Computer maker becomes friendlier to critics and the earth

dell-jacksonDallas Morning News
Crayton Harrison

Dell Inc. has gone from mean to green in the eyes of environmentalists. The Round Rock-based computer giant, once the subject of bitter protests by recycling activist groups, now invites environmental leaders to speak at events it sponsors.

Activists no longer characterize Dell as an uncaring, earth-ravaging corporate monster. Instead, they say, Dell has become one of the pioneering manufacturers leading the industry to a universal plan for recycling hazardous electronic waste. The truce shows how Dell, driven foremost by its pursuit of profit and sales growth, figured out a way to appear more earth-friendly and, the company hopes, make money at the same time.

To get to that realization, Dell executives, including founder and chairman Michael Dell, had to question some of their own notions about the way to deal with critics.

“This company had never been picked on before,” said David Wood, executive director of the GrassRoots Recycling Network, one of the activist groups.

Dell’s first big encounter with environmental activists came at the company’s annual shareholders’ meeting in 2002. Texas Campaign for the Environment members handed shareholders papers describing the woeful ratio of Dell customers who recycled their computers.

Those computers ended up in consumers’ storage closets or companies’ warehouses — or worse, in landfills, where dangerous chemical ingredients such as mercury and lead could leak into the ground, water and air.

Inside the meeting at Austin’s convention center, the activists lined up in front of a microphone to repeatedly ask Mr. Dell why the company recycled so few computers. Mr. Dell knew the questions were coming, and he had a stock answer ready: demand for recycling wasn’t high enough, and Dell was in the business of demand. If customers started asking for more recycling services, Dell would review its policies. The answer was enough for many shareholders, who booed as the environmental group kept asking away. But the environmental groups felt they had made a mark.

“That was our first really public demonstration,” said Robin Schneider, executive director of the Texas Campaign. “We needed to bring it clearly to the attention of the top people of the company.”

Six months later, environmental groups picketed against Dell at the Consumer Electronics Show in Las Vegas, embarrassing the company in front of its peers and the international press gathered for the giant trade show.

Even before the CES demonstration, Dell had begun to respond. The company publicized the recycling services it had for businesses and launched a program in September 2002 in which consumers could pay $15 to have old computers picked up and recycled. But recycling advocates wanted Dell to include the cost of recycling in a PC’s price tag, believing that would encourage more customers to recycle. They pressed Dell to endorse the model.

A new role

By 2003, Michael Dell and other executives were realizing that playing defense against environmentalists wasn’t working. In January of that year, the company appointed Pat Nathan to oversee its recycling programs and communications.

Ms. Nathan had held a top position with the company in Europe, where the same recycling issues were receiving much more public attention. Her job as sustainable business director in the United States would be to help develop and communicate a recycling strategy that was environmentally and financially sound.

About the time Ms. Nathan came to Round Rock, the company started looking at recycling in a new way. The demand for recycling wasn’t great among customers, making it an atypical market for Dell to enter. But assuming that the problem wasn’t going to go away, recycling might be something that Dell could do well.

Dell had to start finding some common ground. “We basically started a dialogue with our critics,” Ms. Nathan said. “We needed to listen.”

Mr. Dell started meeting face to face with critics, first with so-called “socially responsible” investment groups.

“They came back with a system that we’re still working with them on,” said Anita Green, vice president for social research at Pax World Funds. “My sense is that they’re committed.”

In December, Mr. Dell met with environmental group leaders, including Mr. Wood and Ms. Schneider. By then, Dell had decided that the “producer responsibility” method of recycling, the idea that computer makers should pay for recycling and pass the cost on to consumers in the PC price, was the right approach.

Nationwide standard

Environmental groups understand that Dell can’t do it alone, Ms. Schneider said. Dell wants the entire computer industry to adopt the producer responsibility ethic and to develop standard methods of collecting old computers.

If all computer companies are involved, the playing field becomes level, Dell argues. Then Dell can do what it has done with other businesses: analyze data from suppliers and customers to develop more efficient recycling methods, eventually recycling computers at a lower cost than its competitors can and offering customers a lower price, Ms. Nathan said.

Dell wants the industry to develop a national standard for recycling so it doesn’t have to develop different programs in each state. Dell’s biggest rival, Hewlett-Packard Co., agrees with that notion.

“The problem now is to get anybody to agree on this,” said Kevin Farnam, manager of corporate environmental strategies at H-P. “Every company’s a little different. We all go down different paths.”

H-P has long been a favorite of recycling advocates, consistently getting high marks for its programs while Dell has flunked. But Dell is catching up. The Texas Campaign, which opened an office in Arlington last month, will soon release its report card of computer industry recycling programs. “Dell is no longer at the bottom of the pack,” Ms. Schneider said.

Dell’s newfound rapport with environmental groups hasn’t been its only success, Ms. Nathan said. The company has learned to be more open and available to critics.

When another environmental group asked Dell recently how much recycled paper it uses in its catalogs, the company immediately started examining the problem and decided it could improve. “Before, we might have ignored it,” Ms. Nathan said.