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Circular Economy 101: how small businesses can make a big impact

06 Sep 2023

So, what exactly is a circular economy?

It's all about reducing waste and keeping resources in use for as long as possible. Rather than using resources and then throwing them away, a circular economy encourages businesses to find ways to repurpose, recycle, or reuse materials.

EG Circular Economy article

Here are some ways that SMEs can build a circular economy:

Reduce waste in production: By finding ways to use fewer raw materials or repurpose waste, SMEs can save money and reduce their environmental impact.

For example, a clothing manufacturer could create cool new patchwork products using leftover fabric scraps. Or a restaurant or food manufacturer could compost organic waste and create nutrient-rich soil for their gardens or sell the compost to local farmers.

Design for reuse and recycling: By designing products with their end-of-life in mind, SMEs can create products that are easier to recycle or reuse

For example, a furniture maker could design products that can be taken apart and recycled at the end of their life. Or beverage company could use glass or aluminium cans instead of plastic bottles.

Implement a closed-loop supply chain: By creating a closed-loop supply chain, SMEs can reduce waste by reusing and recycling materials within their own ecosystem. Businesses can implement a reverse logistics system to recover products or materials from customers at the end of their life or promote product sharing, such as through rental or leasing services, to maximize the use of products and reduce waste.

For example a clothing manufacturer could offer a take-back program where customers can return their used clothing for recycling or upcycling, or jewellery maker could create unique pieces using discarded materials

Create a product take-back program: By creating a program where customers can return products at the end of their life to be recycled or repurposed, SMEs can reduce waste and promote sustainability. For example, a technology company could create a program where customers can return old electronics to be recycled.

Furniture companies could offer take-back programs for used furniture to promote material recovery or refurbishment. For example, IKEA offers a furniture take-back program where customers can return used furniture for recycling or resale.

So, there you have it - SMEs can make a big impact when it comes to building a circular economy. By reducing waste, designing for reuse and recycling, implementing closed-loop supply chains, creating product take-back programs, and using renewable energy sources, SMEs can help create a more sustainable future for us all.

Find out more about circular economy here:

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These knowledge articles have been developed in collaboration with the European Bank for Reconstruction and Development (the EBRD). The EBRD is committed to supporting small and medium-sized enterprises’ sustainability efforts and accelerating the transition to clean energy in the regions where it works. For more information about how the EBRD can help your business’ journey to net-zero, please contact your regional office found here.

EBRD is partnering with I-GO Assistant to support SMEs’ sustainability efforts with a free-to-use resource efficiency assessment and navigation tool designed and managed by the Green Industry Platform.

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