New study shows that businesses that embrace the circular economy are more likely to have a positive impact on the environment.

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Circular economy (CE) adoption by small and medium-sized businesses (SMEs) is likely to improve environmental performance, according to new research from Aston University.

For enterprises, society, and the environment, CE is an economic growth strategy that works. When compared to the linear paradigm of "take-make-waste," a circular economy seeks to progressively divorce growth from resource use.

Prof. Prasanta Dey and Professor Pawan Budhwar from Aston Business School directed the study with the help of Soumyadeb Chowdhury, Krishnendu Saha, Debashree De, and Chrysovalantis Malesios from the University of Essex (Agricultural University of Athens). More than 100 small and medium-sized enterprises (SMEs) in Greece, Spain and the United Kingdom were surveyed in order to gain an understanding of the current state of CE adoption, and focus groups were held in each of the four countries in order to identify ways to improve the sustainability performance of SMEs.

In all participating nations, SMEs are expected to improve their environmental performance by adopting CEs. France's small and medium-sized enterprises (SMEs) were found to be more environmentally friendly than those in other participating nations.

In addition, the study indicated that SMEs in all participating nations were most likely to embrace CE if they improved their goods, processes, and facilities design.

Head of Aston Business School Professor Budhwar said: "Research shows that SMEs may improve their environmental performance by adopting CE, but this does not mean that their economic and social performance is guaranteed. This prompted us to conduct empirical study in order to uncover the ways in which CE adoption might improve sustainability (economic, environmental, and social) on a global scale."

To continue CE adoption in other European nations as well as India, Thailand, Vietnam and Kenya is now possible according to the results of this study.

According to Aston Business School's Professor Dey, who specialises in operations and information management:

"Sustainable design methods associated with the CE concept may be expected from EU-based small and medium-sized enterprises (SMEs). SMEs in participating nations, on the other hand, are expected to have the poorest recovery function. Since the design function in most SMEs' firms is controlled by SMEs' consumers, this indicates that customer pressure helps SMEs embrace CE principles. SMEs' self-motivation and the pressure of policymakers are necessary for successful recovery."

CE adoption necessitates a systematic approach to examining the existing status of CE by looking at how various organisational values relate to sustainability results, in order to identify problems and provide solutions.