(FEB NEWS) SURABAYA – The Department of Economics, Faculty of Economics and Business (FEB) Universitas Airlangga (UNAIR) in collaboration with the Department of Inclusive and Green Financial Economics (DEIH) Bank Indonesia (BI) held a Focus Group Discussion (FGD) and Dissemination of a Study entitled “Development of Circular Economy-Based MSME Business Models” on Friday, November 28, 2025. This event aims to formulate policy directions and strategies for MSME development so that they can shift from a linear model (take, make, dispose) to a more efficient and sustainable circular model.

Vice Dean III of FEB UNAIR, Novrys Suhardianto, SE, MSA, Ak., Ph.D., in his remarks emphasized the importance of the role of academics in studying the potential of MSME businesses integrated with environmental issues, considering that the MSME sector is the backbone of the national economy.

The FGD event was held in Room 206, 2nd Floor of FEB UNAIR and was attended by various stakeholders. In addition to lecturers from the Department of Economics FEB UNAIR and representatives of the Department of Inclusive and Green Financial Economics (DEIH) Bank Indonesia, this activity also presented respondents & Materials from academics, namely Prof. Dr. Deni Kusumawardani, SE, M.Si., and Ilmiawan Auwalin, SE, M.App.Ec., Ph.D., as well as representatives of the Bina Bhakti Lingkungan Foundation. This FGD also received active participation from Masters (S2) and Doctoral (S3) students of FEB UNAIR.

Enhancing Business Viability with Green Digitalization

As Keynote Speaker, Donni Fajar Anugrah, Deputy Director of the Green Finance Economic Development Group at Bank Indonesia, presented the results of a study highlighting the significant potential of the Circular Economy (ES) in addressing waste as a contributor to Greenhouse Gas emissions.

"Circular business models can create added economic value. Piloting in four different subsectors (BSF, Pineapple Leaf Fiber Eco-Fashion, Plastic Waste Eco-Furniture, and Used Cooking Oil) has proven to have a positive Net Present Value (NPV)," explained Donni.

He cited an example, where simulations showed that a Rp1 billion investment in the BSF model could potentially create up to 148 new jobs, while Eco-Fashion made from pineapple leaf fiber could create 116 new jobs.

In an effort to increase access to green financing, Donni also revealed that BI is developing a "Green Calculator." This digital tool is designed to measure the "greenness" of an MSME, thereby providing performance transparency and facilitating banks' assessment of financing eligibility.

Academic Review: The Urgency of Environmental Economic Valuation

The FGD session presented scientific contributions from academics from FEB UNAIR. Prof. Dr. Deni Kusumawardani, SE, M.Si., emphasized that the implementation of the Circular Economy must be viewed from an Environmental Economics perspective.

"The Circular Economy isn't just about economics, but also about sustainability and its impact on the environment. Therefore, we need to use Environmental Cost Benefit Analysis (EBA) instruments to quantitatively measure all costs and benefits," Prof. Deni emphasized.

Meanwhile, Ilmiawan Auwalin, SE, M.App.Ec., Ph.D., provided a critical review of existing business model studies. He highlighted three important aspects: the need for price sensitivity risk analysis, calculating the opportunity cost of waste, and most crucially, ensuring a sustainable supply of waste as the primary raw material, particularly for the BSF model, to avoid overestimating the economic impact.

Field Practice: The Ever-Present Trash

From a practical perspective, Ms. Nurul Chasanah S. Kom. I from the Bina Bhakti Lingkungan Foundation (YBBL) presented concrete implementation in the field. She explained that YBBL chose waste as its primary business focus due to its high and sustainable availability.

"We chose waste as our business because it's a daily occurrence and never-ending problem. Through programs like the Mobile Waste Bank (Bankeling) and the Waste Collection Service, we empower communities while simultaneously building environmental awareness," said Nurul Chasanah.

The event was closed by the Dean of FEB UNAIR, Prof. Dr. Rudi Purwono, who expressed his appreciation for the synergy between regulators, academics, and practitioners. It is hoped that this FGD will produce a realistic and sustainable roadmap for Circular MSME development, as well as serve as a basis for formulating more inclusive and environmentally responsible policies.