Circularity is at the Core of Lenovo’s Sustainable Business Model

Among the many paths that are driving the journey towards Net Zero, circularity presents a powerful perspective on consumption. At a fundamental level, it challenges and dismantles the constant need for new and more. While several companies in the impact economy are pushing for circularity, how are large corporations embracing the idea?

Claudia Contreras-Gomez, Executive Director, Global Sustainability Services, Lenovo gave us a peek into the organization’s efforts on circularity and sustainable practices. What came out of the discussion is that willingness, determination, consumer education, access and collective action are vital for any organization that wants to bring sustainability and circularity to its core.

Working with Intention

As a technology multinational corporation specializing in personal computers, IT services, software and other devices, Lenovo has embraced a sustainable business model that enables and encourages participation from its channel partners, customers and other stakeholders. “Through the years, Lenovo has been doing quite a bit when it comes to sustainability efforts. On this journey, we have created networks, partnerships and capabilities that we are now enabling for our customers to leverage for their own sustainable journey as well.” Claudia explained.

Lenovo’s focus on sustainability also comes from customer demands. In the last few years, customers have been vocal about business practices that are sustainable and sensitive to the environment. One area where these demands have manifested has been in the disposal of used products. “While we initially felt the interest from customers in Europe, we are seeing an increased demand over sustainable products and practices all over the world.” said Claudia, highlighting the shift in customer behaviour across markets.

Customers are no longer evaluating organizations solely on the products or services delivered but also on how companies recognise the environmental and social challenges, and their responses to them. Claudia asserted that Lenovo’s response was not in creating a standalone vertical that solely focused on sustainability but embedding action across the value chain and beyond.

Circularity in Product Lifecyle

Lenovo has been working extensively to develop a circular roadmap that accounts for product lifecycle from the point of manufacture and sale to return and recycle. This model works in two ways – one, it enables customers to own a product with sustainability embedded in its design and manufacturing. For this purpose, Lenovo is committed to developing products that are energy efficient, repairable and made from recycled materials as much as possible.

The company has established a global environmental management system (EMS) that sets standards and oversees product design, development and manufacturing operations for computer and data center products, mobile and smart devices, and accessories. Under the EMS, the organization builds and manages product lifecycles with a focus on various environmental aspects including the material used, packaging, energy use, site energy consumption, waste management, product transportation, etc.

Two, it brings Lenovo’s networks of partners and other stakeholders to create an ecosystem of capabilities that enable solutions from which customers can choose their degree of participation to champion sustainability. This goes from reducing e-waste, to usage models, to offsetting carbon footprint. Lenovo is also creating impact with their channel community program called Lenovo 360 Circle This community of global partners collaborate to make an industry-level move for adopting more sustainable business practices, particularly in the area of circularity and energy management.

“Our circularity efforts are all about reducing waste and doing everything possible to maximize and extend the device life cycle. The best way to minimize impact is to ensure that the consumption is right sized for what you need, without over provisioning, buying in excess, or worse, leaving devices sitting somewhere idle. At Lenovo, we support and promote TruScale (Lenovo’s as-a-service models) for this purpose. With TruScale we see greatest success managing IT lifecycles both on the data center and the device side,” Claudia summarized.

She further added: “Refurbishing products for reuse continues to be a priority for us which is why we have intensified efforts towards device take-back. E-waste avoidance can be a complex task for our customers to achieve on their own, but our Asset Recovery Services facilitates necessary actions for the process to work securely and seamlessly. An important aspect of this process to consider is timing. Ensuring that an asset is brought back at a point in time where its parts, technology and other items can be leveraged for a potential next cycle at a reasonable cost is critical. The intent is always to ensure that these assets do not end up in a landfill and their resources can continue to be used.”

Given the scope of this process, the geographical diversity of its customers and the catalogue of its devices, Lenovo leverages its network to amplify their reach. It also works extensively with audited, certified downstream partners to responsibly dispose devices which cannot be used. Of all of the devices that are brought back into the system, Lenovo aims to repair at least 76% for use by FY 2025/26.

Reducing Carbon Footprint

Lenovo has ramped up its efforts to cover ground on scope 3 emissions. In line with its commitment to reduce scope 3 greenhouse gas (GHG) emissions, the organization has rolled out a service called Reduced Carbon Transport. As part of it, Lenovo is using Sustainable Aviation Fuel credits (SAF) to deliver customer IT purchases via airfreight, and in return the customers can claim the resulting emissions reduction benefit. Starting 2022, Lenovo has been part of a pilot carbon-neutral air freight program which involves the use of sustainable aviation fuel made of renewable waste and residue raw materials such as cooking oils.

Lenovo offers customers different modes of transport options to deliver their IT purchase. For instance, if a customer were to buy 10,000 devices from Lenovo which involves delivery from China to Frankfurt, the company offers the option to ship the order by sea instead of air. This comes with the disclosure of the additional waiting period that may apply. Another example is when customers choose to have their product received in bulk vs. single packed. This helps reduce packaging waste and optimize pallet utilization.

While making these options available, Lenovo informs customers how each of their choices will impact their IT carbon footprint. For instance, the emissions generated by air freight may be higher (as per above example) than by sea. Based on the choices of a customer, Lenovo calculates the carbon footprint at each level and offers the customer a roadmap to help decarbonize their IT environment.

Processes like these are critical and reiterate the commitment of the organization to sustainability and also educating a customer about how a simple act of ordering a device can contribute to their carbon footprint. Driving home the point for individual and commercial customers can prove beneficial to not only prompt appropriate action in the particular instance but also ignite potential conversations beyond it.

Ellen MacArthur Foundation – a leading research institution on circularity – define the circular economy as “a resilient system that is good for business, people, and the environment.” For Lenovo, circularity as a key feature of the sustainable business model translates into prioritising environmental challenge while ensuring cost benefit. Simultaneously, it gives their customers and other stakeholders opportunities to reduce their own carbon footprint.

However, the extent of these efforts will be limited unless they become standard industry practices. As Claudia emphasized, “We need to prioritise innovation in this area and treat it with a sense of urgency. I hope to see the day when that innovation means industry wide adoption of practices routed on energy efficiency and products that at their core are designed to be sustainable and circular.”