COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Building an economy that works for people: an action plan for the social economy
Date: 2021-12-09
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU action, State aid, corporate social responsibility, innovation, public procurement, social economy, social enterprise, social integration, social services, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 9.12.2021  COM(2021) 778 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Building an economy that works for people: an action plan for the social economy {SWD(2021) 373 final}  
 
 
1. 

INTRODUCTION 

Every  day  some  2.8  million  social  economy  entities  in  Europe1  offer  concrete  and 
innovative  solutions  to  key  challenges  we  are  facing.  They  create  and  retain  quality 
jobs, contribute to social and labour-market inclusion of disadvantaged groups and equal 
opportunities for all, drive sustainable economic and industrial development, promote the 
active participation of citizens in our societies, play an important role in Europe’s welfare 
systems, and revitalise Europe’s rural2 and depopulated areas3.  

During the Covid-19 pandemic, many social economy entities have been at the forefront 
of the crisis. They have produced face masks, supported digital online education, assisted 
people in need and provided proximity help in local communities. 

Parts of the social economy contribute to the green and digital transitions by supplying 
sustainable  goods  and  services  and  bridging  the  digital  divide.  Their  participatory 
business  models,  that  take  into  account  the  needs  of  citizens,  employees  and  other 
stakeholders, help to ensure that the transitions are fair. 

In addition, the social economy contributes to the diversity of company forms in Europe, 
fostering  greater  consumer  choice  and  product/service  quality.  The  social  economy 
makes an important contribution to GDP in the countries where it is most developed, for 
example  10%  in  France4.  For  this  reason  it  has  been  included  as  the  core  of  the 
“Proximity  and  social  economy”  ecosystem,  one  of  the  14  industrial  ecosystems 
identified in the update of the EU Industrial Strategy5. 

The  social  economy  can  help  implement  the  principles  of  the  European  Pillar  for 
Social Rights and deliver on its 2021 Action Plan and the 2030 headline targets, for 
example the increase of the employment rate and the reduction of the number of people 
at risk of poverty and social exclusion. The social economy employs some 13.6 million 
people; paid employment varies between 0.6% and 9.9% amongst Member States6. This 
shows the uneven development of the social economy within the EU but also reveals that 
there is major untapped economic and job creation potential for the social economy 
in several Member States and regions if adequate measures are put in place.  

The  social  economy  complements  Member  States’  action  in  delivering  quality  social 
services in a cost-effective manner. It also complements their efforts to integrate young 
people and disadvantaged groups (e.g. persons with disabilities, older people, long-term 
unemployed,  persons  with  a  migrant,  minority  racial  or  ethnic  background(particularly 

1   Figure covering the EU 28. See European Economic and Social Committee,  Recent evolutions of the 

Social Economy in the European Union, by Monzon J. L. and Chaves R.,  2017, p. 66. 

See Long-Term Vision for Rural Areas, COM(2021) 345 final. 

2 
3   Krlev  G.,  Pasi  G.,  Wruk  D.,  Bernhard  M.,  Reconceptualizing  the  Social  Economy,  Stanford  Social 

Innovation Review, 2021. 

4   https://www.economie.gouv.fr/leconomie-sociale-et-solidaire 

5   The  EU’s  updated  industrial  strategy  proposes  14  industrial  ecosystems  to  take  account  of  the  new 
circumstances  following  the  COVID-19  crisis  and  aims  to  drive  the  transformation  to  a  more 
sustainable, digital, resilient and globally competitive economy, COM(2021) 350 final. 

6   See  European  Economic  and  Social  Committee,  Recent  evolutions  of  the  Social  Economy  in  the 

European Union, by Monzon J. L. and Chaves R.,  2017, p. 69. 

1 

 
 
 
                                                 
Roma), single parents) into the labour market and in society at large7. For example, the 
social  economy  helps  build  bridges  for  persons  with  disabilities  to  employment  in  the 
open  labour  market;  and  provides  services  which  are  essential  to  support  their 
independent  living.  Furthermore,  the  social  economy  helps  improving gender  equality. 
On the one hand, many women have access to the labour market via jobs created by the 
social  economy,  on  the  other  hand,  social  and  care  services  provided  by  the  social 
economy allow women to access the wider labour market. 

Similarly,  the  social  economy  contributes  to  the  implementation  of  the  Sustainable 
Development  Goals  (SDGs)8  at  EU  and  global  level.  This  is  because  it  is  active 
worldwide  in  reducing  poverty,  driving  the  transition  to  sustainable  cities  and 
communities, responsible consumption and production and sustainable finance. As such, 
collaborative  and  non-profit  organisations  are  a  key  pillar  of  Europe’s  social  and 
economic resilience9.  

Social economy has the potential to reshape the economy post-COVID through inclusive 
and  sustainable  economic  models  leading  to  a  fairer  ecological,  economic  and  social 
transformation. 

The Recovery  and  Resilience  Facility provides  Member  States  with  significant 
opportunities  to  implement  reforms  and  investments  through  social  and  inclusive 
entrepreneurship. Moreover, some Member States have reflected the social economy and 
inclusive  entrepreneurship  as  priorities  in  their  national  recovery  and  resilience  plans. 
The Commission will monitor and support Member states in the implementation of their 
respective plans. 

The  social  economy  has  a  key  role  to  play  in  the  transition  towards  more  beautiful, 
sustainable,  inclusive  living  spaces  and  life  styles  as  promoted  by  the  New  European 
Bauhaus10,  bringing  new  transdisciplinary  approaches  and  solutions  attuned  with  the 
local communities needs and aspirations.  

However some of this potential is still under-exploited. The social economy remains 
unknown  to  too  many  people11.  Many  consumers  want  to  buy  more  responsibly12  in 
terms  of  the  sources  of  goods  and  services  they  purchase,  but  do  not  necessarily  know 
how.  Patient,  long-term  investment  capital  is  not  always  readily  available  to  social 
economy entities. Public authorities do not fully use the existing possibilities to facilitate 
the  access  of  social  enterprises  to  public  procurement,  or  funding,  nor  the  flexibility 
offered by current EU State aid rules. Because they are not sufficiently  understood and 
recognised,  social  economy  entities  face  difficulties  developing  and  scaling  up  their 

7  The importance of social economy is also flagged in the Commission’s Action plan on Integration and 

Inclusion 2021-2027 (COM(2020) 758 final). 

8   https://sdgs.un.org/goals 

9  COM (2020) 493 final. 

10  COM(2021) 573 final. 

11   The social economy concept enjoys little or no recognition in at least 10 EU countries. See European 
Economic and Social Committee, Recent evolutions of the Social Economy in the European Union, by 
Monzon J. L. and Chaves R.,  2017, p. 35. 

12   For example, a Eurobarometer survey from March 2020 indicated a commonly shared view that one of 
the  most effective  ways of tackling environmental problems is ‘to change the  way we consume’ and 
‘change the way we produce and trade’. 

2 

 
 
                                                 
activities  and,  thus,  are  held  back  from  delivering  even  greater  economic  and  social 
impact. They need more and better support to grow and thrive.  

To  optimise  the  potential  of  the  social  economy  in  the  Single  Market,  more  should  be 
done  to  replicate  successful  experiences  across  Member  States  and,  where  possible,  to 
help social enterprises grow from local to European, including through the use of digital 
tools.  

This action plan seeks to enhance social innovation, support the development of the 
social economy and boost its social and economic transformative power. It proposes 
a series of actions for the period 2021-2030. It builds on the Social Business Initiative13 
(SBI) and the Start-up and Scale-up initiative14. It has been prepared through an open and 
inclusive process over a two-year period15.   

2.  DEFINING SOCIAL ECONOMY 

The  social  economy  encompasses  a  range  of  entities  with  different  business  and 
organisational models. They operate in a  large variety of economic sectors: agriculture, 
forestry  and  fishing,  construction,  reuse  and  repair,  waste  management,  wholesale  and 
retail trade, energy and climate, information and communication, financial and insurance 
activities, real estate activities, professional, scientific and technical activities, education, 
human health and social work activities, arts, culture and media. 

In  the  context  of  this  action  plan  and  related  EU  initiatives,  the  social  economy 
covers  entities  sharing  the  following  main  common  principles  and  features:  the 
primacy  of  people  as  well  as  social  and/or  environmental  purpose  over  profit,  the 
reinvestment of most of the profits and surpluses to carry out activities in the interest of 
members/users  (“collective  interest”)  or  society  at  large  (“general  interest”)  and 
democratic and/or participatory governance. 

Traditionally,  the  term  social  economy  refers  to  four  main  types  of  entities  providing 
goods  and  services  to  their  members  or  society  at  large:  cooperatives,  mutual  benefit 
societies,  associations  (including  charities),  and  foundations.  They  are  private  entities, 
independent of public authorities and with specific legal forms.   

Social enterprises16 are now generally understood as part of the social economy. Social 
enterprises operate by providing goods and services for the market in an entrepreneurial 
and often innovative fashion, having social and/or environmental objectives as the reason 
for their commercial activity. Profits are mainly reinvested with a view to achieving their 
societal objective. Their method of organisation and ownership also follow democratic or 
participatory principles or focus on social progress17. Social enterprises adopt a variety of 
legal forms depending on the national context.  

13   COM (2011) 682 final. 

14   COM (2016) 733 final. 

15   SWD (2021) 373. 

16  Since  the  SBI,  the  term  “social  enterprise”  has  been  deployed  in  a  number  of  EU  legal  texts  for 
funding purposes. See definitions in Regulation (EU) No 1296/2013 on a European Union Programme 
for  Employment  and  Social  Innovation;  Regulation  (EU)  No  346/2013  on  European  social 
entrepreneurship funds; Regulation (EU) 2021/1057 establishing the European Social Fund Plus. 

17   COM (2011) 682 final. 

3 

 
                                                 
Terms  such  as  “social  economy  enterprises”,  “social  and  solidarity  enterprises”  and 
“third  sector”  are  also  used  by  some  stakeholders,  countries  and  international 
organisations18 to refer to social economy entities. Work integration social enterprises are 
a  common  type  of  social  enterprise  across  Europe.  They  specialise  in  providing  work 
opportunities for disadvantaged people.  

Most  of  the  actions  proposed  in  this  action  plan  are  relevant  to  all  social  economy 
entities, however some may be specific to one or other category. 

3.  CREATING THE RIGHT FRAMEWORK FOR THE SOCIAL ECONOMY TO THRIVE 

3.1.  Developing policy and legal frameworks 

Evidence shows the importance of improving the “enabling environment” for  the social 
economy  to  thrive.  As  confirmed  by  research19  and  stakeholders20,  policy  and  legal 
frameworks form an essential part of this environment but adapting them to the needs of 
the social economy is not an easy task.  

The cross-sectoral nature of the social economy and the fact that it covers different types 
of entities are important challenges for public authorities, making it difficult to develop 
an  effective  approach.  Single  and  clear  entry  points  in  public  administrations  are  rare. 
Social  economy  entities  often  find  it  complicated  to  choose  a  legal  form  from  diverse 
options not fully tailored to their needs. 

Developing  coherent  frameworks  for  the  social  economy  entails  considering  its 
specific  nature  and  needs  with  regard  to  numerous  horizontal  and  sectoral  policies  and 
provisions such as those relating to taxation, public procurement, competition, social and 
labour  market,  education,  skills  and  training,  healthcare  and  care  services,  Small  and 
Medium-sized Enterprise (SME) support, circular economy, etc.  

For example, taxation is an important policy for the social economy. Few countries have 
developed  a  specific  and  consistent  taxation  framework  for  social  enterprises.  Many 
provide  incentives  ranging  from  corporate  tax  exemptions  on  retained  profits  to  VAT 
exemptions or reduced rates, social insurance costs reduced/covered by subsidies, or tax 
reductions for private and institutional donors21. However, access to these incentives can 
be  complex  and  the  different  actions  do  not  always  benefit  from  appropriate 
coordination. 

Sectoral public policies are also relevant for social economy entities as they are important 
partners  for  public  authorities  in  the  provision  of  social,  health  and  care  services.  In 

18   For example, the International Labour Organisation. 

19   E.g.  Jenkins,  Hamish,  Ilcheong  Yi,  Samuel  Bruelisauer  and  Kameni  Chaddha.  Guidelines  for  Local 
Governments on Policies for Social and Solidarity Economy, UNRISD, Geneva, 2021, EU-OECD co-
operation  on  social  entrepreneurship  (e.g.  the  Better  Entrepreneurship  Policy  Tool,  policy  briefs  and 
in-depth policy reviews  for Member States) and European Commission, Social enterprises and their 
ecosystems  in  Europe  -  Comparative  synthesis  report,  by  Borzaga  C.,  Galera  G.,  Franchini  B., 
Chiomento S., Nogales R. and Carini C., Luxembourg, 2020. 

20   SWD (2021) 373. 

21   European  Commission,  Social  enterprises  and  their  ecosystems  in  Europe  -  Comparative  synthesis 
report, by Borzaga C., Galera G., Franchini B., Chiomento S., Nogales R. and Carini C., Luxembourg, 
2020, p. 177. 

4 

 
                                                 
the  care  economy 

job 
view  of  ageing  demographics 
these  sectors  (with  a 
opportunities.  However,  workers  providing  services 
predominantly  female  workforce)  face  many  challenges,  in  terms  of  low  wages  and 
precarious  working  conditions.  The  new  European  Care  Strategy  announced  for  2022 
will  provide,  among  others,  an  opportunity  for  boosting  the  care  economy  raising  the 
profile  of  the  strong  added  value  of  the  social  economy  in  this  sector,  also  to  help 
improve working conditions. 

is  expanding,  providing 

in 

When developing  appropriate policy and legal  frameworks,  public authorities  need to 
take  into  account  the  diversity  of  the  legal  forms  covered  by  the  social  economy. 
While  cooperatives,  mutual  benefit  societies,  foundations,  associations  and  social 
enterprises  have much in common, they nevertheless also  have different objectives and 
modes of operating and face specific obstacles.  

Within  the  social  economy,  cooperatives  represent  a  well-established  form  of  social 
economy business model. They are managed by producers, users or workers and are run 
according  to  the  'one  member,  one  vote'  rule22.  They  have  proved  to  be  versatile  over 
time  and  across  sectors,  offering 
to  societal  challenges.  
Nevertheless,  cooperatives  report  that  their  ownership  structure  makes  it  more  difficult 
for them to benefit from equity investments. Specific financial and non-financial support 
can play a crucial role when cooperatives are set up in the context of worker buyouts23 
with a view to preserving jobs and the continuation of a viable economic activity. 

innovative  solutions 

Mutual benefit societies report that existing rules do not take sufficiently into account 
their not-for profit nature. For this reason the Commission will raise awareness among 
national authorities of the specificities of the mutualist model and the possibilities for 
reducing the administrative burden24. 

Foundations and associations in the social economy explain they encounter difficulties 
in  enjoying  the  full  benefits  of  the  Single  Market.  For  example,  associations  face 
constraints  in  operating  their  activities  cross-border.  This  issue  is  addressed  in  the 
European Parliament draft report with recommendations to the Commission on a statute 
for  European  cross-border  associations  and  non-profit  organisations  expected  to  be 
adopted soon25. To better understand issues faced by associations, the Commission will 
launch a study providing a comparative analysis of the legal regimes and landscapes 
of associations in the EU. 

22   An  EU  legal  form  for  a  European  Cooperative  Society  was  created  in  2003  (Regulation  (EC)  No 
1435/2003). It creates a form of European cooperative, helping cooperatives which have activities in 
more  than  one  EU  country.  It  also  provides  a  legal  basis  for  other  companies  wishing  to  group 
together. Council Directive 2003/72/EC supplementing the Statute for a European Cooperative Society 
with regard to the involvement of employees complements this Regulation. 

23   Worker buyouts can be an effective way out of company crisis and problems of generational transfer 

businesses. 

24  For instance, the Commission will explain how the administrative burden for mutual insurers may be 
reduced  under  the  enhanced  framework  on  proportionality  proposed  within  the  Solvency  II  review 
(COM(2021)581). 

25  Report  based  on  Art.  225  TFEU  (initiative  legislative  procedure),  reference  2020/2026(INL), 

Committee on Legal Affairs – Lagodinsky report. 

5 

 
                                                 
Similarly, foundations report issues with the tax treatment of cross border donations to 
public  benefit  organisations26  in  other  Member  States.  Following  the  Treaty  principle 
concerning the free movement of capital and non-discrimination27 and relevant rulings of 
the  European  Court  of  Justice28,  donors  have  to  produce  a  case-by-case  comparability 
analysis29  to  benefit  from  favourable  taxation  rules  for  their  cross-border  donations. 
However, in practice, the procedures applied by Member States increase compliance and 
administrative  costs  and  create  uncertainty  for  both  philanthropic  entities  and  donors. 
The European Commission can open infringement procedures in cases where barriers to 
cross-border  activities 
from  non-transposition,  violation  or  wrongful 
implementation of EU law.  

result 

Since  2011,  several  Member  States  have  put  in  place  targeted  legal  frameworks  and 
policies  in  relation  to  social  enterprises  and/or  the  social  economy30.  In  addition  to 
contributing to their recognition, this has resulted in other positive developments in some 
cases,  such  as  the  creation  of  specific  ministerial  units  and  enhanced  dialogue  between 
stakeholders  and  public  authorities.  In  some  countries  labels  or  certification  systems 
have  been  developed  which  can  benefit  social  economy  entities  and  facilitate  their 
access  to  specific  policies  and  enabling  specific  treatment31.  Successful  reforms  could 
serve as inspiration to other Member States. 

The  Commission  has  developed  a  number  of  tools  and  resources  to  support  Member 
States and mutual learning among policy makers. The Commission is preparing together 
with  the  Organisation  for  Economic  Cooperation  and  Development  (OECD)  guidelines 
on  appropriate  legal  frameworks  for  social  enterprises  to  be  published  in  2022.  The 
Commission  has  also  recently  published  a  guide  and  a  collection  of  good  practices  on 
socially  responsible  public  procurement32.  All  this  material  and  experience  can  help 
Member  States  improve  their  national  and  regional  frameworks.  Member  States  also 
have  the  opportunity  to  obtain  tailored  expertise  through  the  Technical  Support 
Instrument. 

26   Public  benefit  organisations  are  entities  with  a  status  enabling  them  to  receive  tax  incentivised  gifts 
from  individuals  and  corporations,  or  receive  tax  relief  directly  in  relation  to  their  activities.  For  an 
entity to receive such a status, it must meet a number of requirements that can be separated into three 
broad  categories:  not-for-profit  requirements,  worthy  purpose  requirements  and  public  benefit 
requirements  (i.e.  they  benefit  a  large  and  inclusive  enough  section  of  the  public).  See  OECD, 
Taxation and Philanthropy, OECD Tax Policy Studies No. 27, Paris, 2020. 

27   Confirmed in the following European Court of Justice rulings: judgment of 14 September 2006, Centro 
di  Musicologia  Walter  Stauffer,  C-386/04;  judgement  of  27  January  2009,  Persche,  C-318/07; 
judgement of 10 February 2011, Missionswerk, C-25/10. 

28  

Judgment of 14 September 2006, Centro di Musicologia Walter Stauffer, Case C-386/04; judgement of 
27  January  2009,  Persche,  Case  C-318/07;  judgement  of  10  February  2011,  Missionswerk,  Case  C-
25/10. 

29   The  process through  which  national tax authorities deal  with the recognition of the equivalence of a 

public-benefit organisation based in other EU Member States. 

30   See European Commission, Social enterprises and their ecosystems in Europe - Comparative synthesis 
report, by Borzaga C., Galera G., Franchini B., Chiomento S., Nogales R. and Carini C., Luxembourg, 
2020. 

31   For  example  the  French  “solidarity  enterprise  of  social  utility”  (ESUS)  and  the  “social  enterprise” 

status introduced by Bulgaria, Italy, Romania and Slovakia. 

32   https://ec.europa.eu/info/policies/public-procurement/tools-public-buyers/social-procurement_en 

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The  Commission  will  encourage  mutual  learning  and  provide  guidance  and  support  to 
Member States by: 

–  Organising  webinars  and  workshops  as  of  2022  for  public  officials  based  on 
mapping exercises, collection and exchange of good practices in relation to various 
policy  fields  such  as  State  aid,    taxation,  social  investment,  business  transfers  to 
employees, labels and certification systems, social impact measurement.  

–  Publishing guidance on relevant taxation frameworks for social economy entities, 
based  on  available  analysis  and  input  provided  by  Member  States’  authorities  and 
social economy stakeholders. 

–  Publishing  guidance  clarifying  the  existing  rules  on  the  tax  treatment  of  cross-
border  public  benefit  donations  affecting  foundations  and  associations  and  the 
implementation of the principle of non-discrimination with Member States. 

–  Launching  a  study  on  national  social  economy  labels/certification  schemes 
mapping  those  existing  in  Member  States,  identifying  good  practices  and  common 
features and criteria. It will also aim to provide a common approach and guidance to 
Member States and explore the possibility of voluntary mutual recognition. 

While implementing these actions, with a view to providing a comprehensive approach to 
the social economy and facilitating its even development across the EU Member States 
and regions, the Commission will propose a Council Recommendation on developing 
social economy framework conditions in 2023. This will:  

–  Invite policy-makers to better adapt policy and legal frameworks to the needs of social 

economy entities.  

–  Provide recommendations in relation to specific policies such as employment policy, 
state  aid,  public  procurement,  taxation,  research,  education,  skills  and  training,  care 
and social services, providing financial and non-financial support tailored to all stages 
of the business lifecycle, and statistics. 

–  Highlight how institutional set-ups and stakeholder engagement can facilitate the work 

of social economy entities. 

3.2. 

Social economy and State aid 

Public financial support plays an important role in enabling the start-up and development 
of  social  economy  actors.  State  aid  control  seeks  to  maintain  a  balance  between  this 
support  and  fair  competition.  Several  challenges  and  opportunities  stand  out  for  social 
economy stakeholders.  

One issue is that public authorities and recipients often do not make the most of existing 
State  aid  possibilities.  Stakeholders  report  that  public  authorities  often  unnecessarily 
limit the amount of aid they give to social enterprises to the general de minimis threshold 
(EUR 200,000 on a period of 3 years) and do not consider other possibilities that would 
be  in  line  with  State  aid  rules,  such  as  regional  aid,  risk-finance  aid  or  aid  to  the 
recruitment  of  disadvantaged  workers,  where  maximum  amounts  of  aid  are  generally 
higher. 

7 

 
Furthermore,  existing  EU  rules  in  relation  to  services  of  general  economic  interest 
(SGEI)33 open up considerable possibilities for State aid. Entities can only benefit from 
this  flexibility  if  they  have  been  entrusted  with  a  specific  mission,  i.e.  the  SGEI. 
However,  public  authorities  do  not  always  use  this  possibility  to  its  full  potential,  for 
example in relation to the activities of social enterprises focusing on the provision of jobs 
for  vulnerable  people.  The  Commission  will  therefore  facilitate  access  to  relevant 
guidance  on  State  aid  and  cover  this  theme  in  the  webinars  and  workshops  it  will 
organise (see part 3.1). 

A second issue is that social economy stakeholders report that the size of existing  State 
aid support available to them is not always adequate, in particular with regards to aid for 
access to finance and subsidies for the recruitment of disadvantaged workers regulated by 
the  General  Block  Exemption  Regulation  (“GBER”)34.  There  is  indeed  evidence 
showing that social enterprises generally have greater difficulty in accessing finance than 
standard enterprises (see section 4.2).  

The  Commission  will,  in  the  revision  of  the  GBER  that  will  take  place  in  view  of  its 
expiry at the end of 2023, consider whether the available evidence justifies easing the 
rules in relation to aid for social enterprises’ access to finance and as regards aid for 
hiring disadvantaged or severely disadvantaged workers. 

The  Commission  calls  on  Member  States  to  make  better  use  of  their  margin  of 
discretion in defining a SGEI wherever  appropriate, with a view to  allowing qualifying 
activities  carried  out  by  social  enterprises  to  be  covered.  In  addition,  Member  States 
should  further  invest  in  training  and  capacity  building  for  their  administrations  with  a 
view to increase their level of knowledge about State aid rules. 

3.3.  Better access to markets: socially responsible public procurement 

Supplying  goods  and  services  to  and  cooperating  with  both  public  authorities  and 
mainstream  enterprises  is  key  to  the  development  of  the  social  economy.  It  generates 
revenues and enables them to become financially self-sufficient. As public procurement 
represents  14%  of  European  GDP35,  it  is  largely  recognised  as  a  key  policy  tool 
supporting the development of the social economy and social enterprises.36  

The  2014  overhaul  of  the  EU  public  procurement  rules37  created  many 
opportunities  for  public  authorities  at  all  levels  to  use  public  procurement  to 
achieve  various  policy  objectives,  including  fostering  environmental  protection  and 
pursuing social objectives. For example, the rules specifically mention social aspects as 
being  amongst  the  factors  which  can  be  included  in  award  criteria  on  the  basis  of  the 

33   Notably Commission Decision 2012/21/EU of 20 December 2011 on the application of Article 106(2) 
of  the  Treaty  on  the  Functioning  of  the  European  Union  to  State  aid  in  the  form  of  public  service 
compensation  granted  to  certain  undertakings  entrusted  with  the  operation  of  services  of  general 
economic interest. 

34   Commission  Regulation  (EU)  No  651/2014  of  17  June  2014  declaring  certain  categories  of  aid 

compatible with the internal market in application of Articles 107 and 108 of the Treaty. 

35  See COM (2017) 572 final, p. 3. 

36   Varga  E.,  How  Public  Procurement  Can  Spur  the  Social  Economy,  Stanford  Social  Innovation 

Review, 2021. 

37   Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public 

procurement and repealing Directive 2004/18/EC. 

8 

 
                                                 
‘most  economically  advantageous  tender’  criteria.  Since  then,  the  Commission  has 
undertaken several initiatives to raise awareness of the added value of green and socially 
responsible  public  procurement,  provide  guidance  and  disseminate  good  practices.  For 
example,  the  Commission  recently  published  a  revised  “Buying  Social”  guide38  with 
practical tips and examples. 

In recent years, some local and regional authorities and cities have realised the power of 
strategic  public  procurement  to  meet  societal  challenges/needs  and  drive  systemic 
change.  However,  most  public  tenders  are  still  awarded  based  only  on  the  price 
criterion  and  socially  responsible  public  procurement  is  still  far  less  known  and 
developed  than  green  public  procurement.  The  Commission  will  step  up  its  efforts  to 
highlight  the concrete benefits  and ways  of using public procurements and concessions 
procedures to achieve labour and social policy objectives, better working conditions, and 
deliver high quality social services. 

In parallel, it is important to enhance the capacity of social economy  entities to bid for 
public  procurements  and  facilitate  the  access  of  social  economy  actors  to  private 
procurement.  Interactions  with  mainstream  businesses  help  social  economy  entities 
develop and grow and such cooperation has increased. However, there is scope for more 
systematic integration in mainstream businesses’ value chains and partnering with them 
to bid jointly for public procurement, also through piloting new projects within the Single 
Market Programme.  

The Commission will: 

–  Reinforce its efforts to raise awareness, foster the exchange of good practices and 
train both public procurement officials and social economy entities on how to use 
public  procurements  and  concessions  procedures  to  achieve  social  policy  objectives. 
To this end, workshops will be organised in Member States. 

–  .Launch a new initiative under the Single Market Programme in 2022 supporting 
the creation of local and regional partnerships between social economy entities and 
mainstream businesses, enabling a ‘buy social’ business to business market.  

–  Enhance the use of social clauses in the Commission’s own tendering procedures 

whenever possible.  

In addition, the Commission will issue a report to enhance the use of socially responsible 
public procurement in Member States.- 

The Commission calls on Member States and other competent public authorities to 
foster and monitor the uptake of socially responsible public procurement in their territory 
in cooperation with social economy stakeholders. 

3.4. 

Promoting the social economy at regional and local levels 

Social  economy  business  models  bring  value  to  local  economies  and  societies  by 
fostering  their  inclusiveness,  resilience  and  sustainability.  They  have  strong  local  roots 
and  primarily  aim  to  serve  the  community  where  they  are  based,  retaining  population, 
economic  activities  and  revenues  locally.  As  such,  they  contribute  to  drive  local 
economic development in sectors specifically relevant to the regions, for example in rural 

38  https://ec.europa.eu/docsroom/documents/45767 

9 

 
                                                 
areas, in relation to agriculture and organic food production or in the blue economy. They 
foster  short  value  chains  facilitating  local  production  and  consumption,  and  support 
climate action and the circular economy.  They also contribute to the provision of social 
services that are often limited in rural and more remote areas. 

As  announced  in  the  Long  term  vision  for  EU’s  rural  areas39,  the  Commission  will 
undertake  a  series  of  actions  which  will  enable  entrepreneurs  and  small  businesses  to 
move  to  rural  areas  and  contribute  to  their  adaptation  to  the  changing  economic 
environment,  provide  opportunities  to  innovative  business  practices,  cooperate  and 
cluster as well as develop new sectors of the economy. A specific focus will be placed on 
short  supply  chains  of  agri-food  products,  directly  linking  producers  to  consumers  and 
complemented by actions developing employment and learning opportunities for  young 
people and the sustainable development of the bioeconomy. 

Many  European  regional  and  local  authorities  have  powers  to  develop  strategies  and 
instruments to support the development of local and regional social economy ecosystems. 
There is scope to better capitalise on this potential40.   

Exchange and cooperation between regional and local authorities is an effective way of 
enhancing  mutual  learning  on  the  social  economy.  This  is  true  in  particular  for  cross-
border  cooperation.  Support  is  available  under  the  European  Social  Fund  Plus 
(ESF+), the European Regional Development Fund (ERDF) and the Just Transition 
Fund to help local and regional authorities strengthen cooperation with  social economy 
actors,  also  as  part  of  smart  specialisation  strategies.  The  Just  Transition  Platform 
provides an active exchange platform for all stakeholders in regions particularly affected 
by the climate transition, including social economy actors 41. In addition, the Commission 
supports  peer  learning,  cooperation  and  community  building  among  regions  and 
local authorities. For example, the European Social Economy Regions initiative  and 
the  Social  Economy  Missions42  have  raised  the  profile  of  the  social  economy  at  local 
level  and  financially  supported  the  organisation  of  mutual  learning  sessions  with  local 
authorities  and  social  economy  stakeholders.  This  work  is  further  supported  by  local 
initiatives such as the EU Covenant of Mayors. 

The  Commission  will  further  develop  these  initiatives  supporting  transnational 
cooperation with a focus on enabling a just green and digital transition (see section 4.3). 
It  will  also  encourage  the  use  of  the  Interreg  Europe  Programme  and  the  Smart 
Specialisation  partnership  for  social  economy43 
foster  cross-border  and 
interregional exchanges. 

to 

The Commission will:  

–  Support Member States and stakeholders to boost the social economy and social 
innovation  in  rural  areas  through  the  future  EU  network  for  the  Common 
Agricultural  Policy  and  further  integrate  the  Clusters  of  Social  and  Ecological 

39  COM(2021) 345 final. 

40   OECD,  Regional  Strategies  for  the  Social  Economy:  Examples  from  France,  Spain,  Sweden  and 

Poland, Paris, 2020.  

41   See 

https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/finance-and-green-

deal/just-transition-mechanism/just-transition-platform_en 

42   See https://ec.europa.eu/growth/sectors/social-economy-eu_en 

43   See https://s3platform.jrc.ec.europa.eu/social-economy 

10 

 
                                                 
Innovation  (CSEI)44  in  European  industrial  cluster  policy  to  provide  guidance, 
support  research  and  new  capacity  building,  exchange  of  good  practices  and  cross-
border networking. 

–  Expand the European Social Economy Regions network to reinforce new regional 
and local partnerships in particular to boost digital and green transitions in territories. 

–  Enhance  networking  between  rural  businesses  through  the  Enterprise  Europe 
Network, as well as through calls for inter-regional cooperation through the European 
Social Economy Missions. The Long Term Vision for Rural Areas will put a specific 
focus on entrepreneurship and social economy in rural areas. 

The  Commission  calls  on  Member  States  to  set  up  local  social  economy  contact 
points playing the role of social economy ambassadors, providing peer to peer support, 
facilitating  access  to  EU  and  national  funding,  and  liaising  with  authorities  managing 
European funds. 

3.5. 

Promoting the social economy at international level  

Climate change and environmental degradation, demographic changes and economic and 
social  inequalities  are  global  challenges.  The  EU  and  third  countries  share  common 
objectives,  embedded  in  the  2030  Agenda  for  Sustainable  Development.  The  social 
economy  can  help  achieve  these  objectives  both  within  and  outside  the  EU.  Therefore, 
the actions announced in the other sections of this Plan can also inspire support for 
the social economy in non-EU countries.  

The  degree  of  development  of  the  social  economy  varies  significantly  across  third 
countries.  Some  have  long-standing  traditions  in  certain  areas  of  the  social  economy. 
Others  have  flourishing  social  innovation  or  social  enterprise  ecosystems,  but  in  many 
social  economy  models  are  only  beginning  to  emerge.  Stakeholders  can  benefit  from 
sharing experience and good practices, which can help accelerate reforms. 

Over  the  past  decade,  EU  international  cooperation  policy  has  supported  the 
development  of  the  social  economy.  For  example  the  EU  partnership  with  the 
International  Cooperative  Alliance45  has  improved  the  visibility  of  and  research  on 
cooperatives  worldwide,  as  well  as  facilitated  capacity  building  and  networking.  The 
Commission has also funded several regional capacity building programmes supporting 
and strengthening the social economy and social entrepreneurship ecosystems46.  

There is  also  scope to  strengthen dialogue and collaboration on the social economy 
with key international partners such as the OECD, the UN Task Force for Social and 
Solidarity Economy and the International Labour Organization. This will both help raise 
the  profile  of  the  social  economy  beyond  EU  borders  and  allow  better  sharing  of 
available  policy  guidance  and  tools  developed  by  the  European  Commission,  in 

44   CSEI  gather  social  economy  entities,  local  authorities  and  education  and  research  institutions  in  a 
jointly managed structure or project. They cooperate in a particular geographical area to improve local 
economic,  social  and  environmental  prosperity.  Their  fields  of  activity  are  diverse  and  range  from 
circular  economy  to  employment  and  job  inclusion,  sustainable  agriculture,  or  incubation  and  social 
entrepreneurial support. See https://ec.europa.eu/growth/industry/policy/cluster_en. 

45   https://www.coops4dev.coop/en 

46   For example, the MedUP! project and the Safir project in the Southern Mediterranean. 

11 

 
                                                 
particular  in  cooperation  with  the  OECD.  The  Commission  will  build  on  those 
initiatives and further promote the social economy on the international scene.  

In particular, the Commission will:  

–  Promote  the  targeting  of  social  economy  and  social  entrepreneurship  in  the 
programmes  under  the  Instrument  for  Pre-accession  Assistance  and  the 
Neighbourhood,  Development  and  International  Cooperation  Instruments,  for 
example by engaging with EU delegations and public authorities in non-EU countries, 
to facilitate the development of dedicated measures for the social economy. 

–  Improve  access  to  finance  for  social  entrepreneurs  in  the  Western  Balkans,  the 
Eastern Partnership and Southern  Neighbourhood, by launching actions to boost 
grassroots initiatives and support intermediaries to develop financial products adapted 
to the needs of social economy entities.  

The Commission encourages public authorities in non-EU countries to make use of 
freely available policy guidance and tools on social economy provided by the European 
Commission in cooperation with the OECD and the ILO47. 

4.  OPENING UP OPPORTUNITIES FOR SOCIAL ECONOMY ENTITIES TO DEVELOP 

4.1.  Business support and capacity building  

Most social economy entities have a strong entrepreneurial dimension and make a 
considerable  contribution  to  sustainable  growth  and  jobs.  They  engage  in  market 
exchanges and generate revenues from the sale of goods and services. Whilst many wish 
to  remain  small  and  local,  some  may  wish  to  expand  to  other  markets  in  the  EU  and 
beyond. Therefore, they can benefit from business development support to scale-up and 
develop. However, existing support schemes do not always consider the special features 
of  their  business  models  in  terms  of  governance,  profit  allocation,  working  conditions 
and  societal  impact.  Furthermore,  employees,  including  those  from  disadvantaged 
groups, have important upskilling and reskilling needs as in other parts of the economy. 
In  the  context  of  an  ageing  workforce  and  increasing  brain  drain,  intergenerational 
knowledge transfer and senior entrepreneurship can play an important role. 

Social economy business models can influence and create spill-overs to mainstream 
business.  A  growing  number  of  mainstream  businesses  are  moving  closer  to  social 
economy goals. For example, ʽbenefit corporationsʼ and ʽimpact enterprisesʼ incorporate 
sustainable  ambitions  in  their  missions,  while  other  enterprises  are  adopting  ad  hoc 
measures to improve transparency and engage more actively with communities. This and 
the  gradual  incorporation  of  environmental,  social  and  corporate  governance  (ESG) 
criteria  in  the  governance  of  mainstream  businesses  and  the  investment  policies  of 
financial  institutions  and  investment  funds,  are  creating  new  opportunities  for 
cooperation  and  cross-fertilisation  as  well  as  access  to  new  markets.  The  Commission 

47   E.g.  policy  briefs  on  social  economy  topics,  international  guides  on  legal  forms  and  social  impact 
see 
measurement,  and 
issued  an 
https://www.oecd.org/cfe/leed/social-economy/social-entrepreneurship.htm. 
information guide to ILO recommendation No. 193 on “Promoting cooperatives” and  will devote the 
2022 edition of the International Labour Conference (ILC) to “Social and Solidarity Economy (SSE) 
for a human-centred future of work”. 

the  Better  Entrepreneurship  assessment 

for  policymaking, 

ILO  has 

tool 

12 

 
                                                 
will also reinforce the interactions between social economy entities and mainstream 
businesses by promoting best practices such as in the field of social intrapreneurship48. 

Given  the  transversal  nature  of  the  social  economy,  schemes  addressing  innovation, 
investment  readiness,  business  internationalisation,  rural  development,  and  circular 
economy  are relevant  to  them,  even if often addressed to  SMEs in  general49.  However, 
relevant  information  tends  to  be  scattered  and  challenging  to  tap  into.  Even  when 
dedicated  initiatives  exist,  social  economy  stakeholders  frequently  are  not  sufficiently 
aware  of  them  or  find  them  complex.  Representative  networks  and  entrepreneurship 
networks can help, but such networks do not exist in all countries.   

The Staff Working Document accompanying this action plan50 provides an overview of 
relevant EU programmes and funding in the period 2021-2027. EU funding such as the 
European  cohesion  policy  funds,  are  implemented  at  national  and  regional  levels.  
Further funding sources are available at national, regional and local level, as well as from 
private actors.  Navigating this landscape can be difficult, particularly for small entities.  

Therefore, the Commission will: 

–  Under  the  Pact  for  Skills,  facilitate  the  setting  up  of  a  skills  partnership  for  the 
Proximity  and  Social  Economy  industrial  ecosystem,  in  the  context  of  the  Skills 
Agenda and the updated European Industrial Strategy. From 2022, dedicated hubs for 
networking,  knowledge,  guidance  and  resources  will  be  put  in  place  to  support  the 
signatories  of the Pact  in  their efforts to  offer upskilling and reskilling  opportunities 
for people of working age. 

–  Boost the scale-up and promote the internationalisation of the social economy by 
mobilising European level business support networks and partnership platforms such 
as  the  Enterprise  Europe  Network51  and  the  European  Cluster  Collaboration 
Platform52. 

–  Launch a new single EU Social Economy Gateway in 2023 to provide a clear entry 
point  for  social  economy  stakeholders,  other  relevant  actors  and  individuals  seeking 
information  on  relevant  EU  funding,  policies,  networks/platforms  and  initiatives.  It 
will  simplify  access  to  existing  support  and  enhance  awareness  about  EU  actions  in 
this field. In addition, the Gateway will facilitate access to relevant capacity building 
initiatives  and  provide  specific  guidance  on  EU  funding  opportunities  (trainings, 
workshops, webinars, practical guides and tools). 

Guidance on EU funding opportunities will also be provided via the InvestEU Advisory 
Hub,  the  Enterprise  Europe  Network  and  the  EU  Social  Services  Helpdesk.  For 
managing  authorities  of  cohesion  policy  funds,  guidance  is  available  through  the  FI 
compass platform53 that provides advisory support on financial instruments implemented 
under the shared management system. 

48   See, for example: https://www.leagueofintrapreneurs.com/  

49   Most social economy entities are SMEs. 

50   SWD (2021) 373, section 5.  

51   https://een.ec.europa.eu/ 

52   https://clustercollaboration.eu 

53  https://www.fi-compass.eu/ 

13 

 
                                                 
With  a  view  to  broader  capacity  building,  the  Commission  will  support  the 
development of social economy representative networks, in particular in EU Member 
States where social enterprises and social economy ecosystems are not developed to their 
full potential.  

The Commission calls on Member States to encourage mainstream business incubators 
to  extend  their  support  to  social  economy  entities,  to  improve  business  investment 
readiness support opportunities. The ‘Better Incubator’54 pilot launched by the European 
Commission can serve as inspiration.  

Broadening the appeal of entrepreneurship 

Social  entrepreneurship  and  the  social  economy  can  be  particularly  attractive  among 
young  people,  persons  with  disabilities,  with  a  migrant  background,  women  and  other 
under-represented entrepreneurs. Interestingly, the prevalence of female entrepreneurs is 
higher in social entrepreneurship than in  conventional entrepreneurship55 where women 
stand  only  for  30%56.  Raising  awareness  of  these  alternative  business  models  could 
improve  the  appeal  of  entrepreneurship  more  generally  and  help  labour  market 
integration.  Younger  generations  are  demonstrating  a  high  interest  in  sustainable 
development  and,  as  a  result,  the  social  economy  can  be  of  interest  to  them.  In  recent 
years,  entrepreneurship  education  has  become  more  common  in  education  systems. 
However, social economy business models, including the cooperative forms, are still far 
from  being  a  standard  component  in  all  entrepreneurship  education  curricula  and 
business courses.  

The Commission will: 

–  Launch  a  new  Youth  Entrepreneurship  Policy  Academy  in  2022  under  ESF+.  It 
will foster  youth  entrepreneurship, including  for  female  and social  entrepreneurs, by 
working with national policy makers and youth entrepreneurship networks. 

–  Foster  mutual  learning  between  social  economy  entrepreneurs  by  better 
promoting  the  Erasmus  for  Young  Entrepreneurs  programme57  to  social 
economy stakeholders. 

The  Commission  will  look  into  ways  to  foster  synergies  between  different  EU  funding 
programmes  to  identify  successful projects that could  be potentially scaled up to  social 
enterprises. 

The Commission calls on higher education institutions  to make full use of European 
instruments  such  as  the  European  Universities58  to  stimulate  social  economy  and 
entrepreneurship. 

54  https://betterincubation.eu/ 

55  OECD, Women's Social Entrepreneurship and Innovation, by Huysentruyt M., Paris, 2014. 

56  https://www.eib.org/en/publications/why-are-women-entrepreneurs-missing-out-on-funding-

executive-summary 

57  https://www.erasmus-entrepreneurs.eu/ 

58  https://ec.europa.eu/education/education-in-the-eu/european-education-area/european-universities-

initiative_en 

14 

 
                                                 
4.2. 

Improving access to funding  

Over  the  2014-2020  programming  period,  it  is  estimated  that  at  least  EUR  2.5  billion 
were  mobilised  from  the  EU  budget  to  support  the  social  economy59.  Overall,  the 
Commission’s ambition is to increase the level of support for the 2021-2027 period. 
It  is  expected  that  more  investment  will  be  mobilised,  thanks  to  a  higher  expected 
multiplier effect of InvestEU and to enhanced support for social impact and innovation. 
Other  EU  programmes  will  offer  dedicated  or  indirect  support  for  the  social  economy; 
these include for example the Employment and Social Innovation strand of the European 
Social Fund Plus, Horizon Europe, the Single Market Programme, Erasmus+, European 
Solidarity  Corps,  Creative  Europe  and  the  LIFE  Programme.  At  national  level,  EU 
funding will be available notably via the Cohesion  Policy  Funds and the Recovery and 
Resilience Facility. 

Following  targeted  support  provided  at  EU  and  national  level,  notably  through  the 
European  Programme  for  Employment  and  Social  Innovation  (EaSI)60,  more 
intermediaries  and  investors  are  aware  of  social  economy  entities,  including  social 
enterprises,  and  are  providing  repayable  finance  and  business  development  support  to 
address  their  needs.  Ethical  banks  have  played  an  important  role  in  this  regard.  In 
addition, the European Social Entrepreneurship Funds (EuSEF) label61 allowed investors 
to  easily identify funds that  invest in  social  enterprises. Since the 2008 financial crisis, 
the  micro-finance  sector  has  also  experienced  considerable  growth  in  the  EU  and 
neighbouring countries. Many micro-finance institutions are part of the social economy, 
with  a  dedicated  social  mission  to  help  individuals  from  vulnerable  groups  and  with 
difficulties to access the traditional banking system to create businesses, thereby creating 
jobs for themselves and others. Overall, the use of financial products such as guarantees 
has  proved  to  be  an  effective  way  of  mobilising  private  finance  for  social  enterprises 
from both mainstream and philanthropic investors. 

Despite  this  positive  development,  an  analysis  of  social  enterprise  finance  markets 
revealed a persisting mismatch between the demand and supply of repayable finance for 
social  enterprises  in  Europe,  both  in  terms  of  access  to  debt  and  equity.  In  the  field  of 
social enterprise finance, the funding gap was estimated at almost EUR 1 billion per year 
across Europe62, while in  the field  of microfinance the gap was estimated  at  EUR 12.9 
billion  per  year  across  the  EU63.  There  are  considerable  differences  among  and  within 
countries. In general, there is still ample room to improve the tailored supply of funding 
for the various stages of the enterprise life-cycle (i.e. seed, start-up, scaling).  

59  This  estimate  only  reflects  support dedicated  to  the  social  economy.  Other  broad  EU  measures  (e.g. 
supporting SMEs or innovation) benefited the social economy but are not reflected in these amounts. 

60  A comprehensive package of measures aimed at enabling access to finance for social enterprises was 
launched  under  the  EaSI  programme  during  2014-2020.  Support  included  loan  guarantees,  equity 
investments to build the capacity of financial intermediaries, grants for building social finance markets 
and for lowering transaction costs of investments, as well as advisory support. 

61  Regulation (EU) No 346/2013 on European social entrepreneurship funds.  

62  European Commission, Social enterprise finance market: analysis and recommendations for delivery 

options, by Spiess-Knafl W. and Scheck B, Luxembourg, 2019. 

63  European Commission, Microfinance in the European Union: Market analysis and recommendations 

for delivery options in 2021-2027, Luxembourg, 2020. 

15 

 
                                                 
Therefore, the Commission will: 

–  Launch new financial products in 2022 under the InvestEU programme aimed at 
mobilising  private  financing  targeted  at  the  needs  of  social  enterprises  at  different 
stages  of  development.  This  will  include  guarantees  to  enable  access  to  credit  for 
social enterprises and microenterprises, equity and quasi-equity investments in social 
enterprises  and  impact-driven  enterprises,  as  well  as  capital  investments  in  financial 
intermediaries64.  The  InvestEU  Advisory  Hub  will  provide  support  for  financial 
intermediaries65.   

Foundations  are  part  of  the  social  economy  and  they  also  play  an  important  role  in 
providing  grant  funding  for  the  social  economy,  social  innovation  and  other  EU  policy 
objectives.  There  is  a  growing  interest  among  philanthropic  actors  to  make  mission 
related  investments,  including  into  social  economy  organisations.  To  tap  into  this 
potential,  the  Commission  is  assessing  the  launch  of  dedicated  co-investment 
mechanisms  with  foundations  and  philanthropic  organisations  around  target 
mission  areas,  with  the  aim  of  channelling  additional  capital  towards  sustainability, 
inclusion, social innovation, housing and homelessness, media pluralism, and developing 
social impact ecosystems.  In its Media and Audiovisual Action Plan66, the Commission 
has already announced the creation of an equity-based pilot through InvestEU to support 
the news media sector. 

Depending on market interest, the InvestEU Advisory Hub may support the setting-up of 
cross-border  investment  platforms  that  would  group  together  partners  interested  in 
investments in the social economy.  

To complement the key action above, the Commission will: 

–  In  cooperation  with  the  InvestEU  implementing  partners,  ensure  that  InvestEU 
financial  intermediaries  providing  finance  to  social  enterprises  are  easy  to 
identify  by  potential  beneficiaries,  including  through  the  InvestEU  Portal  and  the 
Social Economy Gateway. 

–  Complement  financial  instruments  with  grant  support  for  building  social 
enterprise finance markets in Europe by supporting the setting up of new financial 
instruments and investment readiness programmes. 

–  Complement equity investment instruments with grant support aimed at lowering 

transaction costs for risk-capital investments into social enterprises. 

–  Support  EU  networks  active  in  the  areas  of  microfinance  and  social  enterprise 
finance  with  the  aim  of  improving  awareness  and  signposting  to  EU  funding, 
improving the capacity of member organisations, and providing research and data. 

64 

In addition to the financial products listed in this action, the Commission will assess  on a regular basis 
the market gaps and suboptimal investment situations faced by social economy  entities both in terms 
of  debt  and  equity,  and  develop,  where  required,  market  testing  and,  if  conclusive,  innovative  pilot 
financial products. 

65  Eligible  financial  intermediaries  are  listed  in  section  6.4.2.1.  of  Commission  Delegated  Regulation 

(EU) 2021/1078 of 14 April 2021 setting out the investment guidelines for the InvestEU Fund. 

66  COM(2020) 784 final. 

16 

 
                                                 
In addition to developing new instruments, Member States have the potential to introduce 
systemic measures to boost the funding available. Existing initiatives include the option 
for employees to contribute to socially oriented pension funds and saving schemes. 

Furthermore, an improved understanding and uptake of social impact measurement 
methodologies  can  enable  the  social  economy  to  communicate  its  impact  and  access 
impact-driven  finance  more  easily.  Numerous  methodologies  exist,  but  social  economy 
entities  report  that  the  diversity  of  tools  and  resources  available  can  be  daunting  and 
difficult  to  navigate,  especially  for  smaller  or  less  experienced  entities.    Approaches  to 
social impact measurement should be well thought through, proportionate and adapted to 
the diversity of players, size and stage of development.  

The Commission will: 

–  Support  the  development  of  social  impact  measurement  and  management  by 
mapping and reviewing existing practices and launching trainings for social economy 
stakeholders,  to  improve  understanding  and  facilitate  uptake  of  such  practices.  In 
addition,  the  Commission  will  work  with  stakeholders  to  develop  simple  standard 
methodologies for assessing social impact for the social economy actors in the EU in 
2023. 

The  draft  report  of  the  Platform  on  Sustainable  Finance  argues  that,  in  the  face  of  a 
pandemic and unanswered social questions around a sustainable transition, it is important 
to identify economic activities and entities that contribute to advancing social objectives. 
The  Platform  indicates  that  common  guidance  on  a  social  taxonomy  could  increase 
transparency  of  investments  and  prevent  social  washing.  As  required  under  the 
Taxonomy Regulation and as indicated in the action plan on the European Pillar of Social 
Rights,  the  Commission  will  prepare  a  report  on  the  possible  extension  of  the  EU 
Taxonomy for Sustainable Finance to social objectives. 

4.3.  Maximising  the  contribution  of  the  social  economy  to  the  green  and 

digital transitions 

The European Union aspires to become the first climate-neutral continent by 2050 while 
leaving no one behind. This, and the need to halt biodiversity loss, reduce pollution and 
improve sustainable use of natural resources, are at the heart of the European Green Deal. 
The Commission has proposed a set of legislative measures67 to reduce greenhouse gas 
emissions  by  at  least  55%  by  2030  compared  to  1990  levels.  Moreover,  as  part  of  the 
European Green Deal, the Commission launched the European Climate Pact68 supporting 
climate  pledges  by  citizens  and  organisations  with  direct  benefits  also  to  the  social 
economy.  

In  addition,  the  European  digital  transition  aims  to  empower  people  and  businesses  to 
embrace a human centred, sustainable and more prosperous digital future69. In particular, 
one of the targets  of the Action Plan for the  European Pillar of Social Rights  is  that at 
least 80% of those aged 16-74 should have basic digital skills. 

67  COM (2021) 550 final. 

68   COM (2020) 788 final. 

69  COM (2021) 118 final. 

17 

 
                                                 
Social  economy  contributes  to  the  green  transition  by  developing  sustainable 
practices,  goods  and  services  for  industrial  development,  for  instance  in  the  fields  of 
circular economy, organic agriculture, renewable energy, housing and mobility. By doing 
so, it also increases the acceptability of behavioural changes which contribute to climate 
mitigation. Many of these solutions are inclusive, addressing those most impacted by, 
or  with  more  difficulties  to  adapt  to,  the  green  transition,  for  example  through 
training and reskilling workers, by providing job opportunities in areas that are mindful 
of  the  environment,  and  by  developing  products  and  services  that  cater  to  the  needs  of 
local communities. This is a crucial contribution, as the area of adaptation receives little 
attention from commercial enterprises. 

Social economy entities seeking to achieve both social and environmental impacts, report 
the  need  for  support  to  identify  and  adopt  greener  practices,  build  capacity  and 
knowledge, including about funding opportunities for environmental goals.  

The social economy is equally an important proponent of a fair and inclusive digital 
transition. For instance, social economy actors working on "Tech4good" deploy digital 
technologies  (e.g.  Distributed  Ledger  Technology,  big  data,  artificial  intelligence, 
assistive  technology)  to  achieve  green  or  social  impact70.  Within  the  social  economy, 
new digital business models are emerging, for example in the collaborative and platform 
economy.  Platform  cooperatives  are  an  example  of  participatory-governed  businesses 
which  use  digital  platforms  to  facilitate  citizen  engagement  and  the  selling  of  locally 
produced  goods  and  services,  aiming  to  achieve  better  working  conditions  for  their 
members.  More  broadly,  digital  technologies  can  act  as  a  lever  by  facilitating  the 
replication  and  scale-up  of  successful  social  economy  initiatives  across  Member  States 
and  the  Single  Market.  Furthermore,  digital  technologies  can  help  to  improve  work 
processes in social economy entities. Data processing, management and collection are not 
yet  widespread  practices  within  social  economy  entities.  At  the  same  time,  pioneering 
digital social enterprises are enabling digital transitions by making technology adaptable, 
affordable  and  accessible  for  example  through  digital  commons  and  open  source 
technologies. 

Enabling  the  social  economy  business  models  as  agents  of  the  green  transition  and 
addressing their needs in terms of digital uptake, inclusive technology solutions and data 
access, will be key for their recovery post-COVID and their long-term resilience. 

The Commission will:  

–  Launch a transition pathway for the “Proximity and social economy” industrial 
ecosystem to further work with public authorities and stakeholders for a strengthened 
and more resilient social economy ecosystem in the green and digital transitions. The 
transition pathway will also contribute to the implementation of the action plan in this 
area71.   

–  Support transnational cooperation to boost the capacity of the social economy to 
adopt and develop greener practices, products and services, and to improve their 
digital capacities.  

70   Calderini  M.,  Chiodo  V.,  Gerli  F.,  Pasi  G.,  Social-Tech  Entrepreneurs:  Building  Blocks  of  a  New 

Social Economy, Stanford Social Innovation Review, 2021. 

71  See SWD (2021) 982. 

18 

 
                                                 
–  Launch  an  action  on  innovative  financing  in  the  New  European  Bauhaus  Lab 

aiming at creating a pilot project for mobilising philanthropic contributions. 

–  Develop a code of conduct on data use and management in the social economy, in 

cooperation with stakeholders to support the uptake of data and technology. 

In  addition,  the  Commission  will  ensure  relevant  business  support  structures  at 
European  level  share  experience  as  to  how  to  provide  tailored  support  to  social 
economy  entities.  This  will  include  the  Digital  Transformation  Accelerator  under  the 
European Digital Innovation Hubs programme and the Enterprise Europe Network.  

As the social economy has strong local roots, there is scope for public authorities, civil 
society,  social  economy  stakeholders  and  mainstream  business  to  develop  local  green 
deals  and  pool  resources  for  investment  and  innovation  at  local  and  regional  level  to 
ensure a just transition with local benefits.  

The Commission will:  

–  Work  with  cities  to  develop  Local  Green  Deals  or  green  citizenship  actions,  by 
reinforcing  the  involvement  of  social  economy  actors  and  communities  in  the  EU 
Covenant  of  Mayors,  the  European  Urban  Initiative,  the  Intelligent  Cities  Challenge 
Initiative, and the Circular Cities and Regions Initiative, the Just Transition Platform, 
the New European Bauhaus and the European Climate Pact. 

The contribution of the social economy is particularly remarkable for the development of 
a circular economy72 where it is pioneering activities and business models that retain the 
value of products and materials for as long as possible, reduce waste, provide cost-saving 
opportunities  to  citizens  ad  create  local  jobs,  especially  in  repair,  reuse,  sharing  and 
recycling  activities.  This  potential  can  be  further  promoted  by  raising  awareness  of  the 
scope for greater uptake of these practices and reinforcing partnerships with mainstream 
businesses  along  value  chains  and  public-private  partnerships 
involving  public 
authorities, research institutes, industry and social economy entities.  

The Commission will:  

–  Issue  guidance  on  how  to  support  uptake  and  partnerships  for  the  circular 
economy  between  social  enterprises  and  other  actors,  including  mainstream 
businesses,  and  raise  awareness  of  the  social  economy  in  the  context  of  the 
European Circular Economy Stakeholder Platform, Enterprise Europe Network 
and other networks. 

Social economy partners play a key role in the provision of social housing, cooperative 
housing  and  urban  development  strategies.  In  this  regard,  they  are  confronted  with  an 
annual investment gap of EUR 57 billion73, which has negative consequences in terms of 
enabling  access  to  housing  and  the  greening  of  the  EU  housing  stock.  Through  the 
Affordable Housing Initiative74, the Commission will enhance the renovation capacity 

72  COM (2020) 98 final and upcoming OECD policy brief Supporting the social economy’s contribution 

to the circular economy for a green and inclusive transition (publication expected early 2022).  

73  European  Commission,  Boosting  Investment  in  Social  Infrastructure  in  Europe.  Report  of  the  High-
Level Task Force on Investing in Social Infrastructure in Europe, by L. Fransen, G. del Bufalo and E. 
Reviglio, Luxembourg, 2018. 

74  https://ec.europa.eu/growth/sectors/social-economy-eu/affordable-housing-initiative_en 

19 

 
 
                                                 
in  social  and  affordable  housing  by  mobilising  cross-sectoral  partnerships  to  pilot  100 
renovation districts and by promoting qualitative, liveable, accessible, affordable homes. 

The  Commission  calls  on  the  EU  Member  States  and  regions  to  engage  with  the 
social economy in the development of their strategies in the framework of the green and 
digital  transitions,  and  to  make  better  use  of  existing  funding  to  enable  the  green  and 
digital transitions of the social economy. 

4.4.  Boosting social innovation 

Social  innovation  offers  new  ways  of  producing  goods,  organising  and  delivering 
services  and  new  forms  of  civic  participation  responding  to  concrete  social  needs  or 
societal  challenges75.  It  changes  social  relations  and  can  offer  new  policy  approaches, 
potentially  leading  to  systemic  changes.  By  operating  in  a  bottom-up  way  and  being 
close to communities, citizens and the problems they face, social economy  entities have 
the capacity to find innovative solutions76.  

In  recent  years,  the  Commission  has  launched  various  initiatives  to  promote  social 
innovation  (e.g.  through  Horizon  2020  including  the  European  Social  Innovation 
Competition,  EaSI  Programme  or  ESF).  Support  for  Social  Outcomes  Contracting  has 
also  been  provided  as  a  way  of  experimenting  social  innovation  and  finance77.  The 
Commission  will  continue  with  these  initiatives  and  build  a  European  community  of 
social innovators to foster peer learning and joint entrepreneurial ventures, expanding on 
the Alumni Network of the European Social Innovation Competition. 

However,  scaling  social  innovations  remains  a  challenge,  including  succeeding  in 
having  them  taken  up  by  policy  makers,  finding  partners  in  other  territories,  either 
nationally or abroad, and adapting the solutions developed elsewhere to local conditions. 
This  results  in  missed  opportunities  to  achieve  systemic  impact  and  realise  the  full 
potential  of  the  initial  investment  (often  including  public  funding).  The  Commission  is 
supporting the setting up of national competence centres for social innovation in order to 
boost  the  innovation  capacities  including  of  social  economy  actors  and  new  social 
entrepreneurs78.  There  is  also  scope  for  enhancing  collaborations  between  the  public 
sector, philanthropic and social investment  actors, to  better catalyse available resources 
and enable the uptake and replication of social innovation. 

The Commission will: 

–  Boost  social  innovation  through  a  new  approach  to  transnational  cooperation  under 
the  ESF+.  A  new  “European  Competence  Centre  for  Social  Innovation”  will  be 
set  up  in  2022.  It  will  organise  mutual  learning  and  capacity  building  for  relevant 
authorities and support structures. In addition, a new scheme of grants facilitating the 
transfer and/or scaling up of social innovation will be set up. 

–  Propose  in  2022  a  European  Social  Innovation  Catalyst  Fund  under  Horizon 
Europe engaging citizens, academics, entrepreneurs, philanthropists, impact investors 

75  https://eusic.challenges.org/the-european-social-innovators-insight-report/ 2021 

76  Examples  can  be  found  in  European  Commission,  Social  innovation:  inspirational  practices 

supporting people throughout their lives, Luxembourg, 2020. 

77   https://eiah.eib.org/about/initiative-social-outcomes-contracting 

78   https://ec.europa.eu/european-social-fund-plus/en/social-innovation-and-transnational-cooperation 

20 

 
                                                 
and  public  administrators,  with  the  aim  of  supporting  the  replication  and  scaling  of 
successful social innovations to advance the objectives of the five EU Missions79. 

In  addition,  the  Commission  will  provide  grants  under  Horizon  Europe  to  raise 
awareness and ease the access of social entrepreneurs to the resources of pan-European, 
national, regional and local innovation ecosystems. 

5.  ENHANCING RECOGNITION OF THE SOCIAL ECONOMY AND ITS POTENTIAL 

As illustrated by countries where it is most advanced, making the social economy more 
visible,  including  through  the  collection  of  appropriate  data  and  statistics,  is  key  to  its 
recognition and development. 

Since  2011,  the  Commission  has  contributed  to  raising  the  visibility  and  profile  of  the 
social economy, social enterprises and social innovation across the EU through various 
actions,  in  particular  with  regard  to  funding  or  research80.  In  Member  States  as  well, 
public  authorities  and  stakeholders  have  adopted  interesting  initiatives  to  boost  the 
visibility  and  understanding  of  the  social  economy,  including  specific  labels  and 
certification mechanisms, or large-scale communication campaigns.  

Evidence shows that the general public, including young and  disadvantaged people, 
social partners, stakeholders and funders, still have an insufficient awareness of the 
positive  impact  of  the  social  economy81.  As  this  affects  the  development  of  relevant 
support policies and market opportunities, boosting the visibility of the social economy 
needs  to  remain  a  priority.  The  Commission  will  use  this  Action  Plan  to  engage  with 
relevant stakeholders at all levels to maintain momentum.  

The Commission will:  

–  Carry  out  regular  communication  activities  under  a  long-term  communication 
approach  emphasizing  the  role  and  specificities  of  the  social  economy,  also  in 
cooperation with social economy stakeholders.  

The  Commission  also  encourages  the  organisation  of  regular  social  economy 
summits hosted by Member States and other actors. 

Having relevant data and statistics is also key to making social economy business models 
better  understood  and  ensuring  evidence-based  policy.  However,  existing  data  on  the 
social economy are often scarce, incomplete and difficult to compare. For example, 
only  a  few  Member  States  have  adapted  their  national  accounting  systems  to  collect 
supplementary  data  (”satellite  accounts”)  on  the  social  economy,  despite  the  financial 
support  available  from  the  EU  budget.  As  a  result,  statistics  on  the  size,  workforce, 

79  https://ec.europa.eu/info/research-and-innovation/funding/funding-opportunities/funding-programmes-

and-open-calls/horizon-europe/missions-horizon-europe_en.  

80  Examples include a label for European social entrepreneurship funds (Regulation (EU) No 346/2013), 
the  2020  European  Commission  comprehensive  mapping  study  of  social  enterprises  and  their 
ecosystems 
Innovation  Competition 
(https://eusic.challenges.org/). 

the  European  Social 

in  Europe, 

as  well 

as 

81  European Commission, Impact of the Commission’s Social Business Initiative (SBI) and its follow-up 
actions, by Haarich, S., Holstein, F., Spule, S., Galera, G., Franchini, B., Borzaga, C., Chiomento, S., 
Spiess-Knafl, W., Scheck, B., Salvatori, G., Luxembourg, 2020.  

21 

 
                                                 
development  and  challenges  of  the  social  economy  are  missing.  At  EU  level,  a  few 
comparative,  but  non-exhaustive,  data  collection  exercises  have  provided  estimates  but 
would  require  updating82.  Data  is  also  lacking  on  the  potential  size  and  weight  of 
philanthropic  donations  and  the  potential  to  leverage  this  kind  of  private  investment  to 
further  social  economy  and  other  EU  policy  goals.  The  Commission  will  therefore 
continue  to  support  evidence-based  policies,  by  mapping,  collecting  and  analysing 
quantitative and qualitative information on the social economy in all Member States. This 
will  also  contribute  towards  monitoring  the  Proximity  and  Social  Economy  industrial 
ecosystem. 

The Commission will:  

–  Launch  a  new  study  to  collect  quantitative  and  qualitative  information  on  the 

social economy covering all EU Member States.  

–  Launch a specific study on philanthropic donations in the EU.   

Finally,  academic  interest  in  the  social  economy  has  grown,  but  dialogue  and  cross-
fertilisation of ideas with the policy-making world could be improved. The Commission 
will seek to facilitate such exchanges. 

6.  THE WAY FORWARD 

During  the  last  decade  the  Commission  has  taken  significant  steps  to  boost  the 
development of the social economy and social enterprises as part of the European social 
market  economy.  The  past  achievements  need  to  be  consolidated  and  enhanced  so  that 
the  EU  can  meet  the  needs  and  reap  the  opportunities  stemming  from  demographic 
challenges  and  the  green  and  digital  transitions,  while  building  a  fair,  inclusive  and 
resilient economy as a long-term answer to the consequences of the Covid-19 crisis.  

This action plan provides a European framework until 2030 to further support the 
development of the social economy. It sets out a series of actions to be put in place in 
conjunction with the implementation of the European Pillar of Social Rights Action Plan 
and achievement of its employment and poverty reduction targets.  

The  Commission  will  highlight  the  potential  of  the  social  economy  to  create  jobs  and 
foster social cohesion in the context of the European Semester process and Member State 
implementation of the Employment Guidelines. 

The action plan was developed in cooperation with social economy stakeholders, and 
its implementation will equally require their commitment and cooperation at all levels – 
EU, national, regional and local, and international.  

Successful implementation will also depend on joining forces with Member States. The 
Commission  encourages  Member  States  to  adopt  or  update  their  social  economy 
strategies  and  measures  in  cooperation  with  social  economy  stakeholders.  To  this 
end, it calls on them to designate social economy coordinators in their institutions for 

82  See,  for  example,  European  Economic  and  Social  Committee,  Recent  evolutions  of  the  Social 
Economy in the European Union, by Monzon J. L. and Chaves R., 2017 and  European Commission, 
Social  enterprises  and  their  ecosystems  in  Europe  -  Comparative  synthesis  report,  by  Borzaga  C., 
Galera G., Franchini B., Chiomento S., Nogales R. and Carini C., Luxembourg, 2020. 

22 

 
                                                 
leading  their  strategies,  for  ensuring  consistent  policy-making  across  government 
departments,  and  for  facilitating  access  to  EU  and  national  funding  and  liaising  with 
authorities managing structural funds. 

The  Commission  will  assist  Member  States  in  the  definition  of  their  strategies  and 
measures for the social  economy and support the work of social  economy  coordinators 
with a view to the implementation and follow-up on this action plan. 

The Commission will also work in close partnership with other EU institutions and 
bodies,  namely  the  European  Parliament,  the  Committee  of  the  Regions  and  the 
European Economic and Social Committee, and the European Investment Bank Group.  

The  Commission  invites  social  economy  stakeholders,  EU  institutions  and  bodies  to 
endorse  this  Action  Plan  and  actively  contribute  to  its  implementation  with  the  direct 
involvement of social economy stakeholders. It will work with its expert group on social 
economy and social enterprises which will be renewed at the end of the current mandate.  

The Commission will take stock of the implementation of the action plan in 2025 and 
publish a report indicating progress and new developments.  

23 

 
 
 
KEY COMMISSION ACTIONS AND TIMELINE FOR THEIR IMPLEMENTATION  

Propose a Council Recommendation on developing social economy 
framework conditions. (see section 3.1) 

Organise webinars and workshops for public officials in relation to various 
policy fields with relevance for the social economy. (see section 3.1) 

Launch a new initiative under the Single Market Programme supporting 
the creation of local and regional partnerships between social economy 
entities and mainstream businesses, enabling a ‘buy social’ business to 
business market. (see section 3.3) 

Improve access to finance for social entrepreneurs in the Western 
Balkans, the Eastern Partnership and Southern Neighbourhood, by 
launching actions to boost grassroots initiatives and support intermediaries to 
develop financial products adapted to the needs of social economy entities. 
(See section 3.5) 

Launch a new single EU Social Economy Gateway to provide a clear entry 
point for social economy stakeholders, other relevant actors and individuals 
seeking information on relevant EU funding, policies and initiatives. (see 
section 4.1) 

Launch a new Youth Entrepreneurship Policy Academy, which will foster 
youth entrepreneurship, including for female and social entrepreneurs by 
working with national policy makers and youth entrepreneurship networks. 
(see section 4.1) 

Launch new financial products under the InvestEU programme aimed at 
mobilising private financing targeted at the needs of social enterprises at 
different stages of development.  (see section 4.2) 

Support the development of social impact measurement and management 
to assist social economy actors in the EU. (see section 4.2) 

Launch a transition pathway for the “Proximity and social economy” 
industrial ecosystem to further work with public authorities and stakeholders 
on the implementation of the action plan in this area. (see section 4.3)  

Boost social innovation through a new approach to transnational cooperation 
under the ESF+ and the setting up of a new “European Competence Centre 
for Social Innovation”.  (see section 4.4) 

2023 

2022, 
2023 

2022 

2023 

2023 

2022 

2022 

2023 

2022 

2022 

24