Markets can fix the issue. But the market may need regulation to ensure externalities are captured. E.g. taxing energy and recycling costs, and taxing based on expected lifetime (e.g. a tax that reduces the longer full repair warranty you offer).

For the "taxing recycling cost" we have an example in the case of bottles. Norway for example has a reducing bottle tax that starts at a certain rate for non-recyclable drinks containers or containers that are recyclable but aren't. The tax rate then drops proportional to your proven recycling rates, and falls away completely if your rate is high enough. Having distributors take back failed products is great, but it's insufficient in that they have no reason to encourage consumers to return broken products, and often have a strong disincentive to (they end up having to pay or the transport and recycling).

Basically, we should expect companies to either make society good for environmental externalities related to their products, or pay what it costs society to make other arrangements, so that these costs end up getting priced into the products so we can make our buying decisions accordingly.