Brussels, 30 September 2021 – Small and medium sized enterprises (SMEs) hold the key to the circular economy. What is blocking their innovation potential and how can it be fully unleashed?
SMEs are widely recognised as the backbone of our economy. It is increasingly acknowledged that they are also vital players in the transition to a new economy that is low-carbon, circular and inclusive. “While targeting multinationals in the most polluting sectors to create mass scale is valid and necessary, it covers less than half of the total picture because SMEs have the largest footprint and are much better at realising sustainable solutions, which are already successful on a small scale”, says Ecopreneur.eu Chairman Manfred Mühlberger.
The paper shows that SMEs form a very diverse group of enterprises of sustainability leaders or “ecopreneurs” (3%), fast followers (21%) and reactive enterprises (76%). Their innovation potential to introduce and mainstream sustainable business models is blocked by many obstacles such as lack of demand, additional costs, and the complexity of circular design.
To unleash their full potential and realise the European Green Deal’s objectives, Ecopreneur.eu recommends launching regional circularity hubs, active engagement of ecopreneurs as front-runners, 100% green implementation of the European Recovery Plan, introducing innovation funding and subsidies that are attractive to SMEs, and enacting progressive EU legislation such as a mandatory gate-to-gate Life Cycle Assessment (LCA) for all companies. “But most of all, we ask the EU to start rewarding ecopreneurs by introducing economic incentives based on so-called true pricing to create a level playing field”, says executive director Arthur ten Wolde.