HP links $700 million in revenue to sustainability strategy

recycling, HP Inc., closed loop
HP Inc.
HP partners with Los Angeles-based Homeboy Electronics Recycling, which employs formerly incarcerated individuals, to recover material from end-of-service devices to include in its closed-loop materials stream.

It’s getting simpler for HP Inc.’s chief sustainability and social impact officer Nate Hurst to justify his strategy to his CFO. He lets the numbers do the talking.

Like this compelling data point: In 2017, HP calculates that at least $700 million in new revenue was related to contracts or sales in which sustainability factors were a known consideration.

Those results underscore Hurst’s heightened interest in ramping up the company’s ability to collect and reuse more plastics and components in manufacturing new printers, ink cartridges and personal computers. They also explain his interest in prioritizing how to educate more buyers about the value of products produced in closed-loop models that embody circular economy principles.

"The business value that what we would call sustainable impact, and what others might call sustainability, is really delivering to the business," Hurst told me. "This work, some of what I mentioned and additional work that you find in the report, it was a key differentiator for over $700 million in new revenue this past year. That’s a 38 percent year-over-year increase in sales bids with sustainability requirements."

Much of that business was related to commercial and enterprise accounts, but some of it is attributable to consumer sales, Hurst said. "The enterprise customer is definitely still demanding this more and more, but with millennials and Gen Z and all the customer insights that we have on that, it’s becoming an increased issue for them as well, a key difference maker in their purchasing decisions," he said.

HP’s revelation is detailed in its latest corporate social responsibility report (PDF), which outlines its progress on many fronts. Last year, for example, the company exceeded its commitment to reduce the greenhouse gas emissions intensity of its product portfolio by 25 percent — it cut them by 33 percent compared with the 2010 baseline numbers.

Many notable achievements outlined in the update relate to HP’s multiyear commitment to embracing circular economy principles for design, production and end-of-life management of its products. The company’s Planet Partners program — started more than 25 years ago before Hewlett-Packard split in two to form HP Inc. and Hewlett Packard Enterprise — has collected and reused more than 784 million ink and toner cartridges over its lifetime.

Some other metrics:

  • Through 2017, the company had manufactured more than 3.8 billion cartridges using about 99,000 tons of recycled plastic. (HP also uses apparel hangers and post-consumer water bottles in that process.)
  • An estimated 80 percent of HP's ink cartridges contain anywhere from 45 percent to 70 percent post-consumer recycled content; all of its toner cartridges contain between 5 percent to 38 percent recycled content.
  • Over the past year, HP has sourced more than 170 tons of plastic bottles through a program it started in Haiti designed to create a new supply chain for plastics that otherwise might wind up on the ocean. That’s about 8.3 million bottles.
  • As part of a program with retailer Best Buy, HP harvested 3,200 tons of recycled plastic from electronics, to be used in the production of certain printers, such newer versions of the HP Envy photo printer line. (The 7100 and 7800 models both use recycled resin for about 30 percent of their plastics content.) 
  • The company is gearing up to collect and recycle more than 1.2 million tons of plastics and other components from its printers and hardware by 2025. As of the 2017 report, it has recycled more than 271,400 tons. 

What’s next? Keep your eyes on HP’s program with Thread International and First Mile Coalition in Haiti, where the company is engaging local businesses and entrepreneurs interested in creating a scalable model for turning plastic that otherwise might find its way into the ocean into materials that can be put back into production. The initiative is also meant to discourage the use of child labor at Haiti's largest landfill by providing scholarships to families participating in the project.

HP’s effort in Haiti actually piggybacks off an effort by textile company Thread and apparel company Timberland, turning recycled plastics into shoes, backpacks and shirts. Hurst notes that in order for such efforts to scale to other geographies, the company will need to find ways to collaborate, so that there are more potential uses for recovered plastics and so that expenses can be shared among more business partners.

"If we can get other companies to come in, then obviously that will help with some of the equipment hurdles as well as driving more volume and demand for this reused plastic," he said.

HP plans to continue to design more recovered materials into its product lines, including personal computers. It’s simpler to do this for new products, Hurst said, adding that the most difficult part is helping the use of these materials become more commonplace across HP’s business partners. Toward that end, HP plans to become much more vocal about promoting the value of this approach to its customers.

"What we’re all grappling with is how we get these reused, recycled materials into the supply chain," Hurst noted, referring to other companies that, like HP, are actively developing business practices inspired by circular economy principles. "How do we create more demand for them [so ] that our likeminded suppliers are prioritizing these materials as they move forward? How do we drive down the cost? One of the ways that you can drive down the cost is to increase the volume and demand for such products."