Small and medium enterprises facing the challenge of circular economy

27 June 2019

Green energy, energy transition and circular economy are the cornerstones of the environmental sustainability process. The protagonists are businesses, but even more the man, personally involved in sharing these values. This was also the subject of the study Small and medium enterprises facing the challenge of the circular economy, promoted by the Ministry of the Environment and Protection of the Territory and the Sea and carried out by the University of Bologna in collaboration with Bologna Business School, with the objective to understand what actions have put in place Italian companies, in particular the Small and Medium Enterprises (SMEs), and how they cope with the challenges and opportunities generated by the circular economy.

The study was divided into three phases. In the first, a qualitative/quantitative analysis was conducted, including the realization of 5 interviews to European entrepreneurs, the administration of structured questionnaires on sustainable entrepreneurship and the creation of two focus groups with 18 participating companies. In the second phase, a statistical survey was conducted on a sample of 209 Italian SMEs. During the final phase, two focus groups were conducted in order to receive feedbacks from companies on the empirical evidence that emerged during the survey, to integrate the results of the quantitative analysis with further qualitative details.

Almost 85% of the analyzed companies are under 15 employees, with an average turnover of 1.4M euros. The industrial sectors most represented are plant engineering (41%), followed by mechanics/manufacturing (35%), personal services (13%), tourism (7%) and ICT (2%).

Particularly interesting is the analysis aimed at understanding the correlations between circular economy practices, their adoption and some enabling factors. With regard to the main barriers, it is interesting to note that the adoption of best practices is negatively correlated to the perception of sustainability as a cost and to the lack of regulatory coordination, both at local and European level. About the enabling factors, instead, the implementation of circular economy practices is facilitated by a support process in finding raw materials with low environmental impact.

The “waste” theme therefore plays a central role in the circular economy and in the present research. It is necessary, in fact, to carry out actions aimed at reducing the production of waste that cannot be reintegrated into a production cycle and at the same time increasing the capacity to recover and enhance the waste that, on the contrary, can be regenerated. The reference legislation must provide clear indications on “what is waste and what is not”, and on which materials can be enhanced as a second raw material and which, on the contrary, must be disposed of in landfills.

The results show that the most developed practice is separate waste collection, implemented by 84% of analyzed companies, followed by packaging recovery/reuse (38%), implementation of energy saving projects (32%), monitoring impacts in air/land/water (32%), and by the development of products or services that favor energy saving (31%). The remaining practices show a level of implementation of less than 20% of the cases, with minimum values ​​relating to the collection/reuse of sewage and/or rainwater (10%) and environmental certifications (eg ISO14001 / EMAS) (12%).

With regard to the activities the companies declare they want to implement in the next two years, energy saving projects (40%), the development of productive processes with a low use of resources (36%) and the introduction of environmental criteria for the selection of suppliers (33%).

In general, the circular economy practices are not widely developed among the analyzed SMEs, with the exception of the differentiated collection of waste, which however deserves a separate treatment as its high diffusion can be distorted by regulatory constraints and impositions. The most active sectors on circular economy issues are the mechanical/manufacturing sector and plant engineering.Furthermore, the research also shows how the circular economy can represent a real business opportunity for companies, especially medium and small ones.

The opportunities offered by the circular economy are numerous, not only for the reduction of waste and pollution, but also in terms of less exposure to risks by the business system, such as, for example, the volatility of raw material prices and supply processes. To facilitate the transition from a linear to a circular economy model it is necessary to rethink the value creation process by designing new business models that are able to capture all these elements through an integrated and systemic approach. Investments are also needed in technological innovations and information tools and incentives that help spread the culture of sustainable development, which is at the base of the circular economy.

Caviro, a leading national company in the wine sector, was the object of the study as it developed a completely circular business model. Through multiple transformation processes, Caviro manufactures and markets products for the food, cosmetics and biomaterials sectors. The entire production process is powered by energy derived from the process itself through the use of anaerobic biodigesters and the impact of production on the natural environment is tending to zero.

To ensure compliance with sustainability practices, a change of culture and targeted training on these issues are required. Culture, also understood as education to the sustainability of citizens, customers and end consumers in order to create a common knowledge, a civic education, starting from the ruling class, which must focus on the awareness of the citizen.

To achieve this goal, the Global MBA in Green Energy and Sustainable Businesses trains young professionals by adding the dimension of sustainability to the role of manager. Working on six pillars (Accountability, Ethics & CSR, Law, Sustainability Oriented Innovation and Green Strategy, Entrepeneurship), the program provides the tools to support the efficiency of existing resources and to plan new productive ecosystems based on sustainable business models

Adapted from:
“Small and medium-sized enterprises facing the challenge of the circular economy”
Matteo Mura and Mariolina Longo, Department of Business Sciences, University of Bologna


Back To Top