definition and Why It’s Important,” accessed December 4, 2023.
Great Lakes Electronics Corp.
Justin Smith and Lucas Gutterman, “What Is E-Waste?” U.S. PIRG Education Fund, November 6, 2023.
Recycle Track Systems, “The Complete E-Waste Recycling Process,” June 21, 2021.
Cho, “What Can We Do About the Growing E-Waste Problem?”
Apple, 2023 Environmental Progress Report, October 2023.
Marissa Heffernan, “Apple Updates Recycled Metals Goals, Rolls Out Tech,” E-Scrap News, May 10, 2023.
Sustainability focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. There are many different approaches to Sustainability, with motives varying from positive societal impact, to wanting to achieve competitive financial results, or both. Methods of sustainable investing include active share ownership, integration of ESG factors, thematic investing, impact investing and exclusion among others.
Many of American Century's investment strategies incorporate the consideration of environmental, social, and/or governance (ESG) factors into their investment processes in addition to traditional financial analysis. However, when doing so, the portfolio managers may not consider ESG factors with respect to every investment decision and, even when such factors are considered, they may conclude that other attributes of an investment outweigh ESG considerations when making decisions for the portfolio. The consideration of ESG factors may limit the investment opportunities available to a portfolio, and the portfolio may perform differently than those that do not incorporate ESG considerations. ESG data used by the portfolio managers often lacks standardization, consistency, and transparency, and for certain companies such data may not be available, complete, or accurate.
ESG Definitions:
ESG Integrated: An investment strategy that integrates ESG factors aims to make investment decisions through the analysis of ESG factors alongside other financial variables in an effort to deliver superior, long-term, risk-adjusted returns. Therefore, ESG factors may limit the investment opportunities available, and the portfolio may perform differently than those that do not incorporate ESG factors. Portfolio managers have ultimate discretion in how ESG issues may impact a portfolio's holdings, and depending on their analysis, investment decisions may not be affected by ESG factors.
ESG Focused: An investment strategy that focuses on ESG factors seeks to invest, under normal market conditions, in securities that meet certain ESG criteria or standards in an effort to promote sustainable characteristics, in addition to seeking superior, long-term, risk-adjusted returns. This investment focus may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have an ESG investment focus. ESG-focused investment strategies include but are not limited to impact, best-in-class, positive screening, exclusionary, and thematic approaches.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
References to specific securities are for illustrative purposes only and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.