| Summary: | Since the institution and adoption of the United Nations Sustainable Development Goals (SDGs) in 2015, there has been acceleration in effort to meet its objectives by 2030.
Recent data released by the United Nations Development Program however, indicates that environmental challenges remain.
Hence the effort to address these environmental challenges has been increased, not only to ensure achievement of the SDGs, but more importantly to address and arrest further degradation to the environment. The degradation of the environment would not only result in failures in economic systems which directly impact the well-being of societies, but more importantly, would result in an unsustainable environment for habitation.
Government institutions have instituted and will continue instituting more intensive action plans to address these issues which will change the way business is done through transitioning from the linear economic model of ‘take-make-waste’ to the circular economic model which emphasises maximising the value and usage of existing resources by keeping the within the production system longer through recycling and repurposing, thereby reducing the reliance on depleting natural resources while responsibly managing what is left.
Based on four case studies of Malaysia Small and Medium Enterprises (SME), this paper examines and highlights the key factors that drive adoption of the circular economic business models by SMEs and the key success factors which aid the transition to the circular economy.
Collaboration is found to be one of the key success factors as there is exploratory learning that leads to innovative ideas and practices. The implication of which should be considered in the formulation of policies on learning (Training) and incentives (Grants) by public institutions.
Institutional policies which lack clarity or cohesion at national level and international level are found to be an impediment to SMEs in implementing actions to meet policy objectives.
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