The leasing model where technology equipment finds a new life
November 29th, 2023
CHG-MERIDIAN design technology finance and end-to-end lifecycle solutions for IT, Healthcare and Industrial equipment. Companies benefit from using the equipment while CHG-MERIDIAN take on the ownership risks, including end-of-life disposal in line with the circular economy.
CHG-MERIDIAN entered the Australian market in 2018 via the acquisition of Equigroup which has been operating in Australia for over 30 years. CHG-MERIDIAN supports organisations to invest in equipment and manage the entire technology lifecycle, from procurement and use to data erasure, refurbishment and the remarketing of used equipment.
In 2022, 924,000 assets globally were released for a second usage cycle, which equates to 96 per cent of leased IT devices that were returned, refurbished and remarketed.
There is no doubt that technology makes our lives easier and more accessible. But the rate at which we’re using and upgrading our devices is heavily contributing towards making electronics the world’s fastest growing waste stream.
Think about how many devices might be sitting unused and tucked away in our drawers, ready to be thrown away. Many companies experience this same issue, particularly with IT equipment, as it gets replaced every two or three years after becoming technologically obsolete. According to the World Economic Forum, less than 20 per cent of decommissioned IT equipment gets collected and recycled.
This isn’t sustainable for responsible businesses, nor the planet.
On the contrary, leasing or renting equipment can help to mitigate this issue. CHG-MERIDIAN design and implement bespoke equipment leasing solutions that reduce total cost of ownership, improve asset utilisation and enable technology to join the circular economy.
We sat down with Lukas Tränkle, Executive President, ANZ, at CHG-MERIDIAN and discussed how they’re actioning the circular economy through their innovative and transparent leasing models.
“CHG-MERIDIAN helps organisations invest in IT, healthcare and industrial equipment via technology finance and lifecycle management solutions based on the circular economy. We can support our customers across the entire technology lifecycle, from procurement and use to data erasure, refurbishment and the remarketing of used devices.”
“Rather than owning devices, our clients benefit from using the equipment and at the end-of-lease, we refurbish and remarket it to give it a second life. These assets are professionally refurbished and undergo certified data erasure to ensure compliance with data protection laws.”
“For us circularity makes common business sense - it supports our customers in meeting their sustainability goals while delivering the prerequisites to achieve their organisational goals. Furthermore, it helps them in going from CAPEX (capital expenditure including a company’s physical assets like building, machinery and equipment) to OPEX (operating expenses including employee salaries, rent and utilities), which allows them to free up capital to invest where they can generate the greatest value.”
“The operating lease model is pretty much the highest attainable business model in a circular economy. We have had the as-a-service model in place since the start of our company in 1979. It is our bread and butter, and we are so proud to enable our customers’ technology to join the circular economy.”
“Few companies are positioned like ours, where the circular economy comes naturally. Our model is unique as we cover a significant part of the technology lifecycle and its supply chain and support our customers with a financing the solution. It helps our company even further in retaining greater value of our business proposition and deliver competitive solutions for our customers.”
For us circularity makes common business sense - it supports our customers in meeting their sustainability goals while delivering the prerequisites to achieve their organisational goals. Furthermore, it helps them in going from CAPEX (capital expenditure including a company’s physical assets like building, machinery and equipment) to OPEX (operating expenses including employee salaries, rent and utilities), which allows them to free up capital to invest where they can generate the greatest value.
“As a technology management company, we offer our customers end-to-end support throughout three stages:
Consulting and Procurement
During this stage, we conduct needs-based procurement of assets. Currently, we don’t control the actual making process of the products we deliver to our customers as it is up to them to decide which products they would like to use. So, we don’t have any influence on the sourcing, manufacturing and design of the products, which would enable one to have a greater impact as ecodesign principles could be supporting greater value retainment. However, our expertise and data enable us to make informed recommendations to our customers based on their business and sustainability objectives.
In-life technology management
During the equipment lifecycle, we support our customers with in-life services and our asset management system, tesma. tesma provides complete transparency over the technology landscape, including equipment data, such as location and cost, and when it is due for renewal. Our financing and end-to-end capabilities underpinned by tesma mean our customers benefit from a full-service solution that empowers them to focus on their strategic priorities and have visibility and control over their fleet.
Lifecycle extension and waste reduction
Refurbishment and reuse: When our customers are ready to upgrade their equipment, we collect it at the end of lease. From here, we sanitise all data and refurbish and remarket it to give the technology a second life, extending its use and conserving resources. Sanitising the equipment is a crucial step to ensure compliance with data protection laws and protect our customers.
Recycling and recovery: Equipment that is no longer viable for refurbishment and remarketing are used for parts harvesting after data erasure. Devices that contain extremely sensitive data must have their hard drives destroyed first before parts harvesting. The remaining materials are responsibly recycled to avoid waste to landfill. Our business model revolves around maximising value, so we also try to avoid the lowest circular loop with the lowest value - which is recycling.”
“In 2022, 924,000 assets were released by us for a second usage cycle. This means 96 per cent of leased IT devices were returned, refurbished and remarketed. The remaining four per cent of lease returns were assets that were beyond repair and no longer usable, or were devices with highly sensitive data that had to be destroyed.”
“Around 76 per cent of the materials from old equipment are now being used in new products. The aim is for materials such as copper, gold, silver, and aluminium to be separated using the latest technological standards and reused wherever possible.”
“Supporting our customers to retain the highest financial value while having minimal negative ecological impact is a great achievement for us. Our business model saves 30-40 per cent of carbon emissions in the use of the assets we lease.”
“To embed circularity into a business, it is important to partner with companies that add value to your business processes and focus on what you do best. Living on the credit card of our planet has limits and staying within a linear thinking mindset is unsustainable and will eventually impede growth. Therefore, we must take every opportunity to embed circular business models within our organisations.”
“To embed circularity into a business, it is important to make use of companies that add value to your business processes and focus on what you as a company do best. If you look to long term prosperity, living on the credit card of our planet has limits and staying within a linear mindset is not viable for future growth. The choices we make as companies have a much larger impact than we realise, and circular business models are a crucial element in committing to a more sustainable future.
Learn more about CHG-MERIDIAN’s circular technology model by visiting https://www.chg-meridian.com/sustainability"