How to become a Green SME in a Circular Economy


The ‘circular economy’ is gaining momentum as a concept in both academic and policy circles, while circular business models have been linked to significant economic benefits.

Numerous barriers can hamper the implementation of ‘circular’ and ‘green’ economy practices by SMEs that can originate, for example, from the SME enabling environment, such as culture and policy-making, from the market chain in which the SME operates, such as behaviour of suppliers, and from lack of technical skills and finance.

EU Policy Context

The circular economy is a broad, overarching concept encompassing various materials, products, processes and actors within different stages in product and value chains. There is thus a wide range of existing policies relevant to all these different circular economy stages. The concept is also present in several strategic EU policy documents such as the Resource-efficient Europe Flagship Initiative of the Europe 2020 Strategy and the 7th Environment Action Programme.

The Green Action Plan for SMEs

The Green Action Plan (GAP) for SMEs was adopted by the European Commission on 2 July 2014 – together with the Circular Economy Package – with the purpose of “enabling SMES to turn environmental challenges into business opportunities”. It follows the policy direction that was set by two other important documents: the Europe 2020 Strategy and the Small Business Act. The former sets clear targets for the EU to become a sustainable economy, while the latter states that the EU should help SMEs seize the opportunities created by the new economic paradigm that is the green economy.

Objectives of the GAP:

  1. to raise SMEs’ awareness of resource efficiency improvements and the potential of the circular economy for productivity, competitiveness and business opportunities;
  2. to inform SMEs about EU resource efficiency actions under the COSME,Horizon 2020 and LIFE programmes, and the European Structural and Investment Funds.

The GAP aims to help businesses by:

  • improving productivity
  • driving down costs
  • supporting green entrepreneurship
  • developing European leadership in green processes and technologies.

You can read more about the GAP by clicking here.

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