ESRS E5 – Resource Use and Circular Economy

Material Impacts, Risks and Opportunities

E5. Resource Use and Circular Economy

Policies Related to Resource Use and Circular Economy (E5-1)

Bittium’s policies related to resource use and circular economy include the sustainability policy, environmental and energy efficiency, procurement policy and Supplier Manual. The Management Group is responsible for the implementation of these policies. As the majority of the customers who purchase Bittium’s products and software require compliance with ISO standards, Bittium’s environmental and energy efficiency policy is based on the ISO 14001 and ISO 50001 standards and the current legislation concerning the environment, energy efficiency and sustainability. Procurement plays a crucial role in Bittium’s sustainability and success. The procurement policy sets out the basic principles, guidelines and procedures that guide Bittium’s procurement and supply chain operations. The procurement policy covers 10 topics: an established procurement base, quality assurance in procurement, cost efficiency, risk management, ethics, sustainability, confidentiality and safety, local sourcing and diversity, compliance, governance and continuous improvement. Bittium Supplier Manual is a publicly available summary of the core requirements Bittium has for its suppliers, that has been established to enable the basis for transparent and productive collaboration with our suppliers. These requirements are applied to existing and new suppliers alike.

The sustainability policy, the environmental and energy efficiency policy and the procurement policy aim to minimize the environmental impacts of Bittium’s operations, which arise throughout the value chain from products designed by Bittium.  The aforementioned policies are available to stakeholders on Bittium’s website. A description of Bittium’s policies related to sustainable procurement and the use of counterfeit materials is described in the Supplier Manual, which is available for all Suppliers on Bittium’s website. The procurement policy covers all of Bittium’s operations and relevant geographical areas. The sustainability policy and the environmental and energy efficiency policy cover Bittium’s own operations in all relevant geographical regions and the entire value chain. No direct stakeholder consultation procedure has been applied in the preparation of the policies, but the company aims to minimize social, health-related and pollution-related adverse impacts on stakeholders by means of operating guidelines related to topics such as primary production, the quality and origin of materials, component production methods, conditions and sustainable procurement, for example.

Bittium strives to minimize the environmental impacts of its operations and products. Bittium strives to identify, eliminate and reduce potentially hazardous substances used in products and production activities. Bittium Supplier Manual requires its identified critical suppliers to have an environmental management system that meets the requirements of the ISO 14001 standard.  Supplier Manual includes requirements also for energy efficiency, the use of renewable resources, the avoidance of harmful substances and the minimization of emissions from production processes. 

Bittium operates in a strongly regulated business environment. The company monitors the global environmental requirements for products related to the Group’s operations as well as the country-specific regulations derived from the global requirements. Compliance with these requirements and regulations is also required of the Group’s identified critical suppliers. Examples include the RoHS Directive (use of hazardous substances in electronic equipment) and the REACH Regulation (use of hazardous chemicals), for which compliance is a requirement in the EU market. The requirements of the WEEE Directive, which governs the recycling of electrical and electronic equipment, have been taken into account and applied in product design since 2002.

Bittium’s policies do not address transitioning away from the use of primary resources, nor do they address the use of secondary resources. The environmental policy guides the company to seek and define more environmentally sustainable and energy-efficient solutions related to product development and manufacturing, but these topics are not specifically addressed under it. The use of renewable resources is specified as a supplier requirement in the Supplier Manual, but Bittium’s policies do not set requirements for the sustainable procurement of renewable resources. The link between Bittium’s policies and the material resource use and circular economy-related impacts, risks and opportunities is described in the E5 summary table at the end of this section.

Actions and Resources Related to Resource Use and Circular Economy (E5-2)

Bittium’s actions related to resource use and circular economy in 2024 consisted of the implementation of continuous operating models for each reporting year. Product design activities, the procurement of parts and product maintenance activities, as well as appropriate recycling, are annual and regular processes that take into account the reduction of the environmental impacts of products over their entire life cycle.

Bittium’s most significant continuous actions related to resource use and circular economy consist of sustainable product design, which includes designing products so that their lifespan is as long as possible, as well as the serviceability of products and their appropriate disposal or recycling. The actions cover Bittium’s suppliers, its own operations and maintenance and repair of delivered products in all relevant geographical areas. Bittium’s products are designed for maintenance and repairability throughout the product life cycle. Maintenance and repairs are carried out either by Bittium’s own maintenance and repair service or by the customer’s organization. For products designed to be reparable, the aim is to make the structure modular and easily reparable in such a way that the product can be repaired at the component level. The same automatic testing equipment is used for repairs as in the product manufacturing process, which accelerates the repair process and makes it easier.

The product design takes into account potential future product features with regard to physical hardware and software products. For example, in product architecture design, the aim is to anticipate customer needs concerning different frequency variants of products and wireless and radio connectivity-related solutions, which extends the lifespan of the product family. Bittium extends the lifespan of certain critical product families and, consequently, the amount of waste through product lifecycle Mid Life Upgrade (MLU) programs, which enable customers to maintain their purchased systems by purchasing individual system components and thus avoid buying a new system.

The availability of the components used in the products is ensured by End of Life (EoL) purchases if necessary. This way, the potential withdrawal of a component from the market does not lead to unplanned changes in configuration for products in customer deliveries. EoL purchases also guarantee successful maintenance and spare parts deliveries in the long term, ensure long product lifetimes and reduce waste. At Bittium, reuse of technical solutions mainly takes place within product families, which means that selected sub-assemblies can be reused in several products sold as part of the product family in question. This reduces the number of component items used, which, in turn, increases material efficiency. Bittium also aims to implement the choices of materials for mechanical assemblies in such a way as to cover the technical specifications for as wide a product range as possible.  For maintenance purposes, the company reserves components that enable the extension of the lifespan and life cycle of devices. As a rule, research and product development activities use the same components as Bittium’s other products. The company also aims to utilize product sub-assemblies.

Products targeted at the defense market, in particular, are subject to strict requirements set by the defense industry. These requirements include durability and operability in varying temperature conditions, for example. The durability of Bittium’s products meets demanding standards, such as the MIL-STD-810 series of standards and the MIL-STD-461 standard (U.S. Department of Defense Test Method Standard and U.S. Military Standard).

Bittium also has an ISO 13485 certified quality management system for medical devices that meets the requirements of the EU Medical Device Regulation (MDR) and is certified according to the Medical Device Single Audit Program (MDSAP).

Bittium requires its suppliers to comply with the national and international environmental legislation applicable to their operations and the products supplied to Bittium. Evidence of compliance with the requirements must be provided to Bittium upon request. The supplier must, at Bittium’s request, be able to verify the implementation of environmental actions and report information that can be used to assess the carbon footprint of the product.  The supplier must ensure that it is able to provide, upon request, information on the substances contained in materials. The supplier must have a control and monitoring system to ensure the traceability of the finished product or product batch to the factory and the traceability of the materials used to their source. The supplier must obtain acceptance and approval for processes and materials, and changes thereto, in accordance with internally documented quality procedures. Changes must be communicated to Bittium before they are implemented. In the component selection stage, regulatory compliance is determined by means of surveys sent to the component supplier. If necessary, compliance is confirmed by conducting tests on the materials.

Action plans and actions related to ecologically sustainable product and service design, recycling and compliance are part of Bittium’s continuous business operations and the personnel, administrative and material expenses involved. The implementation of the action plans has not required significant separate capital expenditure or operating expenditure.

Actions related to resource use and circular economy during the reporting period are described in the E5 summary table at the end of this section.

Targets Related to Resource Use and Circular Economy (E5-3)

During the reporting year, Bittium did not set targets for resource use or circular economy in accordance with the ESRS standard. In spite of not having ESRS-compliant targets, Bittium monitors the effectiveness of the policies and actions relative to the material impacts, risks and opportunities with the help of targets and metrics that correspond to the sustainability strategy and support the improvement of material efficiency and energy efficiency.

Bittium’s recycling-related targets are based on compliance with the requirements set by current legislation. Bittium’s operations are also influenced by producer responsibility and the related reporting obligations regarding packaging and electronic waste. 

Bittium’s recycling targets are linked to integrate circular economy principles into operational activities by 2027. For example, in packaging products, Bittium utilizes all suitable packaging waste collected from incoming deliveries. Some of the packaging material is also ordered directly to the contract manufacturer for use in Bittium’s product deliveries all the way to the end customers.

Establishing targets related to resource inflows, resource outflows and waste in accordance with the ESRS standard, and metrics suitable for monitoring these targets, is part of a longer-term data collection and information management development effort, and Bittium has not yet set an exact schedule for the completion of this effort.

Resource Inflows (E5-4)

Bittium’s resource inflows consist largely of components purchased for Bittium’s production activities, as well as sub-assemblies and other parts used product manufacturing. The inflows do not include raw materials as such, but raw materials are contained in components. Bittium also purchases materials required for product packaging and protection, as well as equipment required in production. Bittium’s processes do not involve significant water consumption. No biological materials are used in Bittium’s operations.Property, plant and equipment used in Bittium’s own operations and its value chain include buildings, machinery and equipment required for production processes.

With regard to the environmental impacts of the value chain, the production of raw materials – such as metals and plastics – is emphasized in component production. As Bittium does not engage in direct procurement of raw materials, instead purchasing raw materials as part of components and sub-assemblies, the company’s opportunities to influence raw material production are realized through supplier agreements and procurement policies.

Resource inflows consist of metals, such as aluminum, steel and copper, as well as plastics and silicone seals, and electronics, such as resistors, capacitors, transistors, memory chips and batteries. The information provided does not include packaging materials, as exact information on packaging materials is not available and their quantity is relatively small.

Information on the European Union defined rare earth metals or critical elementals used by Bittium is not available. The systems used by Bittium do not allow for the separation of these substances from the weight data of the incoming materials.

Reporting on the inflow of materials is based on the total number of products sold. The information on the Medical business segment has been collected from a report extracted from the company’s ERP system (L7), and missing weight data has been partially estimated by buyers. The Defense & Security business segment’s weight data has been compiled on the basis of the product database (PLM) and the number of products sold. The Engineering Services business segment does not engage in material procurement of its own, nor does it sell any products. The segment’s business model is based on intangible assets provided by product design and software development services, in which know-how is transferred instead of physical products.

Resource Outflows (E5-5)

Products and Materials

Bittium’s resource outflows consist of products designed and manufactured by Bittium for the measurement and remote monitoring of biosignals, as well as wireless and embedded solutions for the defense and security markets, related parts and packaging materials used for product transport and protection. The key elements from the perspective of product durability and repairability are the selection of End of Life (EoL) components, taking serviceability and repairability into account, and long product life cycles.

In Bittium’s business, principles of circular economy are illustrated in the durability, reusability, repairability, dismantling, refurbishment and recycling of products. The long lifespan requirements for products targeted at the defense equipment sector illustrates product durability very well.  Typically, the intended lifespans of defense industry products can be up to decades. The products are not designed for remanufacturing but are recycled through waste management.

The instructions for the medical devices created by the Medical business segment’s production process include disposal and recycling instructions. The use of recycled materials is not allowed in medical devices, as the devices must have an equivalent level of performance to that of a corresponding new device (Regulation MDR 2017/745/EU). The estimated durability is determined by the durability of the batteries used in the devices. The legislation governing medical devices requires that the lifetime of each device be estimated and that tests be conducted to demonstrate that the device maintains its performance and safety for the specified lifetime.

If a product must be disposed of, components that are sensitive with regard to information security, such as circuit boards and memory cards, are processed in a manner that is appropriate for each product and agreed upon with the customer. Some mechanical components may also require separate processing. If the product is disposed of by Bittium, a separate certificate of disposal is sent to the customer. The recycling of medical devices manufactured by Bittium is mainly carried out by the customers who purchased the product, in accordance with the recycling instructions provided on the product packaging.

Due to the purpose and customer base of the Defense & Security business segment’s product families, these products cannot be sorted and recycled in the same manner as normal consumer electronics. Bittium is committed to receiving and recycling the products it manufactures through appropriate channels, as required by producer responsibility. However, due to requirements related to the products’ information security and customer base, only few products used in the defense sector or healthcare are returned to Bittium for disposal. The entities that have purchased the devices prefer to recycle or dispose of the products through their own channels.

The lifetime of products in the Defense & Security business segment is extended by Mid Life Upgrade programs. Customers can maintain the systems they have acquired by purchasing individual system components instead of having to buy an entire new system. Product design also takes into account the modularity of products within product families, which improves material efficiency, increases repairability and reduces the potential amount of waste.  Service agreements concluded with customers specify the level of service and maintenance. These agreements can be used to proactively estimate the amount of spare parts needed, which affects the amount of materials purchased. At present, the customer requirements do not allow for the use of recyclable materials in the products. Consequently, long lifespans and serviceability are the key circular principles for the Defense & Security business segment.

In 2024, Bittium further developed the life-cycle services and after-sales maintenance of its products.

The medical devices of the Medical business segment are designed and manufactured to be durable and reparable. Single-use accessories are used with reusable devices. Considering the safety requirements for medical devices (patient safety), a single-use device can be seen in some situations a better alternative in terms of durability than reusable devices that need to be cleaned using strong detergents. The aim of material choices is to minimize impacts on the environment and users.  Bittium strives to dimension the availability of spare parts in such a way that serviceability for the intended lifespan can be ensured. Bittium offers a maintenance and repair service for some of its medical devices, in which the housing, battery and USB connector of the device are replaced.

The durability of Bittium’s products has been calculated on the basis of the long service life of the product, including product maintenance and product support.

The information provided by Bittium on product durability and repairability is based on measurements, collected product lifecycle data and calculations. The information is not reported at a more precise level due to business and information security risks related to product information. 

The metrics do not include the proportion of recyclable material in products or packaging. For products, the use of recyclable material is regulated either by specific regulations or by customer standard, and there is currently no precise data available for packaging to break down the information.

Waste

The waste generated by Bittium’s production activities mainly consists of sorted packaging waste, which is recycled with the help of a selected waste management and recycling partner. The packaging waste consists mainly of cardboard, paperboard and various plastics, such as polystyrene and other plastic products used for product protection. Substances that are considered to be hazardous waste and used in production activities include various adhesives, pastes and epoxies. Waste volumes are monitored by waste category at the annual level.

The following calculation method has been used for all of the figures in the table above: Information on waste has been obtained from waste reports prepared by waste management partner. For Tampere and Espoo, waste data has been obtained for the entire property in which the premises are leased, and Bittium’s share has been calculated on the basis of the the square footage of the rented space. For the business premises located in the United States and Germany the waste amounts have been calculated based on the total amount of waste per person in Finland and multiplied by the number of people working abroad.

Waste recovery types have been itemized in the reports received from different sites. The percentage of non-recycled waste has been calculated by dividing the amount of non-recycled waste by the total amount of waste. Other recovery operations for non-hazardous waste include the incineration of mixed waste as energy in waste-to-energy plants and biowaste from Bittium’s Kajaani site, which is processed into biogas at a biogas plant. Of Bittium’s waste, 0.02 metric tons of pallets are reused. Consequently, there is no overlap between recycling and reuse. Bittium’s operations or products do not generate radioactive waste.

E5 summary table of the relationships between impacts, risks, opportunities, policies, actions and targets