Can social enterprises show the EU they can deliver what it needs?
BRUSSELS BRIEFING: The social economy has enjoyed support in the EU in the past few years, but it could face serious headwinds as policymakers shift priorities. Now is the time for social enterprises to show they can make the bloc more competitive – with added impact, writes Euclid’s Toby Gazeley.
Since the end of January, it seems like the world has been turned on its head – not once but time after time. Have no fear, for some things will never change. Yes that’s right, it’s still grey and raining in Brussels. While in Washington DC the machine of government is in turmoil with the decision to ensure that DEI goes to DIE, you can rest assured that the slow grind of EU policy making goes on. And quite a lot is on the agenda for the social economy in 2025.
Shifting priorities
2025 brings the mid-term review of the European Social Economy Action Plan (yes, already). It seems like it was adopted only yesterday, but it was 2021. This was the proposed plan by the EU for supporting the social economy until 2030 to grow and thrive, becoming ever more mainstream and resilient in the aftermath of the Covid-19 pandemic. The review is a stock-taking exercise to evaluate how the implementation is progressing, as well as updating any elements that are yet to come based on developments that have occurred since the initial adoption of the action plan.
While a lot has been achieved in the last few years, “the times they are a-changin’”, as a great singer once sang. The new European Commission has toned down its rhetoric about the Green Deal, shifting more to an emphasis on European competitiveness. This presents a challenge for the social economy but also an opportunity: this opportunity being to demonstrate that social enterprises in particular demonstrate a model for European competitiveness. These are businesses that can balance a triple bottom line, remaining competitive while delivering positive impacts for the environment and the communities in which they operate. Indeed, with the proposal of the so-called ‘Omnibus Regulation’, it is not clear what will remain of the EU’s flagship policies to boost sustainability by large companies. This regulation aims at Simplifying the Corporate Sustainability Reporting (CSRD) and Due Diligence Directives (CSDDD), supposedly easing compliance, but fears remain that the overarching ambition behind these directives and the European Green Deal will be lost. Making the case for the kind of European competitiveness demonstrated by social enterprises won’t be easy, but should absolutely be front and centre of the second phase of the implementation of the Social Economy Action Plan.
Objective: 2030
In the first years of its implementation we’ve already seen some big pieces of policy come out of the Social Economy Action Plan. This includes developments such as the Transition Pathway for the Proximity and Social Economy (all about supporting the social economy to tackle the challenges and make the most of the opportunities presented by the green and digital transitions) and the Council recommendation on developing social economy framework conditions (all about trying to improve the policy and legislative conditions that social economy entities operate in). While these have been two of the highest profile developments, many more have been achieved. They include the Social Economy Gateway, the launch of the Youth Entrepreneurship Policy Academy, various series of “Mutual Learning Workshops” for public officials and a review of State Aid rules for the Social Economy.
Making the case for the kind of European competitiveness demonstrated by social enterprises won’t be easy but should absolutely be front and centre
Now in the years before 2030, more needs to be done to see the EU’s commitment to supporting the social economy as a core part of the EU’s social market economy in its external action. For example, this should include enshrining support for the social economy in pre-accession funds (money that is made available to countries who are candidates for EU membership, for example, in the Western Balkans) and in programmes of EU external action.
More work is still required to understand the social economy and social enterprises in particular. The European Commission is joining others (such as the International Labour Organisation, the UN and the World Economic Forum) in addressing this topic. Identifying some actors in the social economy can be achieved relatively easily thanks to clearer legal statuses for cooperatives, foundations and associations. However, more funding needs to be made available for mapping and understanding social enterprises which currently find themselves in something of a grey area – excluded in some ways from both the social economy and by mainstream business.
Review of public procurement policy: a chance to have your say
The EU is currently reviewing its Public Procurement Directive. This is an opportunity for all stakeholders to provide input on the review of this directive that has wide-ranging implications across the economy, as a large portion of GDP is spent through public procurement. Provisions exist within the current directive to integrate social and environmental clauses into procurement decision-making but these are often not used nor fully understood. This review of the Public Procurement Directive presents an opportunity for the social economy to reiterate the importance of social procurement and to highlight ways in which a review of this directive could be used to bolster the social economy. Any interested individuals or organisations who would like to contribute to the consultation can respond through the Have Your Say portal here.
Planning the EU’s next seven-year budget
2025 is not just an important year because of the Social Economy Action Plan mid-term review, it is also the year when the starting gun is fired on the development of the next EU Multiannual Financial Framework. This is the EU’s seven-year budget that will cover the period 2028-34. The social economy has benefited greatly from the current EU budget with more project funding and support to EU level ecosystem builders, but with a move away from an interest in green and social issues, is this support for the social economy under threat? Throughout 2025 it will be up to social economy stakeholders to make the case for the continuation of EU support in the next Multiannual Financial Framework.
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