Responsible Investment Officer - ACTIAM
The corona crisis has been most profitable for Apple. In January, the tech company acquired a market value of USD 3 trillion, the first company ever to do so. Since the start of the corona crisis alone, Apple has gained 200 per cent in value on the stock exchange. Its record value on the stock exchange is due, in part, to the continuing growth of sales of the iPhone, iPad, Mac and the Apple Store.
The stock market value does however have a downside. In 2020, Apple was responsible for the emission of 22.6 billion tonnes of CO2, equivalent more or less to the emissions of countries like Cuba and Angola. In 2020, the company therefore announced its intention to reduce emissions to zero by 2030. It is taking all kinds of steps and introducing innovations to work towards a climate-neutral model.
Given that Apple's own factories and buildings are already running on renewable energy, the key to achieving its reduction goals lies with suppliers and users. Because most of the emissions are generated by the production of its devices, Apple is keen for its major suppliers to switch to renewable energy by 2030.
By doing so, Apple appears to take a leading role in the fight against climate change. The problem, however, Is that the company is responsible for a large part of the world's fastest growing waste stream, i.e. electronic waste (e-waste). It has become increasingly difficult to repair or upgrade Apple's most recent devices. Their lifespan is therefore far shorter than necessary, the result being that the iPhone has become one of the least reparable devices in the world. France has even imposed a colossal fine on Apple for deliberately making older iPhones slower through software updates.
“The negative impact of such 'disposable' devices on society and the environment is often invisible, however.”
And the iPhone is not the only product that is raising questions. AirPods, the popular wireless ear buds, are also being criticised. Their global environmental impact is huge and they run counter to Apple's intention to fight planetary exhaustion. The lifespan of the earbuds is usually only about 18 months. They cannot be repaired or recycled (because the parts are all glued together) and they contain valuable minerals and flammable substances (which means it is irresponsible to throw them away).
The negative impact of such 'disposable' devices on society and the environment is often invisible, however. The European Environmental Bureau has calculated that up to 75 per cent of smartphone emissions occurs during their production. The fact is that a lot of energy is needed to produce smartphones, whereas they have a short lifespan. In the Netherlands their average lifespan is only two and a half years.
And on top of that,a smartphone contains more than 60 valuable metals, such as gold and cobalt. Every year, the smartphone industry consumes 335 tonnes of gold. As a result, the production of smartphones is one of the main culprits of the deforestation of the Amazon. The process of extracting minerals moreover generates mercury and cyanide waste, which pollutes river systems and drinking water. This kind of industrial activity is a global problem that affects both people and ecosystems.
Even after a productive life, many of the phones end up on landfill sites where toxic metals cause pollution of the groundwater, among other things. It is estimated that fewer than 15% of smartphones are being recycled in developed countries. Some companies, such as the Dutch Fairphone, offer discounts on the purchase of new phones if customers agree to recycle their old ones. The components of the devices are however so tiny and closely integrated that recycling efficiency is barely 30%.
Apple is focusing its efforts on recycling but this only resolves part of the negative impact, which is moreover eliminated by growing sales figures. What would remain of Apple's stock market value if it had to pay for the damage it is causing the earth and society? And should investors take this into account, given that lawmakers are increasingly taking note of this negative impact?