Resource Efficiency Through Circular Economy in European SMEs

This study investigates the drivers of resource efficiency practices adoption by small and medium-sized enterprises (SMEs) in the European Union. Using data from the Flash Eurobarometer 498 survey on a sample of SMEs across 27 EU countries, multilevel random intercept probit regression models are estimated for nine resource efficiency actions: water savings, energy savings, renewable energy use, materials savings, switching to greener suppliers, minimizing waste, selling scrap materials, recycling, and eco-design. Results show that SMEs’ characteristics like economic activity sector, dimension, age, type of market served, as well as country-level factors such as population density, GDP per capita, unemployment rate, education level, air quality, and environmental taxes significantly influence the probability of adopting circular economy and sustainability practices. The findings highlight the need for targeted policies tailored to specific SME profiles and national contexts to accelerate the transition towards a more resource-efficient economy in the EU.