ATI Home / Insights / E-waste: a growing problem with investment opportunities


Investment insights, news and videos
E-waste: a growing problem with investment opportunities

Mike Appleby discusses the investment opportunities we see in companies providing solutions to the growing problem of electronic waste (e-waste) and how we as investors can help to combat it.

Most of you will own at least one if not several personal electronic goods, be it a phone, a laptop, a tablet or a TV and most people will also upgrade their goods on a regular basis as they tend to become quickly obsolete, in some cases, in only a matter of months. But what happens to these unwanted goods, which become known as electronic waste (e-waste) and where do they end up?

ATI teamed up with Edward Scott-Clarke to produce a documentary film called “E-Life”, which I urge you to watch and it explores these questions and how we as investors are looking to combat them.

Driven by our consumer lifestyles, the amount of e-waste produced is growing at a rapid pace and every year huge quantities of electronic waste, (e-waste) is being illegally dumped in developing countries. Unlike our society who is quick to throw away old or dysfunctional goods, workers in these countries look to mend and recycle as much as they possibly can in order to make money, but with little regulation or safety around their methods there are hugely negative environmental and health impacts.

E-waste contains highly toxic heavy metals which these people are exposed to on a daily basis; this, combined with burning the unwanted plastic is poisoning workers as well as the people living in and around these enormous e-waste dumps in many developing countries.

In order to combat this growing problem we need solution providers and this is where we see huge potential for investors.

This throw away culture needs to change and products need to be designed to be attractive and easy to use but also:

  • Easy to maintain and repair in order to increase their useful life.
  • Easy to dispose and recycle the raw materials use to make them.

By designing products which take into account the whole lifecycle, including the end of life would potentially reduce the pace at which e-waste is accumulating as well as provide a meaningfully safer way of reusing our finite resources. Despite a number of initiatives this clearly isn’t happening enough.

However there are companies doing just that. One of these is Fairphone, an innovative company based in Holland. Fairphone designs mobile phones in a modular manner that enables you to very easily repair and upgrade all the components (such as the camera, or the moving parts that fail first) in order to increase their product life.

Unfortunately, Fairphone shares are not listed on a stock exchange - so we aren’t able to invest in it. However most of the manufacturers and sellers of personal electronic goods are listed and as producers of these products, they should ultimately be responsible for their disposal. It is not OK for these global brands to suggest the disposal of their products is somehow not their problem.

As investors, we can encourage these businesses to improve how they make their products to incorporate better maintenance and upgrading, as well as making it much easier to reuse or recycle the components at the end of their useful life. In addition, they should be looking for innovative ways to re-use and recycle their products and also to implement safer disposal. After all, they produced this toxic junk and it has their name on it - literally.

There are listed waste management companies that pick up, sort, recycle and dispose of general waste, such as, Viridor (part of Pennon Water), Biffa, China Everbright International, et al - but this isn’t e-waste focused. They legitimately manage waste streams, mostly in developed markets. But, regulated disposal is not in itself a guarantee that this e-waste doesn’t go on to be illegally exported to developing countries (where it costs less to dispose of). It is worth challenging these waste companies to commit to not (illegally) exporting e-waste to developing countries and ensure this is enforced throughout their supply chain.

This issue is an important reminder to investors that there are lots of unsavoury things that theoretically can’t happen; because, for example it’s illegal; but in reality are happening – in supply chains or with goods made by companies we might be invested in. As a proactive investor, you should be challenging the management teams of the companies you are invested in, that are making electronic goods to get on top of this. Reactive investors will do nothing.

Examples of stocks are provided for general information only to demonstrate our investment philosophy.  It is not a recommendation to buy or sell and the view of the Investment Manager may have changed.


Leave a comment

Recent insights

An impact beyond their size

Peter Michaelis, Head of Investment looks at our Sustainable Future UK Growth fund and the impact of the smaller stocks, which make up the portfolio. [...]

E-commerce: separating the winners from the losers

Martyn Jones, Investment Analyst, talks about the disruptive force in retailing - e-commerce, which we believe will be a key determinant of success in the future – separating the winners from the losers in an increasingly competitive environment. [...]

Fund in focus: Alliance Trust Sustainable Future Corporate Bond Fund

Kenny Watson, Investment Manager, talks about how he delivers strong returns for investors, with his sustainability-focused corporate bond fund. [...]

Growth trends for 2017 and beyond

Peter Michaelis, Head of Investment looks at where we see growth trends for 2017 and beyond. These include areas such as medical innovation, transition to lower carbon fuels and the healthy food sector. [...]

Important information

Material on this site is copyright © Alliance Trust or is published by permission or licence of the copyright owner.

Visitors may not copy, distribute, sell, publish, display, transmit, reproduce or decompile any part of the material by any means (electronic or not) or for any purpose include it in any derivative works without the permission of Alliance Trust.

Any information provided by MSCI is subject to disclaimers. For full information please see our Terms of Use.

Alliance Trust Investments Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC330862, registered office, 8 West Marketgait, Dundee DD1 1QN; is authorised and regulated by the Financial Conduct Authority, firm reference number 479764. Alliance Trust Investments gives no financial or investment advice.