The issue of sustainable development has recently gained momentum in the academic community, and has also attracted media attention. This heightens the need to interrogate how Small and Medium Enterprises (SMEs) can reduce environmental degradation to support a circular economy. Despite the economic contribution of SMEs, their negative effect on the environment has received scanty attention. To make matters worse, the available literature pertinent to SMEs’ modelling of production and reduction of environmental degradation is scattered and fragmented. Consequently, this chapter focuses on establishing the role of SMEs’ modelling of production and consumption in the reduction of environmental degradation. With the adoption thematic analysis, the results suggest that SMEs can reduce environmental degradation by recycling waste, supporting green innovation, adopting green energy, fostering green entrepreneurship, creating green jobs, and supporting a circular economy. Therefore, the study concludes that SMEs’ responsible modelling of production and consumption adds value in ensuring the reduction of environmental degradation in a circular economy. It is recommended that the government and financial institutions should offer green finance to SMEs to stimulate green entrepreneurship. More interestingly, non-governmental organizations (NGOs) must roll out capacity-building programs to target the expansion of green projects and initiatives of SMEs.