In this course each week we are going to revisit some of the ideas that have been presented from the perspective of a mobile phone. A mobile phone is good example for thinking about where materials come from, how they’re mined and processed as well as the increasingly complex value chains that turn raw materials into useful products. Phones are also a good example to use to start to think about innovating for more circular products, business models, policies, and circular societies. Some materials in mobile phones we’ve used for a long time. Aluminium for example, we know where and how to mine it, how to turn it into a useful metal for a phone, and even how to recycle it and use it again. So how does a phone company approach sourcing such materials for their phones? We spoke with the phone company Fairphone, based in the Netherlands, about how to manage sourcing materials to make their phones. The list of critical materials from the EU is very much based on a risk of supply. When we look at materials at Fairphone we try to take a bit more holistic approach. Together with studies that we have done, such as the recyclability study or the scoping study, we have been looking at different social and environmental issues behind certain supply chains, and we have selected where we want to focus in the next years Smartphone designers have increasingly made innovative use of materials, like indium and rare earth elements that help make touchscreens functional and colourful. There is lithium and cobalt in the batteries, and elements like tantalum and gold that are key to the function of the electronic components, while elements like tungsten are found in the vibration motors. For us, the great thing about having a product is that we can really go back the supply chain, following our own product. For tungsten – the vibration mechanism – the vibration mechanism has more than 20 parts in a very small component. And what we managed to do with this project is to convince the smelter to start buying again from the North of Rwanda, with the idea that we could show that that mine was out of conflict already. And that we could keep on buying from this mine, so we could help with the economic trade so this mine would even develop further later. And that tungsten came in our phone, which is pretty cool, because you give tangibility to the whole project. You are not talking about just hypothetical supply chain that ends up in any product, but literally a piece from the North of Rwanda is in your phone. And we think that giving that tangibility to the project in the beginning is very important to get everybody kind of excited. In addition to the challenge of sourcing materials from conflict areas or managing supply risks, we also know that there can be severe environmental impacts from mining materials if not managed in a sustainable way. So how can companies deal with this? If you look at gold, there is very often you can see use of mercury for gold extraction, which has a huge health issue. With that one in particular we decided to work with fair trade gold, so this is gold that comes from mines in Peru and it’s completely traceable, but also the standard for fair trade gold is much higher than just conflict free. They really look at the whole list of environmental and social issues and certify that it is done in a proper way. So that’s an example. While we were doing the project where gold goes to a very specific process in the manufacturing in our printed circuit boards, our printed circuit manufacturer was like well, you know, for us it’s just easier to use this gold for all of our production. That already shows that for them was not so much more costly to use that gold, and that increases already the demand needed for that specific process. You can imagine, this is a factory where millions of PCBs are made from many other manufacturers, so you know, there might be a little bit of fair trade gold in their products without even them knowing yet. But thinking about sustainability issues holistically can also be challenging, for example, take Fairphone’s experience in sourcing tin. With tin it’s interesting because in 2010 we started all looking at conflict materials and we were very focused on Congo and what was happening there, and then all of the sudden in 2014/15 we learned about Bangka Island where you see, it’s a place where there is no conflict at all, but the mining of tin causes huge environmental degradation, so that’s an example of other issues that may not have everything to do with how risky you supply is in terms of how easy you can get that material. Not all the responsibility can be laid on the brands, right? Like the brands we all know as consumers are only the kind of last step in the chain. Which is really important and necessary is that we collaborate across the supply chain So collaboration across complex supply and value chains is important, but is this really the goal of a phone producer? It sounds nice, but does this also increase costs? And if that’s the case, why does Fairphone do it? Probably for us the costs are higher, because from fair trade gold for example, it was not just selecting that gold, it was working with fair trade to make sure that that certification was applicable also to the electronics industry, which was not the case back then. With that we managed to create more opportunities for mines that are certified with this certification to have access to the electronics industry now, which is the third industry in the use of gold worldwide. So it is a difficult question. I would say that I would like to turn the idea of ‘this costs more’ into an opportunity as well. If we are really serious about this transition to have a more sustainable supply chain, I think we need to get away from the idea of commodities, we need to ‘de-commoditize’ commodities. People would tell you gold is gold and you can just use it, but that is not true it really depends where it comes from, how its resource efficiency is achieved as well. So there are many other things that we need to look as well, and that you can turn from a cost to an opportunity for your brand. If you show leadership, if you show that you are there really for this transition to more sustainable supply chains, you can also reap the benefits of being part of the leaders and pioneers. And that may have a lot of influence and good for your brand as well, which may turn in the end into revenues. Turning circularity into an advantage for businesses is key for the circular economy, and we will look at just how businesses can do that in Module 2 of this MOOC.