In tech, HP is arguably the Sustainability king. Newsweek ranked them first in 2020, and according to CDP, they hold top marks for climate, forest, water, and supplier sustainability. This week, they intend to hold this lead that announced they would drop their value chain immissions 50% by 2030 and be Net Zero by 2040. I’d typically be leary of any projection that is out longer than the existing executive team, or their initial replacements are likely to be in their jobs. However, HP has maintained this very high sustainability focus over several CEOs, suggesting it has become part of HP’s culture and likely to continue indefinitely.
But while HP leads the tech segment in sustainability, what they are doing is well short of what is needed. Yet, without more government help, it is unlikely for them to exceed what is already the top performance in the segment. Let’s talk about some of the exciting things HP is doing in sustainability and what is needed for the entire industry to do far more.
HP’s Big As A Service Movie
One of the significant issues in the technology segment, and most others, is that sales are generated by churning the installed base. In other words, the firms make more money the earlier you discard your current technology tool and replace it with something new that you might not truly need. To fix this and not significantly reduce your income, a service rather than a product sales approach is needed, and HP has demonstrated this with their “Instant Ink” services which aggressively use ocean-borne plastics and are moving recycling to full cartridge reuse over time.
With services, revenue and profit come from the service and not hardware replacement, and the Printer razor blade/shaver model assists with this. HP, and most printer companies, use a razor/blade model where the printer is sold at or below cost, and profits come from supplies. This sales model removes the motivation for HP to replace existing printers and puts it on customer retention and selling services.
This program also provides for returning and, eventually, when it makes sense, refilling cartridges so that they don’t end up in landfills. The vast majority of HP’s physical waste comes from their printers, and not only have they been very aggressive concerning sustainability with printers, but they also are active in the Trash Free Seas Alliance and are very active with forest regeneration activities consistent with their focus on forest conservation and management.
As HP decouples growth from their products and activities causing carbon emissions, those emissions have moderated. They are transitioning to sustainable materials like recycled plastics, recycled metals, and renewable fiber. Their plan to become net-zero by 2040, which includes their supply chain, is doable. Their aggressive shift to recycled plastics and eventual move to a circular economy is laudable but, given the planetary risk, doesn’t yet go far enough.
Why Government Needs To Step Up
The big problem with sustainability is that the companies that pollute often don’t pay for the pollution they cause. Right now, companies that pollute don’t bear the majority of costs associated with that pollution. If they did, we’d likely have far more companies at or above HP’s level in terms of sustainability. What would also help is significant recurring financial incentives favoring products that could be easily reused.
The move to the Cloud should also reduce the need for complexity at the endpoints and aggregate technology in a more easily updated form in those Cloud platforms. But those platforms need to meet consistent security and sustainability goals themselves; otherwise, we are likely exchanging one problem for another. Providing certifications, incentives, and promoting the cloud providers with the most significant positive impact on sustainability would further promote this effort.
As I write this, the petrochemical industry is talking about shifting their manufacturing capacity from gas to plastics, exchanging one terrible problem for another that is just like a bed. Plastics are currently poisoning our food supplies. And making plastics both cheaper and more plentiful seems incredibly foolish given the known health risks. So Governments need to help drive alternatives to plastics much as they have addressed things like drinking straws and plastic grocery bags.
HP’s Sustainability efforts are impressive, but the efforts don’t yet go as far as needed and won’t until around 2040. To speed up that time frame and bring other companies into the fold, governments need to more effectively charge companies for the pollution they cause and reward companies that have reduced their waste significantly or eliminated it. Taxes, regulations, and incentives have proven effective in changing company behavior in the past and could here if governments rolled out consistent programs so that companies didn’t have to choose between sustainability and profitability. If we want a greener country, we need to make doing green things more profitable otherwise, we are constantly swimming upstream.
Companies like HP have growing numbers of sustainability advocates, and they are often rendered moot because their suggestions could adversely impact the bottom line. But, incentives and penalties could change that dynamic putting those driving sustainability in the driver’s seat where we need them increasingly to be.
Fortunately, customers are increasingly favoring vendors like HP who are aggressive with sustainability. But to get where we need the industry to go, Net-Zero and fully recyclable with circular economies, the government must play its critical part to assure our healthy future and the future of the planet.