Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:09] Speaker B: Welcome to ABCudos podcast, a series where we talk to players up and down the connected device supply chain. My name is Allison Mitchell and I'm the VP of Sustainability at App Kudo and the host of App Kudos podcast series covering industry trends, customer journeys, sustainability topics and more. If you have topics of interest or guests you'd like to hear from, send me an email@alison mitchellpcudo.com today I'm joined on the podcast by Tony Altman, Head of circular innovation for AppCudo. Welcome back to the podcast, Tony.
[00:00:39] Speaker A: Hi Alison, Nice to be back again.
[00:00:41] Speaker B: Well, this is your second time on the podcast, so I'm excited for our conversation today because we're going to talk about what our customers need when it comes to sustainability and device circularity, what we've been working on to help them meet their needs. And because we recently released our 2024 app Kudo impact report, we're going to hit some highlights of that too. You and I were both involved in and helping make that document come to life. When we get started on these podcasts, I like to talk about the background of the person that I'm interviewing. But since you've been on before, I want to do something a little bit different and I'd like to ask you what specific skill or parts of your background that you think helps you the most in your day to day role at AppCudo.
[00:01:24] Speaker A: It's probably my background in finance and have been an operator and understanding, you know, P and ls, you know, for a living for a long time and you know, in large part turning around renewable energy plants over the years because, you know, I learned very early that sustainability and renewables and, you know, the environment have to make sense for the CFO as well as the environment. And it's unfortunate, but decarbonization needs to make a profit, to really accelerate and I think that's, you know, a hard sell without those fundamentals. And I think there's a, you know, as an old sort of axiom, triple bottom line, really trying to, you know, do good for the environment, for society as well as the profitability for the shareholders, for the company and then of course the employees. So, you know, I learned that early through the renewable rubles field and through, you know, being an operator and you know, past life as a, as a CFO doesn't hurt.
[00:02:22] Speaker B: We appreciate that background and I think you and I make a great team. So let's start by zooming out for a minute and wrap our arms around the challenge that App Kudo is taking on through its mission, which is to ensure that technology which might otherwise languish in forgotten drawers and pollute our planet finds its way into the hands of those who seek to be connected.
[00:02:44] Speaker A: The topic of the day is really how do each day we kind of get up and think, how can we put a dent in that global E waste stream? And the emphasis on the word waste, because it's a real shame that such a small percentage of devices really get properly recycled and end of life. And our platform is a critical part of accelerating that reuse and refurbishment and proper disposal. So there's a huge opportunity, you know, to reclaim scarce resources in these urban mining of what's inside these phones, tablets, laptops, other electronics. Dimensions are huge. I mean, you're, you know, we're talking about, you know, 82 million metric tons by 2030, a 32% increase in the amount of e waste that is out there. So it's being generated and you need to solve this problem. It's, it's, it's huge. And marketing folks has really done the math is, you know, we need 2.3 planets by 2050, you know, at the current consumption levels and rates for the resources that we need. We have to reclaim these resources. We have to move away from the linear consumption model, take, make waste that we've, you know, had for 250 years. And, you know, there's 5 billion phones sitting out there in drawers and places that, you know, they're sort of hidden resources and they have, you know, huge amounts of gold, copper, silver, you know, rare earths. And our aim is to, you know, at Kudo is really to demonstrate that these can be reclaimed that, you know, as a critical circular industry platform. So that's our goal. And, you know, I think you and I get up every morning thinking, can we put a dent in that?
[00:04:25] Speaker B: So there's an obvious environmental impact. But what are some other impacts of this increasing global e waste problem besides the environmental? And I think you kind of hinted that a little bit about when you mentioned the rare earth minerals.
[00:04:39] Speaker A: Well, I think it gets back to this urban mining concept. I mean, obviously pollution is a big part of it, if you think about it. If they're improperly recycled phones or devices produce a thousand different chemical substances into the environment. So the environment is certainly a key part of that, whether it's air pollution or water pollution. But more importantly is we're dealing with scarce resources that have a huge geopolitical issue today and growing all the time in the way that oil was 100 years ago or even 50 years ago. E waste, you know, in the components that make up that rare earths particularly, you know, are going to be essential part of strategy. And you don't have to look very far to, you know, another geopolitical landscape to understand that. Because at the end of the day, right now only 70%, 17% of those electronics that you know, that are, that are produced are getting properly disposed. So one of the interesting statistics, with those 5 billion mobile phones, you know, you could recover $8 billion worth of gold if we could get to the more 10 million electric car batteries, you know, could have been made from those raw materials. So urban mining is critical, recovering security of supply onshoring. The opportunity there, I think is huge. And Cudo sits at the middle of that sort of intersection because how are you going to get all the stuff back efficiently, effectively, quickly get it back into use, or tear it apart and create the, you know, essentially reuse those raw materials.
[00:06:10] Speaker B: Those are some big challenges that can seem very difficult to take on from an individual company's perspective. And we have lots of different types of customers that we serve. So how do these different customers have the ability to move the needle on the problem of E waste?
[00:06:31] Speaker A: Well, when you think about our customer sets across lab Kudo and obviously, you know, certainly from the enterprise and recovery side, you know, there's, there's a huge up upswing there. But you've got OEMs manufacturers, you've got carriers, you know, who are really at the front end of the, of the process. You also have device processors who are taking them back and processing them. You've got insurance partners, you've got third party logistics providers, all of whom need to automate and create a super efficient process to bring all these devices back, decide what to do with them, put them and then send them in the right direction with the least amount of transportation, therefore the least amount of footprint. As you know, so much of the footprint comes from the manufacturing. So the OEMs have a big opportunity. I'd say they'd be number one in terms of who can really make a difference if they are working through a circular economy lens. So for them, for example, durability and repairability are key. There's so many new right to repair laws, including California, the eu. So longer lasting devices is a critical aspect to it. And device technology is leveling off. So an iPhone 12 has many of the same features and benefits that you have in an iPhone 15, no less than 16. So extending those lives takes data. It's a critical aspect. EPCoto provides the information that allows them to precisely figure that out. And so I think that's where we have a big opportunity. The other is really testing that software. We're in the middle of the software that goes into those phones and when they're refurbished. And so the ability of those phones to basically live across generations and not, as you may remember, not 10 years ago, if software upgrade or change to a device would have meant the device no longer really useful. It can't accept it's not, it's not doesn't have the capacity or configuration to run the new software. That's no longer the case if they're tested correctly when they're returned. So there's a lot there that is an impediment that we're trying to knock down. As far as carriers are concerned, who are really the primary retailer, they've got a different but similar set of goals. They're trying to get more reuse, more uptake by customers to return those devices. And so the return internal logistics, reducing friction at the front end, at the store level with the devices that, with the, you know, the kiosk and other devices and technology that Kudo has pioneered is really allowing those devices to get back faster and be tested literally on site. Sometimes that is a critical element of streamlining that, that full logistics process. So decision support for them up and down the ecosystem is critical. Similarly for device processors, of course, robotics are going to be critical that we've built. I think insurance partners are an interesting group. They need to make sure that these things are these things, these devices are returned as quickly as possible, but they're also be able to measure and manage that damage that might be there, whether they really are defective, what the value really is, because they're all about the financial value of that device if it's being returned as say a warranty claim or an insured claim. So they have a different set of needs that are also about visibility and critical financial information about rating of the phone or device. So again, unnecessary transportation emissions runs to emissions, but it also runs to cost for them. So that's one of the areas that I think you're going to see a lot of action. But from the enterprise view, I throw it back to you because you know so much about how we're maximizing value there by extending the life and securing that data. So I'll let you chime in on that one.
[00:10:25] Speaker B: Yeah, and enterprise customers kind of have a lot of overlap with those other types of customers that you mentioned in terms of their interests in Terms of extending the life of these devices. Therefore, to maximize the value for each purchase of device, they are trying to make sure they're continuing to operate very efficiently through their lifespan. And then because they have a vested interest in the data security component of, you know, what's contained on these devices, of that compliance, of getting employees to return them at the end of the life in that enterprise setting. So visibility of the data that's being collected, an easy return process, right. Frictionless is to increase the efficiency. But there's cost savings in all of that. That's something I was kind of hearing you say when you were talking about the carriers, the OEMs, even insurance providers as well, is that there's a huge overlap between focus on cost savings and sustainability and emissions reductions. If you're saving money, there's probably a sustainability impact. And likewise, and I think one of the common threads that kind of runs through this is it's about the data and the insights and that collaboration between the partners and that where App Kudo sits in this process and this relationship with all of these different types of customers is really part of that critical infrastructure for analyzing that data and getting insights from it and then being able to act on it in a way that maybe individually doesn't have as much value if all of this data is just provided in individual siloed ways. But App Kudos platform provides that visibility so that those insights can be shared across the ecosystem.
[00:12:18] Speaker A: No, I think that's, that's well said and I think the, you know, at the end of the day it boils down in many of these cases to what, you know, it might be called supply chain performance and efficiency. And that takes a lot more coordination, but a lot more, you know, real time information and sharing of information and insights. We like to think, I believe that we're turning sort of performance insights into environmental insights, sustainability, because they go hand in hand. And that's why you, it's essential to really understand them. Go back to the original question you had for me is like if you understand the finances, you know, and the beauty of our, you know, our platform and our robotics is they really have a, you know, rapid payoff for our customers. So they're, they're very happy from the operational, you know, OPEX and point of view, operational expenses, but it naturally leads to this place of greater, you know, environmental impact. So that's in common across these, these different verticals that we deal with every day.
[00:13:19] Speaker B: Most companies have publicly stated goals for preventing or minimizing their carbon emissions, but we also know, there's can be quite a gap between having goals and making progress on those goals and doing it in a way that companies can share publicly. What challenges are customers facing when it comes to either establishing goals or making improvements in ways that will help them achieve their goals.
[00:13:45] Speaker A: What I've seen over time, and what you see as well, I'm sure, is that there's kind of three sort of barriers that you see all the time are the availability of data itself and also sharing that data, trusting of data. So you have data but you trust it, and then ultimately communicating that both internally and externally in a way that people believe it and it's not greenwashing. And so, you know, data availability usually starts with establishing a baseline that is really understanding your processes at a pretty granular level, which is part of what AV Kudo is all about. And I think creating some clear goals and challenges internally to get that data and be willing to work to get that data. And then I think making it visible when it comes to environmental impact, what's being done with, you know, with that information and demonstrating it. So data availability is really, you know, I think a critical element. Trusting it is really number two. Can you really trust the data if you don't know where it comes from, what the assumptions are? Is it accurate, is it replicatable, is it reliable? You really have to believe in those sources. We like to believe we're a source of ground truth. And, you know, those assumptions have to stack up to reality of what people on the ground are seeing in their facilities. So the trust has to be established in those numbers, otherwise they won't be comfortable sharing it. So the last part of sharing and communicating, you know, that is really the dual part here is you get, you know, you've got to go external and internal customers. How are you going to share that with your internal customers? Are they buying into it from every department, from the CEO down, or is it just, you know, chief Sustainability officer, or is it really something that company believes in, you know, up and down the line from an operational point of view, people can get, you know, behind that, but they have to see it. And if you want to convert that to, you know, environmental impact, then they really have to understand it at that level to make sure that they don't feel their, their leadership is doing any kind of greenwashing. So that's really important for them to believe in it up and down the chain of the company. And that takes good presentations, takes detail, it takes champions, internal champions to take it forward. Externally, of course, you really have Much more scrutiny these days, all kinds of, you know, boards and you know, they're looking at, what are you saying? And you know, a huge pushback, you know, in general about sustainability in some quarters, you know, politically. And so you have to understand whims and winds of people to look at what's really happening. And that's, you know, that takes good information, it takes knowledge and you can't do with a lack of data. You need a lot of data and you need to be reliable. That's a lot of what I think, you know, companies have to do. It's visibility of those calculations, sharing, being open and transparent about it, about your assumptions and how you do it. And you know, when we did our, you know, analysis we'll get to in a few minutes about what EcoAct looked at, you know, our basically model for 2023 and 24 and the verification and really one of the big things that we found, you remember this is they felt very comfortable with what we did because of the transparency and the disclosure of all of the assumptions and all the methods used. And so often that's simply not the case. And so without that you can't create trusted data. So having available data available but not being trusted. So each of these things are a link in a chain. You can't do one without the other. So our customers are facing more and more complex regulatory, resource demands and political winds. And so we have to be more reliable and someone they can lean on in this space. And so I think we're, we're creating that strong infrastructure to do that.
[00:17:50] Speaker B: And the problem of E waste is getting people around the table, from around the industry to sort of take this on. Right? And we have the opportunity as appcudo because we are working with partners up and down the value chain and the supply chain to do that. One of the things that you found recently was this GSMA effort to bring together the top 16 carriers globally to do an increased effort for the take back of mobile phones. Can you tell me a little bit about that?
[00:18:23] Speaker A: Yeah, I thought that was really interesting because I think this is a good example of, you know, we have political wins and all these other things that go on swirling around too much regulation, not enough regulation.
And the carriers decided that because they see these statistics about what's happening and they don't want to, ultimately it doesn't do them any good to keep going down the linear path. So they made a commitment by 2030 to do two very important things. One is get to 100% of the devices that they sell will get collected back and really emphasize take vaccines. So These are the 16 top mobile carriers and they are this a big commitment? Because right now it's very, very low. The percentage that gets, you know, taken back and so making a 100% commitment that, you know, use mobile, mobile devices, but this will extend to laptops, tablets and other devices. Obviously eventually they get reused, you know, and get back into a controlled, you know, recycled facility and are disposed of correctly. That's a huge difference. And they want to make a difference. They realize it's how unsustainable 32% growth in E waste is over the next few years. And the second part was that they have committed to sell at least 20% of the number of new phones. 20% of that total new phone sales will be actually refurbished phones or reused phones. So the percentage there is growing dramatically. You know, I hear numbers north of 25% of all phones in not too distant future will be from that. So we're very, you know, it's gaining traction, particularly in the EU where refurbished and recycled devices, reused devices and reusable devices are really growing in attractiveness for a lot of reasons, not just price, but and a lot of us do with technology leveling off as well.
[00:20:17] Speaker B: That just illustrates that partnership that has to occur in the supply chain in order for carriers to be able to sell increased number of refurbished devices. They've got to be durable, they've got to be supported by software where that brings in the role of the oem. So the collaboration up and down the supply chain is just can't be overstated when it comes to the circularity of these devices.
So we have some examples, Tony, of some things that we've been able to do to help unlock sustainability success for our customers. So when it comes to data availability, there's an example that you and I are aware of that it was a little bit before our time, but it has a sustainability impact. Where a large wireless carrier was noticing some repeated returns within a 90 day window, that's called a bounce and they were noticing they had a high bounce rate. Can you talk a little bit about what APCUDA was able to do to minimize that and then the environmental impact that came from that.
[00:21:23] Speaker A: It's a great story and it's a great success story of what our benchmark and analytics team can do and what can be shared in real time with our customers. Their device processing There was probably 50,000 devices a month. They were getting a bounce back rate that was very high. I think it was more than 10 or 15%. And by that we mean it's being brought back for refurbishment. The same device being brought back multiple times. That's transportation, that's scope three emissions. It's not good for the environment and it's, you know, environmentally, you know, impractical and no less financially impractical. And so they wanted to figure out what was going on. And our analytics were able to pinpoint that they were able to reduce that by, you know, 20% within a very short period of time. And the total impact, when they look at the numbers for the year in terms of transportation and all the, and they had lost devices and so on, was I think in the order of like $20 million. So it was a huge uptick based upon, you know, obviously the environmental impact that goes along with that. And so, you know, measuring that financial impact, that operational impact and the, then the net resulting environmental impact are all coupled, you know, tripled together in a success story there. So that's the kind of success story we expect to see more of as we are able to share more data. So that gets back to sort of the data, you know, there's trusted data and as they trust us for data, then you use those insights to make decisions. So we are ultimately decision support and supporting some good use, good decisions.
[00:23:00] Speaker B: Well, speaking of trusted data, we had a current customer that was a leading financial services provider who's very drawn to working with appcuto because of the environmental impact and they're very sophisticated in this space. And when they reviewed our calculations and sort of how we come up with our impact data and how we share it with them in a real time basis, that helped the folks that were in the technology space that were in charge of managing these devices for this enterprise customer, it helped them sell that internally for the decision to work with app Kudo because they looked at our methods for calculating impact and the fact that we are very transparent and share those assumptions and share those calculations and where the source data comes from, that, that is sort of the engine for these calculations. It met their strict standards for transparency and being there, therefore being able to trust the data and feel confident that they could take our impact metrics and incorporate them into their, you know, corporate sustainability reporting. That was, you know, kind of validation for, for us in terms of the scrutiny we place internally for our processes and transparency that it, that it sort of passes the test of a very sophisticated customer and partner.
[00:24:26] Speaker A: That's a great point because that just speaks to, you know, as we build out the, you know, the inner workings of a strong, you know, Sustainability, circularity, infrastructure call the two of us are infrastructure, I guess you know, to be able to support that. You then can talk the talk and walk the walk with the most senior, most, you know, people responsible for this in the organization because you've performed operationally and you've made them money and you've made, you've reduced their opex and you can demonstrate to those who really want to know if there's a chief sustainability officer, et cetera, where's that impact and is it real? And we're passing mustard moving up that scale every day with senior folks at these companies which I think just raises our flag at Epcuto. And now we're global. So the interest in this is we both see just in the last six months as we have more and more global customers the interest is very intense about what people want and what they need to grow their business with us to support their own communications as well as their own stated decarbonization efforts. Net zero efforts that we can help drive.
[00:25:38] Speaker B: And then another example of ways we've helped our customers as it relates to communicating that impact that we're helping enable for our customers was a US based major airline that had had success with us for years in the recovery of their enterprise devices. But they needed a little help sort of communicating that within their organization, that internal communication. And you and I were able to come in and break that down and explain that to them and help them package that message for internal stakeholders within their own department, but then to other departments as well and also at the level of the individual employee, help them understand when their employer is asking for their device back in a timely manner. This is why it's data security. Yes, but it's also this environmental impact and they have a vested interest in, you know, the health and life of our planet as well as the health and life of their organization through data security. So helping them make all those connections to the internal stakeholders, that storytelling aspect of, of our job is, is part of it as well. Tony, one thing I want to ask you is we have been making some advances in the way we're meeting the needs of our customers and anticipating future needs of our customers. What are we looking forward to here? What have we been up to in the last year?
[00:27:04] Speaker A: Sure. So you know, last year, you know, we really continue to upgrade our model. You know, we, we work with Schneider Electrics division, Ecoact, which is, you know, a very, you know, well known player to you know, really dig into our, you know, our process. This year we're going to be Upgrading it again with them last year was more verification of what we had done and really tearing it apart. This year we're adding different modules they've recommended to increase the veracity and essentially the granularity of the model. We're also looking at new newly released methodologies that we've discovered, as you and I have talked about and discovered the last, just the last couple of months that are coming out on E Waste. So E Waste is gaining traction in a lot of places. We're working with customer reporting initiatives, building out very detailed customer dashboards so that they can have the insights that they want. APIs where they can see it in semi real time, real time if they really wanted to. And then customized impact studies that we talked about going on to going into facilities, really looking at that from a consultative perspective, built out an estimating tool that will allow, you know, sales teams and customers to, you know, on the fly be able to evaluate whatever they're going to process or, you know, a new facility or an extension of a facility to understand what the impact could be as well as potentially the energy cost savings. So looking out, you know, further productization efforts, carbon monetization are all on the horizon for us. And internally, I think we're going to, you know, we've talked about it. I think you have on your, your plate really some internal policies and education that I think could really be powerful because we need to basically walk the walk and talk to as a company, even though we don't have a necessarily big footprint because we're also a software company. Right. But, you know, obviously measuring what we're doing with Ecobottas or people like that, you know, I think our own, you know, understanding our own footprint will be important to our customers, actually. And then, you know, getting on potential industry standards boards that you and I have talked about, I think will be valuable to really play a role in changing the way the methods and approach to measuring, you know, the environmental impact of E Waste or E Waste avoided.
[00:29:21] Speaker B: Speaking of measuring the impact, we recently published our 2024 annual impact report. This gives an overview of the environmental impact that we enabled for all of our customers in the aggregate in 2024. And we've already touched on ways that we've been evolving and improving our methods, as you mentioned, with the support of EcoAct. I'd love to have us jump into kind of going over some of those key metrics that are shared in the report, the number of devices that we've processed and the impact that we processed on behalf of our customers. And the impact that that's had. What can you share from that report that's on our website now?
[00:30:02] Speaker A: We have a lot to be proud of. And we processed 16 million devices, which is, you know, a 14, 15% increase over the prior year. But, you know, the number of devices is, you know, represents 6,100 tons of E waste that did not go to landfills. So these are big numbers. You know, we had almost 1.1 million tons of CO2 emissions that was avoided. And to put that in perspective, because everyone says, what is that? What is, what is 1 million, you know, you know, metric tons of CO2 really mean? You know, the comparison there would be sort of the energy use of 136,000 homes in the US for a year, as an example. So that's substantial. And you know, it's not a, it's a small city, I suppose. So the, the water savings also was substantial, you know, putting that in billions and billions of gallons. But it's, there was about 548,000 homes for a year. So water savings, tremendous amount of water gets avoided when you don't build a new device. And interestingly, something that we've really started to pay more and more attention to is the value of the minerals and metals and other components, particularly rare, as we talked about before. But just the gold alone in the avoided devices was about 250,000 grams of gold, or about $23 million worth of gold. That was at the price about two months ago. It's probably even more than that today. That puts in perspect of what's going through our, you know, our processing systems and lines today. So, you know, that's, those are pretty exciting numbers, you know, in terms of how that compares, you know, you know, as I mentioned, we're up 14 to 15% on the tons of E waste avoided, but we reached 26% increase in carbon emissions avoided. And that's due to the mix of the types of devices that went through our systems, but also the greater number of devices that end up getting refurbished and reused versus recycled and end of life. So there's a number of factors that go into that that make it, you know, not tied to just the number of devices going up. And then, you know, the water savings, as I mentioned, was about 20% a year over year growth. So, you know, doing really good things for customers that, and they're seeing it and they're expanding and, you know, that means that we're doing good for their bottom line and, and the environment.
[00:32:25] Speaker B: It is increasingly important to be in this space right now, given the metrics that we started at the top of the podcast with in terms of the consumption rate, the demand for these rare earth minerals to satisfy needs we have for connected devices, as well as other things including electric car batteries and things. So this is really a critical moment both from that environmental perspective and from a geopolitical perspective to address these big and growing global problems. And it's always fun to be, you know, working alongside you and others at AppCudo to really work on these really big global problems. It's very satisfying to feel like we're facing up to that challenge and working with our customers to deliver solution to help them from a cost perspective, efficiency and, you know, environmental footprint. But that contributes to this larger problem. Well, it was great to have you on the podcast today, Tony. Thanks for joining us. Thanks for being a repeat customer here on the podcast and I'm sure we'll have you on again.
[00:33:33] Speaker A: Thanks to you and thanks to all the hard work you do to move that mission forward as well, because I know how passionate you are about those things and it takes a village, you know, and I think we're building that. So, you know, back at you.
[00:33:48] Speaker B: Thanks. Well, and thanks to our listeners for tuning in to today's podcast session. Hopefully you learned some interesting facts about the E waste problem and about what we're doing to help our customers punch back on that problem. If you have any feedback or ideas, don't forget to send me an email. Allison Mitchell.com thanks again for joining and have a great day.
