THE USE OF TOOLS AND TECHNIQUES FOR CIRCULAR ECONOMY IMPLEMENTATION BY SMES: AN EXPLORATORY STUDY

The circular economy is a key issue for any company, city and institution. The linear economy model, which is based on taking, making, using and wasting products and resources, has discarded potentially valuable resources and... [ view full abstract ]

The circular economy is a key issue for any company, city and institution. The linear economy model, which is based on taking, making, using and wasting products and resources, has discarded potentially valuable resources and caused serious pollution problems, making the model unsustainable and pressuring governments to define concrete climate action commitments at COP23. In contrast, the circular economy (CE) model is a strategic paradigm whose purpose is to regenerate and conserve resources through closed material loops and the sustainable use of energy in processes.Nevertheless, implementing the CE involves barriers and challenges for society and companies, especially for those who are embedded in a linear economic model. The application of CE principles requires a change in the way companies operate, but it also involves new opportunities and benefits. Some companies are applying different tools and techniques on their path to implementing circular economy principles for innovating their products, services and processes, and they are achieving promising results. Small and medium enterprises(SMEs) are particularly relevant because they represent 95% of all firms in the OECD area, and in the European Union, they constitute 99% of all businesses,but they have limited resources and they are also often limited by the requirements of big companies (which are frequently their direct customers).Such circumstances make the adoption of CE principles particularly difficult.The main objective of this study is to identify a set of tools and techniques which may be used by SMEs to adapt to the CE principles. To that end, this paper presents an exploratory study of the specific tools and techniques used by companies in Spain. The only criterion in selecting the companies was that they had to have a basic level of environmental management maturity, supported by compliance with legal requirements and having been awarded an environmental certification. This way we could ensure that we selected tools from companies that are working on environmental management. More than 20 practitioners,mostly managers and employees from middle-management levels representing different companies and departments, were interviewed to obtain information about their company’s application of the circular economy and the tools they are using for that purpose. To analyze the interviews, we used a technique called content analysis, where coding categories are obtained from the data. The most relevant result of this study is that we identified a set of tools and techniques that could help SMEs to improve and develop more sustainable processes and products.This study’s contribution is that it provides important guidance to SMEs that facilitates the adoption of eco-innovation practices and the transition to a circular economy.