SEE THE SHOW NOTES AND LISTEN AT: Circular IT and Closing the Loop with Joost De Kluijver

Katie Whalen [00:00:00] Hi, I'm Katie Whalen and join me each week as I talk with experts around the globe about Circular economy. You'll find out what's being done to make it a reality, and if it can really solve the problems it promises. It's time for Getting in the Loop.

[00:00:15] Hi and welcome to Getting in the Loop. I'm Katie. And today, I'm talking with Joost De Kluijver about circular I.T. Joost is founder and CEO of the Social Enterprise Closing the Loop, which has developed a service that delivers on the growing demand for circular I.T. Prior to founding Closing the Loop, Joost worked for Accenture and the Global Reporting Initiative. In this episode, you will learn about the work that Joost and his organization in Closing the Loop is doing to enable proper collection and recycling of African waste and find out how their service provides a solution for the growing demand for circular procurement of I.T. in Europe. Resources and links discussed in this episode can be found at gettinginthelooppodcast.com. Before we head into today's episode, I want to give a big thank you to those of you who have left a review on our iTunes page. And I'd like to encourage those of you who haven't yet done so, to do the same, to make it even better. I've teamed up again with Cathrine Weetman from Episode Eight for another giveaway of her book, Circular Economy A Handbook for Business and Supply Chains. All You Need to do for the chance to win a copy of Catherine's book is to leave a review of the Getting in the Loop Podcast on our tunes page before September 4, 2019. Listeners who have already left reviews will automatically be considered. For more information on how to leave a review, head over to the show notes of this episode on our website at gettinginthelooppodcast.com. Okay, looking forward to seeing your reviews. And now onto today's show.

[00:01:50] Thank you so much, Joost, for coming on the Getting in the Loop Podcast today. To start us off how about you tell us a little bit where you're calling from.

Joost De Kluijver [00:01:59] Sure. So this is a call coming in from Amsterdam, beautiful city of Amsterdam in the Netherlands, where I've been living actually for much too long, almost 20 years.

Katie Whalen [00:02:09] Wow. Yeah. I lived in Amsterdam for maybe like 2 percent of that time. So you are the founder of Closing the Loop and could you explain to my listeners what Closing the Loop is?

Joost De Kluijver [00:02:24] Sure. So Closing the Loop is a company, a social enterprise, as it's called, that makes the usage of mobile phones more sustainable. We're actually Circular, the activity of my business is of scrap collection and then of course, presumably mobile phones that at some point turn into a scrap, which is definitely a topic that's important across the globe. But we focus on the emerging markets. So what we do is we collect end of life mobile phones in African countries. And that is an activity that we actually turned into a service. So we're sort of a service provider that allows for circularity in the telecom industry.

Katie Whalen [00:03:06] Okay, so maybe you could explain a little bit how this service works like in terms of your customers are, who are you doing the service for?

Joost De Kluijver [00:03:17] Sure. So the basic idea of the circular service is called next, the name is the one for one. And the idea behind this is when you buy a new phone, it would be great if at the same time one scrap phone is being collected and recycled. So it's based on something which I think a lot of people use quite often EPR schemes, but these schemes quite often do not exist in the emerging world. And in the developed world. So, for example, Europe, they do exist, but then they will have a bit of a limitation because they just make sure that one country becomes cleaner, especially mobile phones are not products that are bound to country borders.

[00:04:09] So what we feel is much more smart than fair use circular to do that. When you buy one phone that's new, for example, in Sweden or the Midlands. You make sure that also one script long is collected and you do this in a in a place where it's really needed. So we offset new phones by linking the purchase or to sales of a new phone. Let's say Europe buy the collection of a scrap from an African country.

Katie Whalen [00:04:37] Okay, so a little bit kind of like carbon offsets. I guess we've had some other person on the podcast who was working with like sort of recycling this idea of, you know, kind of the same idea, I guess. I'm curious, how did you. Were you inspired with by this idea of offsetting with the wood? Were you inspired with this idea of offsetting to create your company?

Joost De Kluijver [00:05:03] Sure. So definitely, if you look at offsetting, it's something that a lot of organizations already do. Most consumers are aware of and there are so few examples that it actually works. Although there are some limitations to the concept, especially of carbon offsetting. I would say mainly because it's quite complex and also because it's something that it's not really tangible sort of. Let's say the basic idea behind all shipping appeals to me definitely, because I think it's great that if you have a bit of a negative impact, it's stimulating to see that you can offset the negative impact and do something positive to make up for, let's say, your negativity. But at the same time, if it becomes complex, if you can really see what's happening, then it becomes a bit less appealing to me. So reuse the basic idea behind this offsetting concept, but then made it much more tangible, made it standing. And I would say also quite more appealing. On the one hand, by looking at mobile phones, which is really a product that people can relate to, but also by offsetting materials instead of carbon. So if you offset gold, silver, copper, et cetera, that's much more tangible, much more understandable that the resources that you use at the same time can then be offset by having those same resources extracted from waste and then made available again for a variety of products. Some offsetting doesn't make sense, but it could add a bit of that. It could use a bit of ten's ability and also some appeal. So that's what we're trying to do.

Katie Whalen [00:06:51] So if I'm hearing you correctly, it's about trying to implement and initiate recycling initiatives in countries that don't have that so much either, because you're talking about how you're looking at collecting or maybe it's about collection of mobile phones in Africa. Maybe you could expand on how kind of how it kind of works, like is there collection happening, where is that happening and is the recycling happening in and where is that happening?

Joost De Kluijver [00:07:17] Sure. So actually, if you would see our business as customer driven, we're actually trying to deliver value to two customer groups. One is a phone user in the emerging markets. We've collected scrap phones in five countries in Africa, including Ghana and Uganda, Rwanda. And they're the that's a problem that we're solving is quite simple. Electronic waste is quite often ending up in the wrong hands or being dumped, etc. So we'd be much better if that doesn't happen. If you turn this waste into metals and actually pay people for the waste so it becomes income. So that's one side of our business. The other that's a challenge or issue that we see that a lot of people, especially in Europe, are quite keen on the devices, that they might be quite happy to use them and sometimes buy them a little bit too fast. You might say, are these replace them too fast. So that purchase the consumption process, it could use a little bit more circularity. So we offer that customer group a way to make their usage of mobile phones more sustainable. And that's actually the combination of of our business on one hand, indeed, offering recycling service in African countries, but at the same time offering a circular service to European customers. And those two actually go to get a quite well result and very appealing service. And of course, the practical implementation of sustainable development goal number 12, which is sustainable consumption for mobile phones.

Katie Whalen [00:09:10] And in terms of your services and customers in Europe who are using your services, I think you have- You have an exciting- Something happened recently in the Netherlands that in terms of using your services in a customer who has adopted your services.

Joost De Kluijver [00:09:30] Sure. So I did looking at the circular service. This is something that consumers can use. It's not our focus yet to read directly talked to consumers, because I know we're a very small company. So our local focus of first was B2B. So we're offering this service to companies like Accenture in G banks, but also some municipalities like the city of Amsterdam. So end users, if you will, organization that buy phones and want to make that purchase circuit or more green. But, you know, this is something that we as a service develop ourselves. So a key opportunity or focus for us in the last two years was making this much more of a normal thing to do. And because of that, they're making it also interesting for the telecom industry itself to come on board, because a lot of customers, buyers of phones want to do green procurement or certain procurement, that it would be more logical if a provider or an operator or phone brand would also come on board and start offering this service. So that happened last year, the first telecom brand to T-Mobile, which is the Dutch brand of Deutsche Telekom, is now offering our service to their customers, allowing T-Mobile customers in millions to buy phones and then directly also offset the impact that it creates. And as of July, we're also working with some SME, which is, of course, the biggest rent in the world. So that's a huge step for us as a small company and hopefully a big step towards, again, making circular procurement more of a norm, which I feel would kind of very much be called a telecom industry. We're already doing great things as to come as an industry, creating great services for customers. So I think it's only logical that the service such as saleable use uses or serve your purchase of a phone also is added to that to make the industry more proud of the product that we're producing.

Katie Whalen [00:11:56] Wow. Well, congratulations. That's really exciting. And a step in sort of the correct direction for procurement and in trying to go secular and design in the I.T. sector. I'm thinking. So how does this service work for the customer? Do they receive some sort of guarantee or some sort of certification? How do they how do they know they tangibly what's actually happening down down the line?

Joost De Kluijver [00:12:23] Sure. So for us, it's it's important indeed to at least show how our approach works. So our supply chain, how do we collect? How do we work with local partners? I just spend a little bit there. We work with informal networks, mainly collecting scrap phones from repair shops or through schools, churches, individuals, waste pickers, etc. So that can be quite difficult to make transparent such as supply chain because it's again, quite informal. But we've developed in less than half a year is a supply chain tracking tool, which actually shows how our supply chain works. Again, with the local partners or country and their networks or collection network work, where we register, where we've connected phones was done so and how many phones are now available per country and that is output that can be audited and that is, of course, upwards. That's quite relevant for any of our customers. So that indeed can see that the phones that they are all setting are actually being offset by the collection of scrap phones in, let's say, Uganda or Zambia. So that's a tool that the Chamberlains developed for us. And they are quite active in the supply chain trucking business, doing work also for the Rainforest Alliance, for example.

Katie Whalen [00:13:54] Oh, yeah. Okay. I imagine that this has taken a lot sort of to setup. Maybe you could reflect a little bit on the process of making it a reality. So far, like one or two tangible challenges that you that you've encountered in your journey so far.

Joost De Kluijver [00:14:11] Sure doesn't have to limit the challenges. If I can only use one or two, you can imagine-.

Katie Whalen [00:14:16] You can do more.

Joost De Kluijver [00:14:19] I mean, I mean, it's it's a lot of fun to work in African countries, but there is a huge amount of unpredictability. There's a complete lack of legislation, which, of course, also is the basis for our work. But still, it can make it quite challenging to, for example, get a permit to export electronic waste or even to collect it locally. So you can imagine if we work in a country like Uganda where we pass after having collected this from foreign waste to the local legislator, if we could export it, it took some time to find out who was responsible. From a legal point of view, which the government department and they said, well, it's definitely possible. But then you have some first set up an NGO or a foundation, and that will be the legal entity that you can get a permit for. So we did so. And then two months later, we came back and they said, well, actually we meant a commercial entity. You have to set up a commercial entity and then you can get a permit to export. So we did so. And then two months later, they said, well, actually, we're not allowing you to export electronic waste from Uganda. So to give a bit of an idea, unpredictability, but also, you know, the fact that we're the first ones doing this makes it extremely difficult to have any certainty that you are actually able to export when at what cost structure. So that's also a big reason for us to focus on the commercial part of our business. Just collecting scrap and recycling it and then getting paid for the material value simply isn't enough because of the complex countries where we work.

[00:16:11] But it's also it was turned out to be a huge value to offer this collection as a service again to European customers. So on the one hand, it allows us to become profitable to get a business model. But actually it had a much bigger impact because now we're not just doing this and creating IP that, you know, less waste is being produced across the globe. But also we're seeing that the telecom industry actually embraces this concept much more because it's not centered on something that's negative. And it's not only about responsibility and that you have to be circular because otherwise you get a fine or anything. But because I see that if you implement this in the right way and if you promote it in the right way to your customers, you can create a lot of value. Mark, it's a branding ET of course, but also the real seals because a lot of customers are asking for more green procurement even when they buy electronics.

[00:17:10] So that really delivered a lot of value for us. And new insights. That circularity is a great thing. But if you add positivity to that concept, it opens a lot more doors than just looking at it from a legal perspective.

Katie Whalen [00:17:28] Okay. So you collect the e-waste in Africa and then you transport it back to Europe to then do like the proper recycling, if I'm hearing you correctly.

Joost De Kluijver [00:17:40] Yeah, that's correct. In Africa, unfortunately, the whole of the continent doesn't facilitate proper that's going to waste recycling. So you see a lot of recycling taking place in informal markets. But you can imagine that's not the type of recycling we want. So using mercury without any safety precaution, burning electronics and open air, it's a fossil. What we're seeing, unfortunately, still is a reality that you can recycle electronics very well in Europe, in the US, in Japan, Australia.

[00:18:19] But if you look at Africa, there is a single facility facility. So we have to export this waste out of a continent that produces electronic waste by the hundreds of millions of euros per year. So that's that's that's quite ridiculous. But unfortunately, at least for the short term, the reality is there.

Katie Whalen [00:18:41] Do you have any plans maybe with closing the loop or of other initiatives and organizations that you know of that are trying to implement, you know, recycling facilities within within Africa and trying to get their. Systems are as good as the U.S., the U.S. or Europe or Japan.

Joost De Kluijver [00:19:01] Sure. Probably actually better because what we've built in Europe and other developed countries is often technology that we created, let's say 10, 15 years ago. So Africa has taken a great position to implement circularity in the most advanced form. It also needs to take a leap because if we invest the amount of money that was needed to build these, let's say, older lands, that will not happen.

Katie Whalen [00:19:33] But if you were seeing some of the newer developments, smaller skill at lower cost and also had a lower environmental impact that are now coming to market for U.S. recycling. We very much feel that that's a solution that could be implemented in African markets. And of course, also something were active. But at the same time, when you're not collecting enough electronic waste legally and also making sure that you do properly recycling. And if you don't have, let's say, a bit more longer term legal frameworks in place, legislation, settlement, that you'll maybe be able to build a small plant.

[00:20:18] I keep it running for a bit, but it will not be a structural solution. So what we feel is needed is clearly more collection sort of over working on really a business model, of course. Because of the cost of collecting currently in African markets, but also the link to the big more top down approaches of multinational organizations or governments or U.N., et cetera, that are not often talking about the final solution.

[00:20:50] But if you want to build the final solution, which is need huge plans now, it will be bankrupt in two years time. So we feel that bringing those two together, our practical bottom up approach of actually collecting, actually making some money and then hopefully scaling up that you can do this in a larger scale on one hand and then at the same time bringing in the big donors and large organizations that can build larger recycling facilities. At some point, those two will connect. And that's really the solution that we feel to be working on because we need to be lot more creative than with what's happened in European markets around U.S. recycling.

Katie Whalen [00:21:40] That's a good point that you bring up in terms of thinking that they could just leapfrog and have the best technology possible, actually make a drastic steps. But I do see what you say in terms of challenges is also one of the challenges that I've been encountering, too, in terms of supply and collection. And and making the business case for that can be difficult because of the unknowns and the long term forecasting and is a bit of a tricky. I've been reflecting when you've been speaking, it's it's a bit of a tricky situation as well, I guess, because you want to have you want to make sure proper is proper recycling and proper collection in African countries.

Katie Whalen [00:22:20] But then also, yeah, I'm trying to think of like some I guess it's not as unavoidable that sometimes are you know what, our old electronics are sent there as well because then they are used in Africa and you know, on the second hand market. So it's not exactly like we're just sending our E waste there as E waste, but they actually are are using it. Do you do you see other kind of common? Like, do you have thoughts about this? Are common kind of misconceptions about how people view, you know, electronics in Europe versus in Africa?

Joost De Kluijver [00:22:55] Sure. Well, I mean, one of the things that we see that indeed the waste shipments are often being framed as problematic And of course, there is a lot of things going on. No, not in the way that we would wanted. But when you look at mobile phones, these products can and should be used for many years to use device, that is. And unfortunately, it doesn't it doesn't happen that much yet. The European market. So when the phone becomes redundant in Europe, I think it's much better to make sure that it's still being used for a few years in an African country than it would be recycled to Europe. But of course, it would be even better if that product and end of life is also collected in the African country. So that's one. But if you look at the ways that we collect in, let's say, a country switch system, Zambia, around 80 percent of the phones that we collect is our phones that have been sold. As new in that market. So it's not that no wasted recollecting his European waste that has been shipped to Africa. And then we're collecting it, cleaning it up. The majority of the phones that are sold in African markets every day are new phones, quite often low quality. Unfortunately, the or low quality phones. But it's not. And that's something that we need is often really challenging to understand. It's not that we're shipping a lot of electronics to African markets and then that it's all being dumped. That's not really the reality. The big reality is that African countries lack the collection networks for proper US collection. They don't have legislation in place to make sure that you treat us in the right way and that companies aren't incentivised to do this type of waste management in the right way. Mexico, of course, with a lot of other issues around permitting, etc.. So as a result, we're starting to waste collection of some really from scratch in these countries because nothing is happening, at least not officially or not in the way that we would want it to happen.

Katie Whalen [00:25:18] Thank you so much for clarifying that, because I think you bring up a good point about that there. We have we all have different thoughts about what we think about in terms of e waste and sending it to Africa and things like that from a European perspective.

[00:25:30] So it's helpful to have some insight from someone who has been on the ground and and trying to organize these collection schemes and trying to work with the legislation to see what what is actually possible. I'm thinking in terms of the next steps for closing the loop, do you have anything that you're able to sort of tell us about what you see as kind of this? My guess would be that, you know, lack of collection and trying to continue to work on getting legislation that is in favor of this. But maybe there's something you can you can share with the listeners about the next steps for you, for your organization.

Joost De Kluijver [00:26:08] Sure. I mean, on the one hand, you know, collecting more waste, getting more customers, et cetera, that's great. But it needs to be much been more of a structure, structural solution. Right now, we're collecting waste and reducing electronic waste in these countries. But actually, we're already transforming a little bit. So we're actually becoming a material supplier. You can imagine the metals there are in mobile phones can also be except it's gold, silver and others. So we're now seeing that a lot of companies, especially also what you do in this week is that they use our metals because these metals are arguably the most sustainable, social, clean, et cetera, metals that you can find much more sustainable, then that's a fair trade gold. For example, if you extract metals from waste, that takes much more, much more blocks or so. I think it would make a lot of sense. Is also some legislation was formed around the usage of urban mines or recycled metals. You know, it's it's quite ridiculous to keep mining for metals that are abundant available abruptly above the ground. So that's one. The second thing would be, you know, again, collecting scrap phones is something that we're doing quite well already and it's going very well. And also scaling that. But I think, you know, mobile phones are just the starting point. If this concept. So creating close loops for the usage of electronics could be replicated to laptops or tablets and maybe, you know, other electronic products, that would be, I think, a huge step to indeed creating a bit more waste free world, which especially in the tonic system is much needed. So if we can prove that it's possible for phones now, why not indeed take a next step to also do the same for laptops and other products, if that's possible? And if we show that to markets once things like that, if users want to feel less guilt when they buy a device, if they want to be more certain that the producer, you know, takes responsibility or actually takes opportunity or circularity. I think that's the biggest driver for change. Can create any law that we want to be activist on these topics. But if customers want something like this, that will be a big driver for any producer to make sure that they make their customers happy.

[00:28:50] So that's what we're pushing forward to really show customers that there's not something that they know that will reduce their. Joy, often using electronics would actually will add to it so that they have great products and they also can feel confident that their consumption isn't causing more material scarcity or more waste, but actually their consumption is more circular. Hopefully that will show to producers in the telecom industry that this is the path that they can create more happy customers with.

Katie Whalen [00:29:28] Okay, so thinking from the customer perspective and and and using that as sort of the starting point for creating secure solutions. I like that what you said about the open minds made me kind of the perfect segue to the question that I ask all of the interview guests who come on the Getting in the Loop Podcast, which is about the In the Loop game that I created when I was doing my masters at two Delft many, many years ago now. Not that many. I get it, but seven years ago or so. And so what the game does is it's- In the game, your it's a board game, a serious board game in and in the game.

[00:30:08] You're a company and you have to produce products. And some of these products are actually like mobile phones. And then you have to collect the materials to actually make these products. So it's focused more on critical materials and materials that have been deemed by the EU as critical. So like Yacoobi. So parts of the rare earth metals and things like that, like antimony. So you have to collect these materials. And then what happens in the game is that the market conditions change and it makes it sort of difficult for you to sometimes collect them. Or maybe it's more you're more able to do. Sometimes you're more able to actually get materials or maybe get them from like have been mined, for example. So the question I always ask all of the guests is if they could create an event that would change the market conditions in the game. What kind of what kind of an event would they create? So my question for you, Joost, is what kind of like what kind of event do you foresee happening in the game related to your topic?

Joost De Kluijver [00:31:14] Sure. I think the key thing that we're seeing a little bit with other products as well and also have been has been calculated for not just the metal. Gold is what happens if you create a real price for these metals. And then it will be very clear that no mined gold, for example, is much more costly than urban mines or recycled gold. So that if that's cost stand also included in the production price of electronics, it will, I think, have a huge impact. And then phones that simply ignore or produce that ignore the environmental impact, impact will actually be the most expensive ones set, which is going to be the case that the ones that don't really care will often produce very cheap ones. So that would be quite amusing to see how that impacts the customer decisions. Production process.

Katie Whalen [00:32:17] Yeah, I love it. So getting product- Getting producers to use recycled materials and not, you know, and have a have a incentive to not only use primary materials and mind primary materials. I love it.

[00:32:32] Yeah. So thank you so much for coming on the show today. That went by so fast. I'm just scribbling, taking notes because I've had it so interesting. Before we go, where can listeners go to learn more about you and the topics that we discussed?

Joost De Kluijver [00:32:48] Sure. That's what would be interesting to see our website. Of course, I would also documentary that was made on our approach. It's called Mobile Gold. It was created by the documentary show that's called Backlight. So they might want to see how we collect phones there. And of course, we get you a few videos that explain our service proposition. But these are also on our website, which is closer to the EU.

Katie Whalen [00:33:27] Thank you for listening. I hope you enjoyed this episode for show notes and links, go to our Web site at gettinginthelooppodcast.com.

[00:33:36] And while you're there, subscribe to our mailing list to have new episodes delivered to your inbox every Monday. See you next week.