Social enterprises for Europe’s transition

January 2022

The future of European cohesion and the just and green transition of Europe is not just up to public policies and large businesses. Social enterprises and the social economy might hold the potential to shape some of this. However, for this they might need a gentle push.

Social enterprises and the social economy

Increasingly businesses are not just about generating profits. To be attractive to employees and customers they also committee to wider societal purposes. This can be in the fields of environment helping to deliver on the UN sustainable development goals, in the fields of social inclusions supporting diversity e.g. concerning gender balances, social and cultural backgrounds, sexual orientation, or in other societally relevant fields.

While many enterprises add a layer of social or environmental responsibilities to their original economic purpose, social enterprises go one step further. They combine societal goals with entrepreneurial spirit to achieve wider social, environmental or community objectives. This means, their main objective is to have a social impact rather than make a profit for their owners or shareholders.

Social enterprises can take various legal forms including cooperatives, mutuals, associations, foundations and social enterprises among other forms that can be specific to each country. Together some 2.8 million social economy enterprises are active in the EU. That corresponds to roughly 10% of all enterprises in the EU. They form the backbone of the social economy.