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An IT Leader’s Guide to Understanding the Business Case for Carbon Credits

Written by Carbon Neutral Technology Corp. | 2-Aug-2024 10:45:47 PM

Let’s see if this sounds familiar: as an IT leader, you manage an increasingly expanding number of IT assets and infrastructure for an increasingly diverse workforce. You’re also cycling through assets at an increasingly rapid pace.  

The reasons for this are sound. By planning for a hardware refresh every three to five years, you can help:  

  • Improve performance and ensure employees have access to reliable, efficient devices.
  • Strengthen security.
  • Ensure compliance and compatibility across new hardware and software. 
  • Even improve ROI by reducing energy use, lowering maintenance and repair costs, and improving total cost of ownership (TCO).  

The stakes don’t end there, though. Your department is also challenged with transforming itself into an “innovation and value-creation center” for the entire business. All this means is that as you move through and manage the lifecycles of IT assets, you have a lot of factors to consider.  

Sustainability may very well be one of them. After all, e-waste is our fastest-growing global waste stream, with the world expected to hit 82 million metric tons of e-waste generation by 2030. Only a small percentage—22.3 percent—of our global e-waste is currently documented, collected, and recycled.  

Not only does the old technology create health, safety, and environmental issues as they sit in landfills—thanks to their chemical makeup—but it’s also simply not a sustainable business model. From start to finish, it’s a rapid cycle of using more and more finite materials. Not to mention, 82.6% of unrecycled e-waste represents $47 billion in lost value from the still usable materials that include cobalt, palladium, and copper.  

What can be done, and how can we ensure we leave behind a better world for future generations? Here’s where you come in as an IT leader.  

Sustainability in IT Asset Management: Going Beyond Recycling 

As you refresh your current hardware and infrastructure, you’re faced with what to do with your end-of-life devices.  

Security is of the utmost importance: it’s critical that as you retire devices, data is destroyed, securely, and there’s a secure chain of custody with documentation.  

Then, there’s compliance. Everything must be handled in accordance with your industry's regulations. 

Finally, given the stark environmental and health consequences of sending IT assets to the landfill, you’d like the devices to be retired in an environmentally sound way. Recycling is the first step, and as we noted before, absolutely a step in the right direction.  

But what if we told you that you can not only get a profitable return on aged technology but also do even more for your organization—and the planet—in terms of sustainability? 

What Do Carbon Credits Have to Do with IT Assets? 

Carbon credits were created as a mechanism to help the world’s nations and companies reduce greenhouse emissions. A carbon credit represents a measurement of reduced carbon emissions achieved by one party, which can be used to compensate (offset) the emissions of another party. Typically, a carbon credit represents the right to emit one ton of CO2 emissions.

Carbon credits can be generated in a few different ways: from reducing emissions, removing pre-existing greenhouse gases in the atmosphere, or avoiding the release of emissions altogether. 

There are also different scopes of greenhouse emissions, as categorized by the Greenhouse Gas Protocol: 

  • Scope 1 GHG: Scope 1 applies to direct emissions from “owned or controlled sources,” including fuel combustion and company vehicles. 
  • Scope 2 GHG: Scope 2 applies to indirect emissions from the “purchase and use of electricity, steam, heat, and cooling.” When your organization uses energy, you don’t always have control over what fuel source it comes from—this mix comes down to the utility company which, while regulated by local and federal agencies, may still generate more energy from its coal plants, for example, than from wind or solar.
  • Scope 3 GHG: Scope 3 applies to all indirect emissions “that occur in the upstream and downstream activities of an organization.” For example, Scope 3 emissions include those generated during company travel, waste disposal, and use of sold products. It also applies to those created in the making of and use of purchased products—including IT assets and infrastructure.  

These emissions are more easily put out of sight and out of mind. While the entire supply chain must take responsibility for each category of emissions, your organization is also responsible as a business citizen.  

We also have a long way to go. To meet aggressive goals set by countries and companies to slow down global warming by 2030. As reported by the IPCC, limiting human-caused greenhouse gas emissions will require net zero CO2 emissions—the primary greenhouse gas—which is created by burning fossil fuels including coal, oil, and gas. Of course, the consequences of not doing so will be significant.  

This is where carbon credits come in.  

How IT Can Impact Your Organization’s Sustainability Strategy 

Within the world of carbon credits, there are compliance credits and there are voluntary credits. These are two very different markets.  

Depending on the industry, volume, and type of pollution, compliance carbon credits apply to companies who have their emissions capped or otherwise regulated by the government in the country they operate in.  

Because the expectation isn’t for these companies to immediately drop their emissions by a large percentage, but to do so in phased approaches, these companies are issued a certain number of credits, or allowances, for emissions. If they have extra, they may sell those to other organizations; if they produce more than their limit, they must buy more credits.  

Voluntary credits, on the other hand, are issued through projects to lower emissions. Third-party validators and regulated exchange platforms help ensure validity within the voluntary carbon credit market.  

For organizations with corporate social responsibility or sustainability goals, voluntary carbon credits can be a valuable part of your company’s strategy to meet emissions reduction and carbon neutrality goals. This is true even if your organization has its emissions regulated.  

This is also where Scope 3 emissions—the category where IT assets fall into—come into play.  

The Business Case for IT-generated Carbon Credits 

The expectation, or responsibility, you have when you retire IT assets is that you will get a valuable ROI and dispose of the assets safely, securely, and sustainably.  

But those assets can also be doing more for your organization, and with that, help move your IT team’s profile forward within the organization by providing value and moving organizational initiatives forward.  

What we understand at Carbon Neutral Technology Corp., is that there is still a lot of value left in your aged equipment. We focus on finding that value and aligning your technology refresh with the principles of the circular economy.  

By collecting, refurbishing, and reselling technology, our program eliminates the need for manufacturing new equipment. Thus, the carbon emissions associated with producing and manufacturing new technology are not incurred. 

As a result, you earn top-value money back for your equipment and self-generate carbon credits for your organization. Depending on where your company is in its sustainability journey, these carbon credits can replace some of the credits your org may be paying for—but either way, it’s creating value and additional cash back towards your financial bottom line, while also delivering wins for people and planet.  

How to Initiate the Carbon Credits Conversation with Your Sustainability Team 

  • Look to examples of what your leadership has said publicly or internally about your company’s carbon reduction goals. You may even be able to find internal or public statements and accounts of your organization’s carbon credits: how many, what type, what category, and where or who they were purchased from. 
  • Note that Carbon Neutral Technology Corp., has worked with environmental organizations to develop our protocol to generate verified carbon credits through the refurbishment and resale of corporate IT assets.  
  • Carbon credits generated through Carbon Neutral Technology Corp., are serialized and registered on internationally recognized CSA’s CleanProjects Registry under ISO 14064 – Part 2 guidelines and principles. 
  • Our carbon credits are developed in North America for use worldwide. By being serialized on an internationally recognized standards registry, our carbon credits are suitable for retirement worldwide. 
  • Once transferred, you have the option to decide if you want to retire the carbon credits immediately and reduce this year’s carbon footprint or hold on to the credits and retire them at a future date of your choosing. Carbon credits will only count towards carbon reductions once they have been retired.  Today, climate change is the top corporate social responsibility issue confronting businesses. Future workforces are demanding businesses be accountable for their environmental impact and integrate sustainable action.  

We’re here to make it easy for you to help move your organization’s sustainable action forward, start moving IT towards the circular economy, and deliver both financial and environmental returns.  

At Carbon Neutral Technology Corp., we are driven by the desire to leave a better world for generations to come. We bring a full-circle approach to your technology lifecycle through secure IT asset disposition (ITAD) and unique financing programs to support new technology acquisition. Our business model balances the often-competing demands of people, profit, and planet. We are sustainability-minded, mission-driven, and value-focused. At CNTC, there are no surprises. We lead with integrity, act with transparency, and believe our work will help create a more sustainable future.