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What the drive for sustainability means for IT distributors

Howard Davies, CEO & co-founder of Context, shares his thoughts about what the push towards net zero by vendors means for the channel

We are living through an intense period of global uncertainty. Geopolitical threats, supply chain challenges, war, rising interest rates, mass global health events — navigating a way through this landscape has arguably never been more challenging. But one threat looms larger than perhaps any other: the existential menace of global warming. This has major implications for the IT channel.

As lawmakers, regulators and customers begin to demand more action from the industry, distributors will emerge with a key role to play in driving greater sustainability. They will own both the physical infrastructure and data-driven insight to support greater circularity in supply chains.

Circularity and digital passports

Circularity is not a new concept. But it is an increasingly relevant one when discussing IT supply chains, as sustainability efforts kick up a gear. The idea is to change the way we produce, ship and use products in order to reduce emissions and e-waste. This can be done by repairing, reusing and repurposing these products and/or their internal components.

The EU is leading the circular IT revolution through its CIRPASS initiative, which itself will lay the groundwork for a new Digital Product Passport (DPP) scheme. DPPs will in time help to accelerate the transition to a circular economy and carbon neutrality, while empowering consumers to make more sustainable choices about the IT products they buy. It will do so by creating an information system for supply chain stakeholders to share critical information with each other and regulators.

The key events in the life of each product will be captured via a distributed semantic web database. The good news is that the semantic web stack already comes with most of the necessary and mature tools to link data and metadata—including access and usage control, verification, and data ingestion, manipulation and exploitation.

An AI revolution

This is where AI will undoubtedly play a defining role. By applying machine learning algorithms, organisations will be able to extract insight from historical data to optimise sustainability processes in circular supply chains. In fact, global organisations are predicted to spend billions on AI software to achieve environmental, social and corporate governance (ESG) goals by 2027. Such models will soon pay for themselves—not only in supporting DPP compliance and the journey to more sustainable business models, but driving greater supply chain efficiency and profitability in general.

One company already leading by example on this is Google, which has partnered with prominent circular economy organisation the Ellen MacArthur Foundation for several years to enhance reuse, refurbishment and recycling in its datacentres. As of 2022, seven of 23 Google datacentres reportedly achieved their zero-waste goals, and the firm is said to have resold over 30 million hardware components into the secondary market since 2015.

The impact of distributors

Given that they play a critical role in the IT channel, distributors can also expect to be key stakeholders in the new circular IT economy. So how will the changes above impact the sector? We can point to five predictions:

  1. Vendors will take over direct control of the “second life” market for reused products
  2. Distributors will provide essential infrastructure for physical circularity
  3. Distributors will provide centralised API management for circularity reporting
  4. Distributors should have the best training data for sustainability and supply chain insight
  5. Vendors will want those AI-generated insights

This opens up significant opportunities for distributors with the physical and digital resources to make circular IT supply chains a reality.

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