Study: Half of companies surveyed said that circular economy is at hand, but it comes with challenges and hurdles

According to a study carried out by Flip, the young Romanian start-up that encourages circular economy by refurbishing phones and tablets, which it reintroduces on the market as new, about the degree of familiarity of Romanian companies with the principles of circular economy, 55% of client companies and 50% of companies in the general population state that it is within reach to apply at least one of the principles of the circular economy.

This is especially noticeable among companies with 10-49 employees (62% among companies that are Flip’s clients and 59% among companies in the general sample).

Challenges or obstacles in the adoption of circular economy

However, although viewed with optimism generally speaking, the main challenge encountered in the adoption of circular economy is the low availability of products and services in this category (33% for Flip customers and 41% for the general sample) followed by resistance to change (27%) among Flip customers, while among the general population the second biggest challenge is financial in nature (30%), but closely followed by the aforementioned resistance to change (29%).

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The perceived obstacles to adopting more responsible consumption practices among Flip customers are: familiarity with current procedures, lack of resources and knowledge, financial and regulatory obstacles. Among the general population, they are the lack of resources and knowledge in the field, financial obstacles, familiarity with current procedures and low availability of products and services.

Differences in perception for companies of different sizes

Moreover, depending on the size of the companies included in the study, there are differences in the importance of obstacles, so that for the companies in the overall sample:

• 44% of small companies say reliance on current procedures or resistance to change are challenges, compared to 50% of medium-sized companies and 37% of large companies;
• Low availability of recyclable/refurbished products is a challenge for 42% of small companies, 48% of medium-sized companies, and 58% of large companies;
• 37% of small companies see an obstacle in partnerships, meaning the degree of openness of other companies to these approaches, compared to 45% of medium-sized companies and 58% of large companies.

So is the case of Flip client companies participating in the study, as well: there are differences in the perception of obstacles in adopting the principles of circular economy depending on the size of the company:

• Financial aspects, such as more expensive purchases or longer-term recoupment, are perceived as a challenge by 36% of small companies, as compared to 33% of medium-sized companies and 58% of large companies;
• Unlike companies in the general population, resistance to change or reliance on current procedures is a bigger obstacle for small companies (48%); for medium-sized companies the percentage is 38%, and in the case of large companies, it drops to 33%;
• Lack of resources and specialized knowledge in the field of sustainability and circular economy is a challenge for 43% of small companies, as opposed to 33% of medium-sized companies and 38% of large companies.

Overall, the study reveals a greater openness to identify and implement solutions to reduce environmental impact specific to the circular economy among small, entrepreneurial and medium-sized companies. This can be explained in part by their higher flexibility, but also by the desire to save and have a more environmentally friendly approach.

The study was initiated by Flip and carried out by iZi data, on a sample of 631 companies from Romania, of which 262 are Flip Business clients, from micro-enterprises to SMEs and corporates. While completing the survey all study participants were exposed to the definition of circular economy. The data collection took place between April and August 2023, and the data collection method was quantitative research through online interviews (CAWI).