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Episode 136: VC hype vs. Wall Street

Oct 22, 2019

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Sep 24, 2019

Some iPhones are now made with recycled rare earth minerals. Will that change the rest of the industry?

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Competition and consumers might follow — or shrug.

New smartphones come out like clockwork every year, and most people buy new phones every two years. But that upgrade cycle is terrible for Earth. Smartphones are energy intensive to manufacture and involve mining dozens of rare earth minerals. Very few parts of the phone can be recycled because extracting those metals is also difficult and energy intensive.

But last week, Apple announced it’s cracked part of that nut. It found a supplier of recycled rare earth materials, and now Apple is putting them in its newest iPhones. The company says this is a first in the industry.

I spoke with Lisa Jackson, who is Apple’s vice president of environment, policy and social initiatives. The following is an edited transcript of our conversation.

The Taptic Engine provides haptic (touch) on Apple Watch by way of vibrations. The engine is responsible for about 25% of rare earth usage in iPhones. (Photo courtesy of Apple)

Lisa Jackson: The rare earths in the Taptic Engine [Apple’s proprietary vibrate mode] are exactly about a quarter of all the rare earths that are in other parts of the phone. We still have work to do, but now that we’ve identified this source, I think one of the big pieces of work will be to scale and to ensure that they have enough used material coming in so that they can give us the quantities that we need. It really is a matter of making this market all the way from getting used material in and then recycling it, and then getting it back into our products.

Molly Wood: I want to ask you about the counter argument, which is that even if these devices contain more recyclable material, they’re still resource intensive and energy intensive to make — even the recycling itself, and there’s a new phone announced every year. What is the tension between the upgrade cycle and the sustainability?

Jackson: Customers decide their upgrade cycle. What we are proud of is that we have always made devices where part of what you get when you get an Apple device is one that’s designed to last. Apple devices are designed, for example, to have free software upgrades that go back many, many, many years and make your device like new just by upgrading the software. And sometimes replacing the battery if necessary. If you can keep that device in use for a long time, if you can pass it on, if you can decide that there’s other uses for it, that’s the best thing for the planet.

Wood: I must push back a little bit there and say that these devices have historically been difficult to repair or upgrade yourself. I have a 2013 MacBook Air that I love and I’m clinging to for dear life, but I can’t upgrade the components because they’re soldered to the motherboard. Some people have historically felt that they need to buy new products more often. Do you see some of that changing? Do you see repairability factoring in here?

Jackson: I think our devices have become more repairable over time. One of the tensions in durability is that soldering and how components are fastened have a big impact on their durability, whether that MacBook Air still works after you drop it — maybe you don’t drop yours, but I drop mine often. I do think that we must look at both the repairability and the durability, and Apple designs its devices to have both. We’ve also made some wonderful improvements over the years in making repair through our authorized service program much more available. Now we have our new repair program that we just announced where it makes it easy for people who are trained, who sign up for free training, to register and get access to Apple parts, which has been something we’ve heard from many folks who are in the repair field.

Wood: What are the constraints? Certainly, there are always going to be constraints between making consumer devices that you want people to buy and sustainability efforts, even if that’s a short-term financial loss on the road to longer-term sustainability. What do you run into? What are the things that are hardest to overcome?

Jackson: I think it’s recognizing what the field is about and realizing that innovation is what the technology sector, what this field, what the iPhone, what a Mac is about. So how do you not hold back the innovations that have powered this entire market and power entire sectors? I think what we must do is, from the very beginning, think about ways to lower our impact on the environment and have both. One of the things that I really believe is that the best products in the world must be best for the world, that customers should feel proud of the fact that Apple has been consistently lowering its overall corporate footprint over the last many years. It went down again this year. The fact that last year we announced that we run this company on 100% renewable energy. Over the past year, we’ve doubled the number of our suppliers to 44, who’ve agreed to run their Apple operations on renewable energy. Over five gigawatts of new energy come in on the grid around the world in the manufacturing sector, which many of us believe is the hardest one to decarbonize, and which we’re working right now hand in hand, side by side with many of our suppliers to decarbonize.

“As a former regulator, I will never believe that the private sector can do it alone or without the right pushes and the right guardrails,” Jackson said. “But first, somebody must prove it can be done.” (Photo courtesy of Apple)

Wood: How are you approaching the technology transfer of some of this? Big question is, there’s leading by example, and then there’s pushing the industry forward. Where do you think Apple sits on that timeline?

Jackson: Our intention with the recycled material program is to make it one where we share technologies that we find and innovate as we have them. We don’t have any desire to go into the recycling business, but we love to see more recyclers who have capability to do what we call specialty recycling. Things like rare earth recycling or cobalt recycling. We’d love to see those become profitable and big enough to service the entire sector. We’re just at the beginning of the innovations we’ll need. In the beginning, we’re not ready to share innovations, but we have, and it’s actually a little bit of a joke around Apple that, unlike Apple famously likes to guard its innovations on the product side, we’ve written white papers, we go out to speak at conferences, we work with governments, especially in Europe, where there’s a real focus on this idea of a circular economy on reuse and remanufacturing. We want to be a resource there.

Wood: Is that how you help build that market? Do you think you show that it works? You buy from suppliers, who then have money to continue their research who can then sell to other manufacturers?

Jackson: It’s a virtuous cycle. It helps when you have regulatory agencies that are trying to push that virtuous cycle. As a former regulator, I will never believe that the private sector can do it alone or without the right pushes and the right guardrails. But first, somebody must prove it can be done. Most of our U.S. environmental laws are based on a technology demonstration. You can’t get clean air from auto emissions without a catalytic converter. Once the catalytic converter is available, though, you can require that cars burn cleaner. The obvious example today with California and its wonderful clean car programs, so many of the innovations that have become almost standard around the world started by technology advances that were engineers recognizing that there was a regulatory need, there was air quality need, there was a health need. And frankly, there was a marketplace. We hope to start the marketplace, and I’d love to see governments recognize the art of the possible here and maybe think about ways to bring recycling along so that we have the recycling of the future, just when we’re having products of the future at the same time.

Wood: There are still going to be those who say, fundamentally, consumerism is the driver of so much waste and so much of the things that are negatively impacting the climate. Would it help if Apple said, “It’s OK, you don’t need a new phone, and a tablet, and a watch, and a laptop, and AirPods? Is there a message that could reduce our consumption?

Jackson: I hope it’s the message that I gave myself onstage last year. Last September, I was up onstage and I said that a product that lasts a long time — I think in that case, I said iPhone — is the best thing that you can do for the planet. I’m wondering if your question is more whether consumers ask themselves that question or whether Apple should stop the innovations that drive our world? I think that’s a better question.

Wood: You were the [Environmental Protection Agency] director during the Obama administration. I know that there are a lot of former Obama administration officials in the tech sector now. And I wonder why you made this move? Why did you move to the private sector?

Jackson: I’m a chemical engineer by training. I have my master’s in engineering and I worked for EPA and in the public sector almost my entire career. I started as a staff-level engineer and I ended up as administrator. I can’t think of any higher honor than public service. My dad was a mailman, and I used to tell the story of public service was in my blood, and I feel proud of that work. When it was time to move on, I cannot think of another company I would have gone to work for. What really impressed me was the CEO, Tim Cook, who I’d met a few times. When we spoke after I left, made it really clear that making a mark on the planet in a positive way was one of the core values that he saw and one of the things he thought Apple could do that maybe only Apple could do, partly because of our scale and partly because of our knack for innovation. It sparked the engineer in me.

I’d done all the policy innovating I could do. We talked a lot when I was at EPA, that you can’t make progress if the technology isn’t there to allow you to. To be able to come here and show that you can run a company this large on 100% renewable energy, to show that you can and that we have an obligation to help our suppliers get there as well, to show that if we do nothing, the recycling of electronic products will not end up in a closed loop cycle. It won’t mean making products from recycled and renewable material. We will continue to deplete resources, and while we’re not there yet, I feel 100% certain that we can get there. I think I’m right where I’m supposed to be. I feel like I didn’t lose a minute of impact.

In 2017, Apple said its goal was to make all its products from 100% recycled materials. Experts said this latest news is indeed a big deal for both Apple and creating a market for rare earth recycling. (Photo courtesy of Apple)

Related links: more insight from Molly Wood

I mentioned that Apple is getting already recycled rare earth material from an outside supplier, which it hasn’t named. Lisa Jackson told Reuters that the recycled rare earths are coming from material that’s generated during manufacturing, not minerals that have been recovered from old smartphones or laptops or things like that. That’s an important distinction, because right now scientists and Apple are still trying to figure out how to get materials out of old devices and then reuse them in a way that makes financial sense. There’s a good piece at Gizmodo from earlier this year that explains all that.

On top of that, less than 20% of smartphones are recycled. Many are thrown away, and others just sit around peoples’ houses in drawers. This isn’t to throw cold water completely. If there’s a way to use recycled materials in phones that’s incentive to create a market for those materials in the first place, which speeds up the incentive for entrepreneuring science types to make it more economical, that’s why it’s so important to create this market in the first place.

Producer Stephanie Hughes was at the United Nations General Assembly Climate Action Summit on Monday. One of the speakers was Anurag Saha Roy, a young entrepreneur who won a competition sponsored by the UN to come up with an “innovation” that addresses climate change in some way. His team created a platform to let farmers get better access to high quality weather updates to make them more resilient to the changing climate. And he also delivered a plea on behalf of entrepreneurs building climate tech everywhere.

The team

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