Morgan Stanley did not prioritize R2 recycling — and it ended in disaster. In this video, GER President Kristina Picciotti weighs in on the importance of working with the right electronics recycler.

Nothing underscores the importance of R2 recycling more than the recent Morgan Stanley data breach. The multinational financial services company and investment bank terminated a contract with its trusted ITAD partner in favor of a company with no experience in the business of sanitizing end-of-life IT assets.

Now, Morgan Stanley is facing a class-action lawsuit. In this video, GER President Kristina Picciotti explains why R2-recycling is so important and what it takes to become an R2-certified electronics recycler. You can also read a transcription of the Q&A below.

Q&A: 7 questions to Kristina Picciotti about the significance of R2 recycling

1. What were the main mistakes that Morgan Stanley made to land the firm in so much trouble?

“When I read the articles, it appears they tried to put profit before privacy. And I think whenever a company decides they are going to try to monetize their ITAD program over and above the security and compliance of people’s data, that’s mistake No. 1. So, you can certainly monetize an ITAD company but it can’t be the main goal. 

Another mistake is that there’s a good possibility that they didn’t have a written plan as to how they would handle the destruction of people’s data once it left the facility. And if they did, somebody didn’t follow it.

So, it’s really important to have a documented plan in place of how you’re going to require your ITAD vendor to handle your data, whether it’s going to be wiped, destroyed, or otherwise. It seems like that was all tossed aside just to make money.”

2. What went through your mind when you first heard of this issue?

I try not to laugh because it’s not a laughing matter but I see it all the time when companies decide they will go with the cheapest solution possible. I don’t care what industry you’re in — when you go with the cheapest possible solution, you’re going to get the cheapest outcome. It reminds me of so many other times when we’ve spoken to customers and potential clients and what they’re looking for is either the cheapest solution or the most money out of their product with no other thought process in mind. And there has to be another goal. So, it was kind of laughable that such a large firm would compromise on something like that.”

3. Why would an R2-certified recycler have been a better choice?

“R2 recyclers are held to a higher standard. We’re audited every year and it takes a great deal of work to get certified and retain that certification. To become R2-certified, we have to demonstrate that we know how to handle data — destroying it, sanitizing it and we’re held accountable for that. So, an R2-certified recycler has to perform those methods of sanitization and destruction or they don’t stay certified.”

4. What sets a certified company apart from a non-certified?

“An R2-certified has a set of standards to follow. A non-R2-certified company can say they do those things — they can say, ‘We’re R2 recycling compliant’ or ‘We sanitize data and we destroy data’ — but there’s really no proof to back it up, so they don’t have those same methods in place, and they certainly don’t have the accountability that we have. When you have a third party coming and monitoring and making sure you’re doing it right, it’s not the same as someone saying they’re doing it.”

5. What does it take to acquire the certification?

“It’s a long process. It takes a lot of time and a lot of money. There’s a lot that goes into it. First, you have to create an entire system of how you operate and, when you do that, every single aspect of your operation is documented through a standard operating procedure, including forms and things to back up exactly how you plan to adhere to the standards. That’s individualized by company but it still has to meet the R2 recycling requirements.

Then, an auditor comes in and looks at that documentation to make sure it looks correct and that it demonstrates what you’re going to do. Then they come into your facility and they are on-site for several days or even several weeks, depending on the size of your site. They monitor and watch what you’re doing and how you demonstrate that you’re doing what you’re saying. It applies to environmental, security, quality, so you have a lot of aspects of your business that you’re accountable for. It’s not one of those things you get online one day and ‘Jeez, I’m going to get a certification’ and — boom — you have a certification. It’s much bigger than that.

You can imagine an IRS agent being in your building for days on end and watching every single thing you do — it’s a lot like that. They do that every single year and, to back it up, they want to see physical, written records how you performed your data sanitization, how you sent commodities out the door to make sure we’re doing right as an R2-certified company. “

6. You also point out that certifications are just the beginning. Can you elaborate on that?

“The certifications basically tell you we’re compliant. But there’s so much more to it than that. We take the client accounts very seriously. So, we start by getting to know you and there are a few questions we ask upfront to make sure we’re meeting your needs. One of the main questions we ask is, ‘What is what’s the single most important thing to your company? Is it environmental? Do you want to be environmentally friendly? Environmentally compliant? Do you want to get the most money out of your product? Is it data security?’

And although of all those are important, usually, people have something in mind when they call us. We identify that first and then we go through a series of discovery where we understand the product, goals, and how they expect this program to be delivered to them. We go above and beyond to make sure we build a relationship with the company that begins with trust but ends in complete satisfaction.”

7. What’s your final takeaway?

“R2-recycling is so important because we’re just held to a higher standard than non-R2-certified companies. It gives our clients peace of mind knowing they don’t need to follow us around the building watching us shred, or dismantle, or repair, or remarket. They know we’re doing it right because we’re held to that higher standard.

Thanks for watching — and reading! Please don’t hesitate to reach out. We’re here to help you make the most of your retired electronics.

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