Top 5 Risks of Corporate IT Asset Destruction

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Summary: Technological advancements have accelerated the IT Asset refresh cycle. Since these assets at some point in time stored confidential information that is no longer needed, businesses need to be wary of any data leakage that can happen and take adequate measures to securely destroy all traces of data. Unsecure IT asset destruction poses several risks that can lead to financial, environmental, and legal complications. This blog provides an overview of the risks and shares tips to mitigate them.


IT assets in the digital world are a necessity for all businesses. Therefore, managing and maintaining a company’s IT assets is crucial to success, from small businesses to large corporations. However, with the rise of new technologies, companies must update their hardware and software regularly. It means these companies would have to get rid of their old data-bearing storage devices.

Organizations must follow secure data destruction methods like software-based erasure, degaussing, etc. to ensure the mitigation of risk and prevention of data leakage. Unsecure methods of data destruction can lead to disastrous situations imposing hefty fines and loss of brand repute. In this blog, we will outline the top 5 risks of corporate IT Asset destruction.

Risks Associated With IT Asset Destruction:

The risks associated with unsecure IT asset destruction can be categorized according to the segment they affect and the significant risks are:

Data Security Risks:

One of the top risks associated with corporate IT asset destruction is data security risk. When data is stored on physical devices, there is always the risk that those devices could be stolen or hacked. If the data is not destroyed securely, it could end up in the wrong hand leading to a data breach. A breach can have severe consequences for the company. Another security risk is that sensitive data could be accidentally leaked after data destruction is performed. For example, if hard drives are not adequately erased, the data on them could be accessed by anyone who finds them, leading to a privacy breach and damaging the company’s reputation.

Environmental Risks:

There are several environmental risks associated with corporate IT asset destruction. One of the most evident risk is the release of toxins and chemicals into the environment. It occurs when electronic components are burned or shredded, releasing harmful substances into the air. Another environmental risk is the release of greenhouse gases. Greenhouse gases are released when electronic components are incinerated. These gases contribute to climate change and can harm the environment. Finally, physical destruction of IT assets also lead to an increase in e-waste. When these components are disposed of, they generally end up in landfills, where they take up space and release hazardous chemicals into the ground as well as percolate to watertable downwards.

Financial Risks:

There are numerous financial risks associated with unsecure corporate IT asset destruction. One of the most significant financial risks arises in the event of a data breach owing to data security lapses. This costs an organization not just in terms of hefty fines & penalties but also in the form of loss of customer trust and impending data breach law suit. Additionally, the company may be responsible for any environmental damage resulting from its IT assets’ disposal and may find itself violating local and global environmental regualtions.

Regulatory Risks:

This brings us to regulatory risks of unsecure IT asset disposal. There are myriad regulatory risks associated with corporate IT asset destruction, out of them the most consequential risk is the potential for data breaches, as we have just discussed. Unsecure data disposal often leads to unauthorized access, subsequent identity theft and privacy breach. In addition, this data leakage violates data privacy and protection regulations norms.

Organizations ignorant of secure destruction, responsible recycling and reuse often tend to pollute the environment and add to the scourge of e-waste. Unwanted e-waste and environmental pollution creates trouble for such organizations and it becomes a regulatory risk as environmental watchdogs strictly penalize such delinquencies.

Operational Risks:

The operational risks of handling and securing assets during the destruction process constitute one of the major risks associated with corporate IT asset destruction. Asset tagging and maintaining a secure chain of custody are vital for maintaining the integrity and security of the data stored on the devices. There have been numerous cases where IT assets have ended up in unauthorized persons’ possession, leading to confidential information disclosure. It has led to massive data breaches and hefty penalties. The operational risks of Unsecure IT asset disposal can be as huge that a banking behemoth like Morgan Stanley had to pay multiple penalties for improper data disposal and ignorance of due diligence in selecting a third party IT Asset Disposition vendor.

Interesting Read:
Morgan Stanley to Shell Out $60 Million for Lapses in Data Protection

Morgan Stanley Bank Agrees to Pay $60 Million to Settle Data Breach Suit

SEC fines Morgan Stanley $35 Million

Tips for Avoiding the Risks Associated With IT Asset Destruction:

Avoiding the risks of IT asset destruction is vital for any business. These risks can be mitigated by following these tips:

Performing Secure Data Destruction:

IT asset managers must ensure that they perform data sanitization before they decide to destroy their IT assets. One of the best ways to ensure that is using a software-based approach that overwrites all the data on the device, making it impossible to recover. This method ensures that data security risks are mitigated successfully and data doesn’t fall into the wrong hands.

Maintaining a Secure Chain Of Custody:

Companies must ensure if they are outsourcing their IT asset disposal to a third-party vendor, a secure chain of custody is maintained for all assets. That means all assets must be adequately cataloged at all times. Proper procedure must be followed when they leave the company premises. The company must be able to verify and prove the ownership of these devices for any audit or regulatory requirement.

Promoting Reusability:

A business might deem its IT assets outdated, but these devices can generate value in the second-hand market. They can be sold or donated to schools, smaller companies with limited budgets, NGOs, etc. It can act as a source of additional income or help fulfill CSR mandates. These assets can be useful for many years to come and reduce the environmental impact of IT asset destruction. It will also help in reducing e-waste and pollution.

Following Regulatory Norms for Recycling:

E-recycling standards like R2V3, e-Stewards, etc. can act as a guiding force to ensure secure IT asset disposal and prevention of data security lapses. Complying with these regulations can go a long way in helping corporates safeguard against any regulatory scrutiny. Following these standards also ensures that the environmental impact of improper disposal and dumping in landfills is diminished substantially.

Choosing A Suitable Partner:

IT asset managers must ensure that they choose a certified ITAD (IT Asset Disposition) partner for carrying out IT asset destruction. An efficient ITAD can go a long way in helping corporates ensure safe, reliable, and environmentally sustainable practices of IT asset destruction.

Points to Ponder: Endnotes

Knowing the risks associated with IT asset destruction and the means to mitigate them can benefit corporates and businesses. Although it might seem that IT asset destruction is an ideal solution for disposing of outdated or unused equipment, doing so without taking proper precautions can lead to data breaches, environmental contamination, and other serious problems. By working with a reputable provider and following best practices, you can minimize the risks and ensure your business is protected.

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