Closing the Loop: UAE’s journey towards a circular economy
As the global economy continues to grow, so does our consumption of resources. We are extracting natural resources at an unsustainable rate, creating various environmental problems such as pollution, climate change, and habitat destruction. One solution to these problems is the circular economy, which aims to eliminate waste and make the most out of resources.
A circular economy is an economic system where resources are used and reused in a closed loop, reducing waste and pollution. In contrast to a linear economy based on the take-make-dispose model, a circular economy is designed to be regenerative and restorative by keeping resources in use for as long as possible.
SMEs play a crucial role in the transition to a circular economy. SMEs are the backbone of the UAE economy, accounting for around 94 percent of all businesses and 86 percent of employment in the private sector. Therefore, their participation in the transition is essential.
Reduce: It is the first and most effective way to create a circular economy. It involves designing products and services that require fewer resources to produce and that produce less waste. SMEs in the UAE can reduce their environmental impact by using energy-efficient technologies, promoting sustainable practices, and minimizing packaging waste.
One example of an SME that has taken steps towards reducing waste is "The Green Eco Store" in Dubai. This store sells eco-friendly products such as bamboo straws, reusable bags, and natural cleaning products, reducing the amount of single-use plastic and chemical waste in the environment.
Reuse involves finding ways to extend the life of products and materials. SMEs in the UAE can promote reuse by adopting circular business models such as rental, resale, and refurbishment. This way, they can reduce the environmental impact of their products and create new revenue streams.
One example of an SME embracing the reuse principle is "The Luxury Closet," an online marketplace for used luxury goods. The company allows customers to buy and sell designer handbags, shoes, and accessories, giving these items a second life and reducing the demand for new products.
Recycle: The third pillar of a circular economy is recycling, which involves turning waste into new products. SMEs in the UAE can promote recycling by implementing waste management programs and adopting sustainable packaging practices such as recyclable materials, reducing packaging, and implementing a closed-loop system.
One example of an SME embracing recycling is "Bee’ah," a waste management company based in Sharjah. Bee’ah has implemented a comprehensive waste management program that includes recycling, composting, and landfill diversion. The company has also developed sustainable packaging solutions, such as a biodegradable plant-based water bottle.
There are easier ways to adapt to a circular economy. Platforms like The Surpluss are here to help SMEs accelerate the UAE's transition to a circular economy. 40 percent of participating companies on this platform come from manufacturing value chains in heavy industry, with the rest evenly comprising service providers, FMCG and others. 98 percent of the companies on the platform report financial savings or income from circular business models.
We have noticed that larger businesses, such as multinationals or conglomerates, are becoming more demanding of their first-tier suppliers, particularly in manufacturing value chains. However, this demand can be justified if larger players commit to supporting their suppliers using capacity building or training. However, now, SMEs are often left in the dark without the know-how to implement circular business models, whereas larger companies demand more sustainable products without engraining any real change within their operations, rather shifting the burden upwards in their supply chains. Close collaboration must be encouraged to avoid creating bottlenecks in sustainable business model adoption.Rana Hajirasouli, Founder of The Surpluss
Hajirasouli suggested that businesses can help their teams and ecosystem adapt to the circular economy by providing incentives, raising awareness, set regulations, providing the infrastructure and creating partnerships.
SMEs in the UAE have a crucial role to play in the transition towards a circular economy. By reducing waste, promoting reuse and implementing recycling programs, they can contribute to a sustainable future and create new business opportunities. The UAE government is also actively promoting circular economy initiatives, supporting SMEs interested in adopting sustainable practices. By working together, SMEs can contribute to a more resilient, efficient and sustainable economy that benefits everyone.