Barriers and drivers for enterprises to transition to circular economy

The document argues that while businesses recognize the benefits of circular economy practices, they are hindered by systemic technical, knowledge, and financial barriers. It identifies information availability and government support as primary drivers for transition, particularly for SMEs in Southeast Asia.

• Technical and knowledge gaps are the primary obstacles for enterprises transitioning to circular practices, with survey data showing only about 35% of respondents have received relevant training.
• Financial barriers significantly impede the transition, specifically regarding internal financial structures, high upfront costs, and a lack of external support from banking institutions.
• Regulatory and institutional failures, including a lack of policy coherence within ASEAN countries and the existence of subsidies that favor linear production, reduce the competitiveness of circular approaches.
• Consumer behavior acts as a barrier because of a lack of awareness regarding environmental impacts and a preference for lower-priced linear products, as circular products often require higher upfront investments in design and infrastructure.
• The most significant drivers for enterprises to adopt circular practices are the availability of information through the internet, peer advice, and training programs.
• Government support at local, national, and regional levels is identified as a top driver for small and medium-sized enterprises (SMEs) to transition to circular economy models.

APA

Melati, K., Nikam, J., & Nguyen, P. (2021). Barriers and drivers for enterprises to transition to circular economy. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2021/11/barriers-drivers-enterprises-circular-economy-sei-brief.pdf

Chicago

Melati, Kuntum, Jaee Nikam, and Phuong Nguyen. Barriers and drivers for enterprises to transition to circular economy. Stockholm Environment Institute, 2021. https://www.sei.org/wp-content/uploads/2021/11/barriers-drivers-enterprises-circular-economy-sei-brief.pdf.

Wikipedia

{{cite report |last1=Melati |first1=Kuntum |last2=Nikam |first2=Jaee |last3=Nguyen |first3=Phuong |title=Barriers and drivers for enterprises to transition to circular economy |publisher=Stockholm Environment Institute |date=November 2021 |url=https://www.sei.org/wp-content/uploads/2021/11/barriers-drivers-enterprises-circular-economy-sei-brief.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{melati2021barriers, author = {Melati, Kuntum and Nikam, Jaee and Nguyen, Phuong}, title = {{Barriers and drivers for enterprises to transition to circular economy}}, institution = {Stockholm Environment Institute}, year = {2021}, month = nov, url = {https://www.sei.org/wp-content/uploads/2021/11/barriers-drivers-enterprises-circular-economy-sei-brief.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }