Today’s circularity agenda includes environmental sustainability factors such as climate and resource consumption. Stephen Fuller, expert in supply chain management at TCO Development, argues that social issues must also be included — and that human and worker rights can actually be used as levers to accelerate our transition to a circular economy.

By: Stephen Fuller, Senior Criteria Manager, supply chain and chemical management, TCO Development.

“The electronic devices we purchase are the result of a manufacturing process through a complex supply chain. From the miners that dig up the minerals used in electronic components all the way to the final assembled product, there are thousands of workers involved in a device’s production. Compared to other product supply chains such as textiles, the multi-tiered supply chain of the IT industry dwarfs all others and should realistically make these products very expensive and valuable to us. A major reason why their price and value remains low is that these complex supply chains make it difficult to manage human rights risks and they contain a high concentration of cheap labor. So it is perhaps unsurprising that the majority of the world’s IT production takes place in the developing world. There, local governments are known to ignore human rights and established labor laws to stimulate business investment. The electronic devices we buy remain cheap as long as we accept that the abuses of human rights, working conditions, labor rights and social benefits the workers endure to make them can continue.

If we want a circular economy, we must consider social responsibility. In fact, treating workers in the IT industry fairly can help speed up the transition to the circular economy. In meetings with IT product manufacturers, I’ve often heard that investing in social improvements to meet the criteria in TCO Certified results in an increase in production costs and a reduction in revenue. It’s not surprising — giving workers a reasonable salary and social benefits will of course increase the cost of manufacturing. However, it is the only reasonable way to go, and apart from the fact that respecting workers’ rights promotes a healthier working environment, it will also make the circular take-make-use-reuse economy all the more possible.

Why? Because higher production costs will mean higher purchasing prices, and that is the single most effective way of driving the development of longer lasting products that users want to keep, service, and repair rather than dispose of and replace.

More expensive IT devices will also be an incentive for IT brands to give more room to circular business models, for instance product-as-a-service solutions where the IT brand retains ownership of the product and the user pays for the function and value it can offer during a set time period. Suddenly, revenue generation is not exclusively linked to selling as many products as possible. Instead, it makes business sense to manufacture durable IT devices that are designed for a long life, and that can be repaired and upgraded so that each product can be leased for as long as technically possible. This is of course a dream scenario for anyone who wants to realize the circular economy.

“If we are prepared to pay the true environmental and social costs of our IT use, the circular transition can be made in a way that benefits everyone.”

So, if social responsibility in the IT product supply chain can lead to worker well-being, environmental stability, and create new job opportunities connected to circularity, wh