The role of IT in promoting a circular economy

Why the circular economy matters to IT leaders now

Converging economic, regulatory and environmental pressures have brought circular economy frameworks to the forefront for IT leaders.

Key drivers include the following:

• Intensifying ESG mandates and reporting expectations.
• Escalating energy costs and carbon pricing with a corresponding shift toward renewable energy sources.
• Customer and investor pressure for measurable sustainability progress.
• Regulators and stakeholders increasingly require traceability across IT supply chains, from sourcing through end-of-life management.
• Volatile supply chains and rising hardware costs that affect hardware availability and raw material sourcing.

Circularity is also connected to digital resilience, enterprise risk management and long-term technology strategy, making it a crucial component in any organization's planning.

Specific business values include the following:

• Cost optimization through extended lifecycle management.
• Reduced dependence on scarce components.
• Improved resilience through diversified supply chains.
• Stronger alignment with renewable energy and decarbonization goals.

Roles that IT leaders play in a circular economy

Executive leadership roles guide and empower the organization's approach to the circular economy.

Leadership and governance roles include the following:

• Procurement alignment. Embed circular economy criteria, such as recycled resources, take-back programs, repairability scores and transparent supply chains, into IT vendor selection.
• Security and sustainability integration. Balance device longevity with patching, compliance and zero-trust controls to safely extend lifecycles.
• Data-driven decision-making. Use lifecycle and utilization data to forecast demand, mitigate supply chain risks and plan capacity with fewer new purchases.

Successful integration of sustainable IT practices requires cross-functional leadership that coordinates IT, finance and operations to tie circular KPIs to cost, risk and ESG outcomes.

While executive leadership and strategic momentum help develop a circular economy within the organization's technology departments, the operational and technical roles of the IT teams are crucial.

These roles include the following:

• Lifecycle orchestration. Implement tools that track assets from procurement to end-of-life, enabling repair, refurbishment and redeployment to extend useful life and reduce waste.
• Device-as-a-service models. Shift Capex to service-based provisioning, incentivizing vendors to design for durability, recovery and the reuse of raw materials.
• Responsible and functional e-waste pathways. Standardize certified recycling and secure data destruction, capturing components for secondary markets and circular supply chains.
• Energy optimization. Use telemetry and AI-driven automation to right-size workloads, reduce waste and align infrastructure with renewable energy sourcing.
• Design for standardization. Reduce hardware diversity to improve parts reuse, maintenance efficiency and asset utilization.

These roles alter some traditional IT responsibilities while realigning IT with strategic goals.

Real-world examples of a circular approach to IT tools

A circular economy approach to IT management is not an untested framework. It's a reality in many leading organizations, including Microsoft and Dell.

Example 1: Microsoft Circular Centers device lifecycle transformation

Microsoft expanded its Circular Centers' internal device reuse and refurbishment programs to reduce hardware procurement and waste. Faced with high device turnover and rising hardware costs, Microsoft implemented centralized refurbishment pipelines and redeployment standards.

The program included lower procurement demands and improved asset utilization, improving reuse and recycling rates for servers and data center components. This approach shows how internal redeployment can be more useful, at least to start, than external recycling.

Example 2: Dell's circular hardware supply strategy

Dell Technologies integrated recycled materials into product design and expanded device recovery programs to combat resource scarcity and supply chain volatility.

Material recovery initiatives and circular supply chains resulted in reduced reliance on virgin raw materials and improved sustainability metrics. Dell's collaboration with vendors on take-back and refurbishment programs also aided this process.

Circular economy metrics to track

A circular economy IT program requires specific metrics. Core KPIs span the organization to encompass all aspects of technology use.

Specific KPIs include the following:

• Asset utilization rate.
• Average lifecycle length.
• Percentage of refurbished vs. new equipment.
• Percentage of assets redeployed internally.
• Recovered material value.
• Vendor take-back participation rate.
• Energy intensity per workload.
• Waste reduction volume.
• Share of recycled or renewable raw materials.
• Supply chain sustainability scores.

These metrics can shape sustainability governance and policy. Here's how sustainability leaders can get the most out of them:

• Embed circular metrics into ESG reporting and financial dashboards.
• Align measurement across IT, finance, operations and procurement to ensure comprehensive coverage.
• Use the acquired lifecycle data to inform investment planning and risk management.
• Share progress with stakeholders -- including employees and customers -- to drive accountability.

How IT leaders can get started

The most effective programs start with visibility, targeted action and cross-functional alignment. If IT leaders can ground decisions in lifecycle data and focus on practical steps, they can reduce waste, strengthen supply chains and unlock measurable efficiency gains without disrupting core operations.

Follow these steps to develop an organization-wide approach to the circular economy.

Step 1: Assess current IT lifecycle conditions

Begin with a fact base. This includes taking inventory of all hardware assets, mapping average lifecycle length and quantifying energy use, maintenance frequency and disposal pathways.

After those steps, teams can identify where devices are underutilized, retired early or lack secure refurbishment options. Then, they can establish baselines for waste reduction, energy intensity and procurement tied to raw materials.

Step 2: Identify quick wins vs. long-term initiatives

Prioritize actions with immediate operational effects, like the following:

• Improve internal redeployment workflows.
• Standardize device configurations to simplify repair.
• Update procurement criteria to favor repairability and recycled content.

Simultaneously, plan longer-term shifts such as device-as-a-service models, vendor take-back agreements and infrastructure optimization aligned with renewable energy sourcing.

Step 3: Align internal teams and governance

Create a cross-functional governing body spanning IT, finance, procurement, operations and sustainability. The people involved should define shared goals, ownership and reporting cadences. They should also embed circular economy metrics into IT budgeting, vendor management and risk reviews, so their decisions consistently reinforce lifecycle extension and supply chain resilience.

Step 4: Pilot, measure and scale

Launch targeted pilot programs, track related KPIs, validate cost and risk outcomes, and scale successful practices enterprise-wide -- for example, a pilot program that refurbishes a single device class.

The circular economy for IT is a resilience strategy as much as a sustainability initiative. Organizations that manage lifecycle value, supply chains and energy consumption can gain cost, risk and operational advantages.

Circularity is an ongoing capability, not a one-time program. With the right metrics, partnership and governance, IT organizations can reduce their environmental impact and strengthen business performance.

Damon Garn owns Cogspinner Coaction and provides freelance IT writing and editing services. He has written multiple CompTIA study guides, including the Linux+, Cloud Essentials+ and Server+ guides, and contributes extensively to TechTarget Editorial, The New Stack and CompTIA Blogs.