The circular economy and opportunities for small businesses

By Francesca Culcasi from SWITCH-Med, Josephine Kohl and Anais Mangin from SEED

Current ways of production and consumption are not sustainable, disregarding the efficient use of natural resources, the minimization of toxic materials and the emission of waste. However, green alternatives become more and more visible and enterprises in emerging and developing countries are innovating with greener products and services. They are playing an important role in the shift towards a green economy, to find a way to harmonically and respectfully create a more Sustainable and Systemic Change to truly stepping forward to the so called Circular Economy.

The circular economy, where we increasingly recover the materials and energy from used products, is becoming more and more important in the international development agenda. This pioneering and thrilling concept is seen as a solution to tackle the current and global environmental, social and economic challenges that current economic models fail to address. Predominating principles of industrial production follow a linear system true to the motto “Take, make, dispose”. A system that is unsustainable by nature. The circular model challenges this conventional system by shifting towards business models that are intentionally renewing. It focuses on creating new opportunities and jobs especially for MSMEs based on resource efficiency, use of biological materials which can be returned as such to nature, eco-design techniques and other innovative tools. Since products are kept in use, the embedded energy, materials and labour are preserved.

Social and green enterprises as the driving force of a Circular Economy

Social and green entrepreneurship is considered as one of the main engines playing a relevant role within the complex systemic process enabling a more Circular Economy. Its key drivers, the social and green entrepreneurs, accelerate the transition anytime they convert their ideas into feasible and viable enterprises. The core business of their enterprises is mostly environmentally and socially oriented rather than purely economic. They offer products or services to reduce environmental impacts and create social values through the use of innovative, effective and efficient business models and natural resources. Their work concentrates on sustainable sectors such as renewable energy, waste management, recycling, organic food or eco-tourism.

On the other hand, social and green enterprises will benefit from a more circular economy since it brings different stakeholders together to reach a common goal. In a real circular economy:

• Policy makers will focus on integrating more sustainable production and consumption patterns into national and international action plans.
• New policies and laws will simplify and support the creation of new green and social businesses.

• The transfer of knowledge and high technology will result to be easier for more people, from different backgrounds.
• Alternative financial resources, more SMEs oriented, will start spreading up.
• A strong awareness flow will raise so that consumers will be more prone to increase the demand of sustainable products and services.

Examples of MSMEs with a circular economy approach

A circular economy offers MSMEs opportunities to engage in a range of industries and especially in the waste management sector.

EcoPost (Kenya)

Photo credits: EcoPost

EcoPost – “Fencing Posts from Recycled Post-Consumer Waste Plastic” is a Kenyan-based social and green enterprise that recycles waste plastic into aesthetic, durable and environmentally-friendly fencing posts. The enterprise aims to address some of Kenya´s main challenges in the area of waste management, deforestation and unemployment. Kenya generates over 10,000 tonnes of garbage everyday but the lack of an organised system of waste management has resulted in crude dumping of the waste leading to heaps of garbage littering streets and open fields. In addition, the country faces massive and rapid deforestation. This is particularly alerting since Kenya´s land mass is covered with less than 2% by forests. When it comes to unemployment, some 500,000 of Kenya´s youth (8% being graduates) enter the job market every year with limited employment prospects.

The efforts of EcoPost have proven to register remarkable ecological and social impacts. So far, EcoPost has withdrawn over 1 million kilograms of plastic and saved an estimated 250 acres of forest. Plastic recycling also saves 2.5 kg CO2/kg plastic resulting in the prevention of 2,500,000 kg of CO2 emissions further mitigating climate change. In addition, the enterprise recruits its factory employees from nearby slums providing them full time permanent jobs. Given this opportunity, many of them managed to move to better locations and make a living wage. EcoPost mainly receives its used plastic from waste collectors around Nairobi, most of whom were homeless with few prospects. Including the waste collectors, EcoPost employs over 300 people who would otherwise be living in poverty.

EcoPost is a winner of the 2010 SEED Award – an annual awards scheme by the SEED Initiative, designed to find the most promising, innovative and locally led start-up social and environmental enterprises in countries with developing and emerging economies.

ECO OLEO (Tunisia)

ECO OLEO is a Tunisian company collecting and recycling used cooking oil which is used throughout the country collected from hotel chains and restaurants to bring them in line with respect of law 96-41 and ISO14001 environmental certification standards. Eco Oleo Environment is a purely ecological purpose company whose primary mission is the protection of the environment including the collection and recycling of used food oils to produce a biodegradable and nontoxic fuel. The enterprise has been able to create relevant impacts in the social and environmental realm. The company is engaged in developing better living condition at the community level and of its employee’s families through the creation of new jobs. On a green level, ECO OLEO´s work has contributed to a reduction of 1,200 tonnes per year of used cooking oil into the drainage systems and in the units of waste water treatment.

These examples show how MSMEs in developing and emerging countries are contributing to the shift towards the green economy. However, such systemic change requires a more holistic approach, a high commitment coming from different stakeholders, who need to understand that the only way to reach a better and common lifestyle is to truly act together.

SWITCH-Med - Switching Mediterranean economies

SWITCH-Med has made its key task to step forward to a circular economy. The EC funded SWITCH-Med programme is aiming to promote a switch of the Mediterranean economies towards sustainable consumption and production (SCP) patterns and green economy. It is being implemented in the context of renewed interest for regional cooperation in the Mediterranean in the wake of the important political changes occurring in a number of Southern Mediterranean countries. These changes will only be sustained by a real economic integration which is itself conditioned by the mainstreaming of SCP among consumers, small and medium-sized enterprises and Mediterranean policy-makers.

2014 SEED Africa Symposium - Truly acting together

The SEED Africa Symposium, taking place on 10-11 September in Nairobi (Kenya), presents a great platform to realise this collective-oriented approach. The Symposium is a unique forum for businesses, policy makers, civil society and support institutions to share their knowledge and experience, explore partnerships, and develop solutions to stimulate the growth of social and green entrepreneurship in Africa. More than 250 representatives will convene and discuss solutions to build an effective ecosystem for social and green enterprises. On this occasion the new 2014 SEED Award Winners will be announced. As a partner of the Symposium, SWITCH-Med will host an interactive session in which it highlights successful approaches and lessons learnt in building such effective ecosystems. Here you can learn more about the speakers attending this session and the genera....