SMEs struggling with circular economy, suggests new report


Small- and medium-sized businesses in Britain, France and Belgium do not understand the circular economy, according to a report from Fusion Observatory.

Funded by the European Union, Fusion aims to support an eco-innovative mindset in SMEs and start-up businesses and support them to become sustainable.


But its research found that 48.5 per cent of SMEs had not heard the term circular economy, while 25.3 per cent were not sure what it meant. Only 9.2 per cent of the 231 companies understood the term and thought about it context of business.

With 60.5 per cent of companies saying they repair or recycle where they can, the UK was ahead of both France (44.2 per cent) and Belgium (39.5 per cent) on this measure.

But with 18.4 per cent of companies in Belgium saying they were looking to design out waste, this was higher than UK (14 per cent) and France (9.6 per cent).

When questions on which businesses were most likely to benefit from the circular economy, 22.9 per cent thought waste management companies would gain most, followed by manufacturing (19 per cent), construction (14. 6 per cent) and design (9.4 per cent). Finance (0.5 per cent), consultancy (2.4 per cent) and ICT/Media (2.9 per cent) were perceived as least likely to benefit.

Packaging materials were expected to show the greatest potential from the circular economy with paper/card highest at 14.3 per cent, followed by aluminium cans (11.5 per cent), and plastic (11.3 per cent). These packaging materials were then followed by rare earth metals (11.2 per cent), glass packaging (10.7 per cent) and WEEE (10.3 per cent).

The main reason for not adopting circular economy business models was cited as lack of time with 20.8 per cent of respondents blaming this. Next was applying the principles to our business with 14.2 per cent and regulation 12.4 per cent.

To get businesses to see the circular economy as more relevant to them would require quantifying the practical economic benefits (23 per cent), creating incentives for small business to adapt (17 per cent) and understanding how to fund this new business model (15 per cent).

View the full report here