SME are more likely to have a better environment

New findingsAston University’s study has shown that small and medium-sized businesses (SMEs), are more likely than large enterprises to adopt circular economies (CE) to improve their environmental performance.

CE is a systemic approach that promotes economic development. It benefits businesses, society, the environment, and everyone in between. A circular economy is designed to be regenerative and to gradually separate growth from finite resource consumption, in contrast to the linear model of ‘take make waste’.

Professor Prasanta Dey and Pawan Budhwar, both from Aston Business School, led the project. They were joined by Soumyadeb (Toulouse Business School), Krishnendu Sha (Birmingham City University), Krishnendu De [University of Essex], Debashree De (“University of Essex”) and Chrysovalantis Mensios (“Agricultural University of Athens”).

Data was gathered from around 100 SMEs from each of the four selected countries – Greece, France, Spain and the UK using a survey to study the current state of CE adoption, and subsequently, focus groups were organised which involved SMEs owners and managers, policymakers, SMEs’ customers and suppliers, in each country to derive means for improving sustainability performance.

The study shows that CE adoption is likely to improve environmental performance for SMEs in all countries. France’s SMEs are more likely to have a higher overall sustainability performance than other countries. 

It also found that the best products, processes, facilities, and design of facilities are likely to help SMEs adopt CE in all countries. However, waste management was lacking.

Professor BudhwarHead of Aston Business School, said:

“Although from prior research there is evidence of SMEs achieving superior environmental performance by adopting CE, economic and social performances are not assured. This motivated us to undertake empirical research to reveal the means for achieving higher sustainability performance (economic, environmental, and social) through CE adoption”.

“The findings of this research enable us to continue CE adoption not only in other European countries but also in India, Thailand, Vietnam and Kenya”.

Professor DeyProfessor in operations and information management at Aston Business School, Dr. Jeremy Sullivan said:

“SMEs in the EU countries are likely to have sustainable design practices aligned with the CE philosophy. However, SMEs in participating countries are more likely to have the worst recover function. This means that customers can pressure SMEs to adopt CE Principles as design function in most SMEs businesses. Whereas effective recover function depends on SMEs’ self-motivation and policymakers’ pressure.”

“CE adoption needs a structured approach of analysing current state of CE through analysing correlation of organisational value functions with sustainability performance, identifying issues and challenges, and suggesting means for improvement across value functions”.

You can view the complete report Here.

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