How can SMEs collaborate with other stakeholders to create circular value chains?

2 Why is circular economy important for SMEs?

SMEs are often more exposed to the risks and uncertainties of the linear economy, which relies on the extraction and consumption of finite resources and generates large amounts of waste and emissions. SMEs may face higher costs for raw materials, energy, and waste management, as well as lower margins and market share due to price volatility, competition, and regulation. By shifting to a circular economy, SMEs can increase their resilience, profitability, and innovation potential, as well as contribute to the global goals of climate action, biodiversity protection, and social inclusion. According to a study by the European Commission, circular economy could create 700,000 new jobs and save €600 billion for European businesses by 2030.

3 How can SMEs collaborate with other stakeholders to create circular value chains?

SMEs can benefit from collaborating with other stakeholders to create circular value chains, such as joining or forming networks and platforms, participating in or initiating collective actions, adopting or developing standards and labels, and integrating or offering circular economy services. For example, the European Circular Economy Stakeholder Platform, the Circular Plastics Alliance, the European Remanufacturing Network, the EU Ecolabel, and the Cradle to Cradle Certified Product Standard are all ways SMEs can engage in collaboration. Additionally, services such as maintenance, repair, refurbishment, remanufacturing, leasing, and sharing can extend the functionality and value of their products.

4 What are the barriers and solutions for SMEs to adopt circular economy?

Despite the potential benefits and opportunities of circular economy, SMEs may also encounter barriers and challenges when attempting to implement it in their operations and strategies. These may include a lack of awareness and information, skills and capacities, or finance and incentives. To overcome these issues, SMEs can seek advice from online sources or local organisations, invest in training and education for their staff, or collaborate with external experts. Additionally, they can explore various sources of funding from public or private institutions, as well as advocate for policy changes that enable and reward circular economy.

5 How to get started with circular economy for SMEs?

Circular economy is a tailored and flexible strategy that depends on the specific context and goals of each SME. Therefore, SMEs must learn by doing, experimenting, and adapting when initiating their circular journey. A good place to start is assessing their current situation and identifying their circular potential through tools like the Circulytics tool or the Circular Economy Business Model Canvas. SMEs should then set their vision and objectives for circular economy based on their core values, mission, and strategy, in alignment with relevant frameworks and goals. Developing and implementing a circular action plan, based on priorities, resources, and capacities while involving stakeholders is also essential. SMEs should use the R framework or the ReSOLVE framework to guide their actions according to reduce, reuse, recycle, rethink, regenerate, or restore strategies. Lastly, evaluating and communicating their circular results through indicators and metrics such as the Circular Economy Scoreboard or the Material Circularity Indicator can help measure and monitor progress. Additionally, stories and cases like the Circular Economy Case Studies or the Circular Economy Examples Database can be used to showcase achievements, challenges, and learnings.