UK Stock Story – Blancco

The comedian Michael McIntyre once told a brilliant anecdote about The Man Drawer; that drawer at home where people like me keep dead batteries, rubber bands, a key to the side gate at your old house and maybe a Nokia 3210 mobile phone. I’m probably not the only one with a couple of old phones and a defunct laptop knocking around the house.  

On top of this, there will be many organisations both in Britain and across the world who responded to the pandemic and “Work from Home” diktats by radically changing their IT set ups, “retiring” lots of old kit along the way. According to the UN Global E-Waste Monitor[1] ; in 2019 (pre-Covid), a record 53.6 million metric tonnes (Mt) of electronic waste was generated worldwide in 2019, up by 21% in just five years. This report also predicts global e-waste – discarded products which have a battery or plug – will reach 74 Mt by 2030, almost a doubling of the amount of e-waste in just sixteen years. I suspect that, post-Covid, this is an under-estimate. This makes e-waste the world’s fastest-growing domestic waste stream, fueled mainly by higher consumption rates of electric and electronic equipment, short life cycles and few options for repair. Only 17% per cent of 2019’s e-waste was collected and recycled. This means that gold, silver, copper, platinum and other high-value, recoverable materials conservatively valued at US $57 billion – a sum greater than the Gross Domestic Product of many countries – were mostly dumped or burned rather than being collected for treatment and reuse[2].

Unfortunately, businesses contribute to this problem, as old devices are often physically destroyed to prevent sensitive data from being recovered and used for malicious purposes.

But what can we do with this so-called e-waste? The best idea is to try and recycle it, perhaps via a trade in, which many people do with mobile phones. But what about laptops or that clunky old desktop PC you haven’t used for years? They’re harder to dispose of – and that’s just domestic e-waste. Think about all the old kit being thrown out by businesses, schools, councils and governments. Business and industrial e-waste is a problem many times the size of the domestic issue.

At a Castlefield online event last summer, we discussed this situation with Ed Scott-Clarke, the director of “E-life”, a film which looked at the consequences for the people of Ghana of their country taking in and dealing with mountains of other peoples’ discarded tech[3]. The United Nations telecoms agency ITU has set a target to increase e-waste recycling to 30% by 2023[4] – a vital goal as toxic substances such as mercury and BFR (brominated flame retardant) are found in many types of electronics and pose severe risk to human health. 

There are two sustainability issues at work here. The first issue is an environmental one. Computers, cables, phones and other electronic devices contain small amounts of a large number of chemicals and metals which should be safely recovered and recycled wherever possible, because these materials are valuable and/or environmentally damaging. They include lead, copper, lithium, hexavalent chromium and bromine. Hexavalent chromium is linked with cancer, for example. Lead causes irreversible damage to developing fetuses and children and can contaminate water supplies and harm plants and animals[5]. However, as devices get smaller, extracting these materials becomes harder.

The second point is that much of this equipment is still perfectly serviceable and doesn’t need to be thrown away or sent several thousand miles to countries like Ghana to be smashed up and stripped down. Most of this kit can be repurposed for the secondhand market, either re-sold or donated. The reasons why organisations and individuals seem reluctant to do this is because, in these days of heightened data protection and cybercrime, they’re concerned that their files might fall into the wrong hands, so they’d rather have someone destroy the hard drive than re-use or donate the equipment. Also, in an organisation, it is often the case that nobody “owns” the problem of what to do with old tech[6]. 

Clearly, recycling is the better option all round and this is where Blancco Technology Group PLC comes in. Blancco is the industry standard in data erasure and mobile device diagnostics software, and we invest in it through our CFP Castlefield B.E.S.T Sustainable UK Smaller Companies Fund. The company provides mobile device diagnostics and secure data erasure management; its services include data erasure management, live environment erasure, high volume erasure, fault diagnostics and repairs. The company addresses three main markets:

1. Certified data erasure and migration for both active networks and end-of-life devices. This helps ensure data protection compliance.
2. Diagnostics and erasure. Sometimes used in buybacks and trade-ins of mobile phones.
3. ITAD or IT Asset Disposal. Larger scale diagnostics and asset erasure. This enables customers to re-sell their old IT kit.  

In its 2021 financial year, Blancco’s software helped to erase 54 million devices[7], thereby making them safe to reuse or recycle in compliance with the highest standards of data security. As the mountains of e-waste grow by the day, we’re reassured that we support a company which is playing its part in helping to support the circular economy by saving electronic devices from the toxic tech graveyard.

As well as meeting this clear environmental need, we’re impressed by other aspects of Blancco’s approach to sustainability. In 2021, Blancco partnered with WANdisco PLC on their “Laptops for Kids” campaign, sourcing and donating 14,000 devices to schools across the North of England[8]. Along with other accreditations, the company holds the London Stock Exchange’s new Green Economy Mark, a recognition given to companies that generate between 50 and 100 percent of annual revenues from products and services that contribute to the green economy. This provides us with the extra reassurance that Blancco is a good corporate citizen as well as a great investment for us.

Written by David Gorman

Information is accurate as at 15.02.2022. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.

[1] https://ewastemonitor.info/gem-2020/

[2] As above

[3] https://www.castlefield.com/news-media/company-news/e-life-film-now-available-to-a-wider-audience/ 

[4] https://www.itu.int/en/mediacentre/backgrounders/Pages/e-waste.aspx#:~:text=By%20adopting%20the%20Connect%202030,e%2Dwaste%20by%2050%25..aspx

[5] https://www.greenbiz.com/article/how-hp-and-dell-are-reducing-toxics-their-electronics

[6] Document available to download https://www.blancco.com/resources/rs-the-rising-tide-of-e-waste/#

[7] https://www.blancco.com/wp-content/uploads/2021/10/blancco-ESG-report-2021.pdf page 7

[8] https://www.blancco.com/wp-content/uploads/2021/10/blancco-ESG-report-2021.pdf Page 15