This research aimed to gain a better understanding of the Circular Economy (CE) practices of Small to Medium Enterprises (SMEs) in Wales in order to give policy makers a clearer understanding of the challenges of encouraging businesses to incorporate CE practices. Therefore, this report sets out to understand the innovation practices and capabilities of SMEs and their incorporation of CE principles into their continuous improvement (CI) and new product and service development (NPD/SS) processes. Nascent research suggests that SMEs are more likely to adopt CE practices into their NPD/SS processes if they appear to add value for their goods and services . It would therefore appear beneficial to develop the innovative capacity of business in Wales if we are to see business incorporate CE principles into their products and services. The survey described in this report aimed to provide information to the CESME project, an Interreg Europe project. The CESME project aims to address and improve the effectiveness and impact of policy instruments, stimulating SMEs to overcome years of conventional production methods and shift towards green innovation – and circular economy at best. Specifically, the project aims to provide policy makers with the knowledge and understanding of the potentials within the green economy, and make them aware of the challenges and barriers that SMEs face in this regard. The Wales partner in the CESME project undertook a small research project to understand better the CE practices of SMEs in Wales and the extent of their innovation capabilities and so identify which sectors and size businesses might be more receptive to policy instrument