Mapping Circular Economy in Portuguese SMEs

Abstract

The transition from a linear to a circular economy is an increasingly popular solution to the dual problems of scarcity of virgin resources at the point of extraction and the exponential growth of waste at the point of disposal. The linear economy adheres to a model wherein natural resources are extracted, transformed into products, utilized, and ultimately discarded as waste. In contrast, the circular economy is designed to promote sustainability. This is achieved by reducing the use of raw materials, waste, reuse, recycling, and recovery of materials at the end of the useful life of products. The result is a closed and regenerative cycle that preserves natural resources and minimizes environmental impacts. The manner in which each country and company responds to this reality is markedly disparate. This research endeavors to ascertain the strategies employed by Portuguese SMEs in addressing this challenge. A review of the literature was conducted to ascertain what has been published on this subject. However, the results of this review indicate that the existing literature does not fully address the intended topic. The articles identified in the literature review only partially address this issue, focus on other geographical regions, or in some cases, are dedicated to specific business sectors. In light of the dearth of research on this topic, we turned to the Portuguese context, employing the Grounded Theory methodology to conduct semi-structured interviews with 34 SMEs. Upon analysis of the results, it became evident that the circular economy is not yet a prerequisite for consumer choice. Portuguese legislation does not facilitate the implementation of the circular economy, consumers are not yet engaged with the issue itself, companies face challenges in communicating their practices, and there is a perceived lack of credibility by consumers. Additionally, the cost–benefit ratio is not always favorable for such practices.