Fortune
 by Marc Gunther

Sony champions free recycling

The electronics giant says it will take back all Sony products at no cost to consumers. Will rivals follow? Fortune's Marc Gunther reports.

By Marc Gunther, Fortune senior writer

(Fortune Magazine) -- The company that invented the CD, the Walkman and the PlayStation will soon become an environmental pioneer, too: Sony says it will offer free recycling of all its products in the United States.

Last week's surprise announcement from the global electronics giant - Sony (Charts) posted $71 billion in 2006 revenues - could have a big impact. It pressures other companies to take back and recycle TV sets, stereos, music players, laptops, DVD players, video game machines, cameras and other electronic waste.

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"This represents a challenge to the rest of the industry," says Mark Small, who is vice president of environment, safety and health for Sony Electronics.

Until now, the TV industry had been unified in its opposition to the idea that manufacturers should be responsible for taking back and safely recycling the things they make. Sony itself belongs to an industry coalition that fights state take-back laws.

But in a turnabout, Sony now says it is the company's responsibility "to provide customers with end-of-life solutions for all the products we manufacture."

Chances are, its rivals will find it hard to disagree. That's what has happened in the computer industry, where Hewlett Packard (Charts, Fortune 500) led the way in recycling and now competes with Dell (Charts, Fortune 500) to be the most eco-friendly maker of PCs. Under pressure, Apple (Charts, Fortune 500) recently agreed to expand its recycling, too.

Environmentalists like Barbara Kyle of the Computer TakeBack Campaign intend to do what they can to bring about a similar scenario in the consumers electronics business. She applauded Sony's initiative.

"We've seen the IT industry doing takeback," Kyle says, "but the TV industry had been united in saying they can't make the economics work. This suggests that it's not impossible." If Sony can offer free and convenient recycling, "presumably they can all do it," she says.

The economics, as it happens, don't work very well. While useful materials like metals, glass and plastic can be recovered when electronics are recycled, the value of the materials is not enough to cover the expense of recycling. Sony won't say what its program will cost.

But the company has set an ambitious long-term goal for itself: To recycle one pound of old consumer electronics equipment for every pound of new product sold.

Says Sony's Small: "For our business to grow, we must embrace sustainability."

Thus Sony puts itself squarely in the camp of environmentalists and a handful of companies who are trying to turn our throwaway culture into one where stuff that's no longer wanted or needed is reused, recycled and turned into something else. Wal-Mart (Charts, Fortune 500), Toyota (Charts) and others have embraced this idea, which is called "zero waste."

Activists have focused on electronic waste because it's one of the fastest-growing categories of garbage, and often contains hazardous materials like mercury and lead. An oft-cited 2005 study by the U.S. EPA found that about 1.5 to 1.9 million tons of electronic waste was discarded in landfills; only about 345,000 to 379,000 tons were recycled.

Other surveys suggest that consumer electronics are rarely thrown away, but more often donated or sold.

Sony admits that its program, as currently conceived, is just a start. Beginning Sept. 15, the company will take back any Sony-branded product at 75 drop-off centers in 32 states operated by Waste Management Recycle America, a unit of the trash-hauling giant Waste Management (Charts, Fortune 500).

That's obviously not enough, and 19 are bunched in Minnesota, where Sony and Waste Management have had a pilot program for years. You can find a list of drop-off sites at sony.com/recycle.

Within a year, Sony and Waste Management will offer 150 sites. Their goal is to eventually provide drop off locations within 20 miles of 95 percent of the U.S. population. Sony will also try to persuade retailers who sell its products to take them back; retail giants like Wal-Mart, Best Buy and Circuit City could eventually be enlisted to pick up old electronics when they deliver new.

If all goes according to plan, disassembly will be done in the United States. Vast amounts of electronic waste are currently exported to poor countries, particularly China, where safety and environmental standards are lax.

As a member of an industry group that calls itself the Electronics Manufacturers Coalition For Responsible Recycling, Sony had opposed electronics take-back laws passed in nine states.

Small told Fortune that Sony has been "a reluctant member of the coalition" and might now drop out. Fifteen other companies, including giants Philips, Panasonic and Sanyo, are part of the group.

The Consumer Electronics Association, which includes a far broader range of firms, has also opposed state laws, saying a national solution to e-waste is required. The CEA has a website for consumers at http://www.mygreenelectronics.org/ that includes information about where electronics can be recycled.

It's too soon to know how other electronics firms would respond to the Sony initiative, says Kristina Taylor of the CEA.

"What Sony has done is fantastic, but it's voluntary," she says. "The industry doesn't want to be mandated because not every TV manufacturer can afford it."

Eventually, though, the cost of product takeback may become part of the cost of doing business. Top of page