European Eco-Innovation Forum examines the financing needs of pioneering SMEs

European Eco-Innovation Forum examines the financing needs of pioneering SMEs

The 20th European Forum on Eco-Innovation, which took place in Tallinn, Estonia, from 26-28 October 2016, showed that small and medium-sized companies (SMEs) are taking a pioneering role in developing circular economy business models, which could in time be scaled up to have an economy-wide impact.

The European Business Awards for the Environment (EBAE) 2016-2017, given out during the forum, recognised some of these pioneering companies, which are working in areas as diverse as crop protection, baby food, smartphones and tourism.

Barriers to the circular economy

Meanwhile, discussions at the forum focused on financing of the circular economy by examining some of the barriers that eco-innovative SMEs face when they want to expand. Some of these barriers are faced by all SMEs, such as problems in dedicating resources to the exploration of potential financing opportunities, and under-estimation by SMEs of their financial needs and the amount of time they need to develop innovations.

Other barriers, however, are more specific to the circular economy and eco-innovation. For example, discussions at the forum underlined a persistent lack of understanding among SMEs of what investors want and vice versa. Many investors understand eco-innovation and the implementation of circular economy business models primarily in terms of information technology, and do not grasp that significant capital and investments in plant and systems can be needed.

Eco-innovative winners

The EBAE 2016-2017 winners provide a good cross-section of the types of eco-innovative ideas being explored by SMEs:

  • Management awards went to two very different companies – Hungary's Ladybird Farm (in the micro and small business category), and the United Kingdom's CMS Window Systems (medium to large business category). Ladybird Farm is a sustainable tourism venture that allows visitors to pay part of their entrance fee in recyclables – plastic bottles, aluminium cans and paper. CMS Window Systems has established Scotland's first commercial innovation hub at which energy efficient building products and services are showcased.

  • The Product Award went to Turkey's Hydromx International, which has developed a technology that uses nano-particles to increase the efficiency of heating and cooling systems. The technology reduces energy use by up to 35% compared to conventional systems.

  • The Process Award went to France's M2i Life Sciences, which has developed a method of protecting forests from a destructive moth species by “paintballing” trees with a pheromone that repels the insects.

  • The Business & Biodiversity Award was handed to Germany's HiPP International, which produces baby food from organic ingredients and was the first major European food producer to introduce an Eco-Management and Audit Scheme (EMAS)-based environmental management system.

  • The International Cooperation Award went to Fairphone, a Dutch social enterprise that produces a smartphone that is free of conflict minerals and that is modular, with components that can be easily replaced.

Companies such as the EBAE winners are “agents of change and enablers of an economy-wide transition,” said Joanna Drake, Deputy Director-General of the European Commission’s Directorate-General for the Environment, speaking at the forum. Speakers at the forum also underlined that to improve the framework conditions for such companies, policymakers need to act on pledges such as the reduction or phase-out of subsidies for fossil fuels, and to work to change consumer attitudes and behaviour, so that the circular economy becomes engrained in daily life.

For further information about the 20th European Forum on Eco-Innovation, visit http://ec.europa.eu/environment/ecoinnovation2016/1st_forum/

For further information on European Business Awards for the Environment