2007 Corporate Social Responsibility Report

Taking Responsibility for End-of-Life Products

We understand that eco responsibility starts with the design of our products and extends through to the end of their useful life. The environmental impact of the growth in unwanted electronic equipment around the globe is becoming widely recognized:

• Some of the materials used to make electronics, although only present in small amounts, can contaminate land and water if dumped into landfill.
• Computers contain natural resources that cannot be replaced and should be reused or recycled if possible.
• Burgeoning populations and increasing consumption are putting great strain on existing waste disposal systems around the world. In some countries, there is little waste management infrastructure to cope with their emerging economies, and overflowing landfill sites have serious public health implications.

A large-scale response to the growth of electronic waste is needed, and we're taking responsibility for end-of-life Sun products through our global product takeback program. We encourage customers to return old Sun equipment to be reused, remanufactured, recycled, or safely disposed of.

We initially created our takeback program to comply with the European Union (EU) Waste Electrical and Electronic Equipment (WEEE) Directive and similar state laws in some parts of the U.S. But we believe that offering a takeback program to our customers — no matter where they are in the world — is the best way to reduce the environmental impacts of our end-of-life products, so we're continuing to improve our program. In some parts of the world, we're still developing the required systems to collect and process the waste, so the program is stronger in regions where we must comply with regulations.

The Challenges of Global Takeback

Given our global scale, Sun's product takeback program faces a number of challenges. The biggest is being able to offer the service to customers anywhere in the world in a cost-effective way and without negating the eco benefits of recycling. Economically, we can't set up processing centers in every country where we do business. But shipping within a region isn't always cost effective either. It can cost significantly more to ship something from Singapore to China (approximately 1600 miles/2600 km) than from Singapore to California (roughly 8500 miles/13600 km). Yet while it's more cost effective to send the product to California, transporting it thousands of miles by airplane and truck can significantly reduce, if not cancel out all together, the environmental benefits of reuse, remanufacturing, recycling, or safe disposal.

Another challenge is to raise customer awareness of our global takeback program and have more product sent back to us. We're confident this will be less of an obstacle as we improve our collection mechanisms and customers seek to demonstrate their own eco responsibility. But this gives rise to another conflict — the more product we take back, the greater the cost of implementing the program. We continue to encourage our engineers to design innovative, eco responsible products that can be easily and cost-effectively reused and recycled at the end of their useful life. Additionally, we're constantly seeking ways to effectively track the materials that come back to us through different return streams so that we can accurately report this data and use it to further improve our program.