➤ Samsung aims to use recycled materials in all mobile devices by 2025.

➤ Any company not incorporating sustainability into the design and decision-making process is not going to stay in business that long.

➤ Recycled metals represent a big opportunity for Samsung.

Samsung Electronics America Inc. recently announced a series of climate initiatives, with a goal of increasing the amount of recycled plastics used in its home appliances from 5% to 30% by 2024. The company also has a goal of incorporating 500,000 metric tons of recycled materials into its products by 2030. S&P Global Market Intelligence spoke with Mark Newton, Samsung's head of North America corporate sustainability, to discuss Samsung's climate and sustainability efforts as well as its successes and challenges. An edited transcript of that conversation follows.

S&P Global Market Intelligence: Can you tell me a little about your background?

Mark Newton, Samsung's head of North America corporate sustainability Source: Samsung

Mark Newton: So let's start with how I got here. I'm a scientist; I've got a PhD in chemistry. I came out of the University of Texas and got hired right away by Motorola, back before there were cellphones. And one of our customers in Europe sent us a nasty-gram saying, "Do you know that there's hex chrome and cadmium and stuff like that in your products? We ground them up." So we're like, "One, why did you grind up our products? And two, no, we didn't know."

It turned out that we just didn't know what was in any of our products. Back then, we designed just for performance. And so, pretty quickly, we were able to solve that one problem. But then I started up a little team, and we started to think about the stuff that our products were made of. And that turned out to be one of the first design-for-environment programs in the electronics industry.

What is your role at Samsung?

I'm responsible for our corporate sustainability in North America. About 3.5 years ago, there was no function in the U.S. for Samsung on this issue. It was dealt with by a team, which I led, but it wasn't a sole function. However, we've always had a corporate sustainability function in Korea. The big areas that we focus on are really the product and sales; the operations, so our physical location here; and then also our engagements, so engagements with policy folks, with issue advocates, with communities and also with our employees. So that's kind of my role. I'm a connector. I work very closely with all the teams here to help them integrate sustainability into their business plans. We have a very integrated approach and that's by design. It's my experience that if you don't have an integrated approach to these issues, then it just doesn't work. It's not "sustainable."

I think about sustainability as externalities that are not on the balance sheet. So, if we're not incorporating it into the decision-making process, we're not going to stay in business that long.

How were your efforts around sustainability impacted by the pandemic?

There have been a number of impacts. Let's just sit back and think of it from a very macro standpoint. The parts of the world that are most at risk of COVID are also the ones that are most at risk to suffer the worst consequences of climate change. They're also the ones that tend to be left out of the 5G equation and connectivity. If nothing else, it's helped us to really zero in on the fact that not all populations are the same, and we really have to think about this from an equity standpoint.

And it's also very hard to keep staff in a manufacturing facility. We're fortunate we are extremely vertically integrated, which means that we own our own manufacturing. So we are actually in a better situation to control our workforce, but we're still very dependent on the supply chain. And so it's been very disruptive to getting parts, to logistics, all of that. This is not anything new, but it's definitely impacted our business. We've had to get really smart about how we manage through that and think a lot more about resilience in our supply chain and in our operations.

What is a company like Patagonia Inc. doing collaborating with a company like Samsung?

We make washing machines. We make laundry products. Patagonia makes fleece and other products that shed microfibers. It turns out that both of our companies really have aligned our sustainability strategies to address the climate crisis. And, in fact, almost everything we do really ladders up to that, right? And then what really made it happen is that we both independently realized that this is way bigger than any individual sector, certainly any individual company can deal with. Patagonia has been rattling along for years working through industry consortia and issue advocacy groups in order to try to get a handle on the problem. They got to the point where there's only so much they can do and it needs an integrated solution. So, I think it just naturally came together. We still haven't really got it all together in terms of our business relationship, but we are aligned in purpose and we are continuously progressing, and I think it will lead to a partnership. It's just a really exciting time to bring that energy together.

Samsung has partnered with fashion designers in the past to use sustainably sourced materials for smartwatch bands.

We have an eco-design process at Samsung to evaluate the life-cycle impacts of all the products that we design. Through that process, we're always looking for improvements. We've got key performance indicators, not just to measure that stuff but also to move forward on it. And so for things like recycled content, we've already used about 270,000 metric tons of recycled plastics in our products. And we've got a target to almost double that to 500,000 metric tons by 2030. That's a lot of plastic. So we're always trying to find ways to meet those goals. And we're doing it through integration of novel materials into accessories, into wearables and into our products themselves.

Besides the microplastics, we recently made an announcement about integrating ocean plastics. So we're working with a group of companies that are helping us source discarded fishing nets to keep them out of the ocean. It's a real problem. Even getting one of those out of the ocean is a good thing. But we've got an opportunity to get thousands of tons of that material out of the oceans and into our products.

You are planning to incorporate recycled materials into all of your new mobile products by 2025. Where are you starting from in terms of getting to that goal?

We're looking to utilize as much recycled material as possible in the product itself. More than half of our materials use metals. And some of these metals are hard to come by, especially in battery materials. So we have to get way better at getting that material back. So I'm hoping that we're going to start to dial up our programs on incorporating recycled metals back into our products. I think that's a really big opportunity for us. And I know we're already doing it, but I think there's a big opportunity for setting some really hard targets and holding ourselves to it.

The packaging is really important, too. Most people throw that stuff away. So eliminating single-use plastics in our product packaging is another big part of our mobile goals. We're pretty far down the road as far as the packaging goes, somewhere like 95% plastic-free. The last 5% — there's a film that's actually on the screen, and nobody wants to get a scratched product. The difference between the S21 and the S22, our newest version, is it still has that protector, but it's a recycled material now instead of just virgin plastic. I'm thinking, why not put a screen saver on the product so it's not even like a peel-off, throw-away thing? I don't know if they'll listen to me or not, but that's what we're trying to do in mobile.

Also, we've made a commitment to be zero-waste in our mobile operations. And these are energy-using products. Depending on the type of product, you can have as much as 70%, 80% of your total life-cycle impacts in the use phase of your product. Mobile is closer to 20% to 30%, but for things like home appliances, it can be 70% to 80%. And so another commitment we've made is to strive toward zero standby for power. And that would be not just for cell phones, but anything where we would plug in a power brick, even TVs. I would say our mobile team is ahead of the curve for our entire company. And a lot of our best practices are being worked out there and then brought back.