Proposal for a COUNCIL RECOMMENDATION on developing social economy framework conditions
Date: 2023-06-13
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU employment policy, innovation, labour market, poverty, professional qualifications, social economy, social integration, social rights, sustainable development, vocational training

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   EUROPEAN COMMISSION  Strasbourg, 13.6.2023  COM(2023) 316 final 2023/0179 (NLE)  Proposal for a COUNCIL RECOMMENDATION on developing social economy framework conditions {SWD(2023) 208 final}  
 
EXPLANATORY MEMORANDUM 

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CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  European  Pillar  of  Social  Rights  acts  as  a  compass  setting  the  direction  to  achieve  a 
strong  social  Europe  that  is  fair,  inclusive  and  where  everyone  has  the  opportunity  to 
thrive. Completing the specific actions set out in the European Pillar of Social Rights action 
plan requires a joint effort by EU institutions, national, regional, and local authorities, social 
partners and civil society. 

Challenges  such  as  climate  change,  digitalisation,  growing  inequalities,  and  demographic 
change  have  prompted  the  European  Union  (EU)  to  develop  policies  aimed  at  pioneering  a 
fair, sustainable  and inclusive transition,  with the European Green Deal1 at its heart. The 
far-reaching  consequences  of  the  COVID-19  pandemic  and  of  Russia's  war  of  aggression 
against Ukraine have emphasised the urgent need for this transition. 
Social  economy  entities,  which  employ  around  13.6  million  people  in  the  EU2,  are  at  the 
forefront  of  this  transition.  They  have  demonstrated  a  remarkable  ability  to  foster  resilient 
and  inclusive  communities  and  business  models,  democratic  participation  and  an 
economy that works for all. They also make an important contribution to GDP in countries 
with the most developed social economy structures3. 

The  social  economy  is  an  umbrella  term  covering  a  wide  range  of  private  entities  that 
prioritise people, social, and environmental causes over profit. While the scope and the terms 
used  to  describe  the  social  economy  concept  can  vary  depending  on  national  traditions,  it 
typically  comprises  cooperatives,  mutual  benefit  societies,  associations  (including 
charities), foundations, and  social enterprises.  In addition  to  putting people and the planet 
first,  these  entities  share  other  key  principles,  including  reinvesting  profits  in  activities  that 
serve the collective interest or society, and democratic and/or participatory governance. 

The  proposal  for  a  Council  Recommendation  on  developing  social  economy  framework 
conditions  was  announced  in  the  European  Commission’s  action  plan  for  the  social 
economy4  in  2021.  In  the  action  plan,  the  Commission  proposed  specific  steps  to  take  by 
2030 to boost social innovation, foster the social economy and its business and organisational 
models, and increase its transformative power for the economy and society. The focus is on 
enabling the social economy to grow by creating favourable conditions, facilitating start-
up and scaling, and raising awareness of its potential. 

The action plan has been welcomed by the European Parliament in a resolution5. It is in line 
with the 2015 Council Conclusions on the promotion of the social economy as a key driver of 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  ‘The  European  Green  Deal’, 
COM(2019) 640 final. 
Figure covering the EU-28. See European Economic and Social Committee, Monzon, J. L., Chaves, R., 
Recent evolutions of the Social Economy in the European Union, 2017, p. 66. 
For example, 10% of GDP in France, https://www.economie.gouv.fr/leconomie-sociale-et-solidaire. 
Communication from the Commission, ‘Building an economy that works for people: an action plan for 
the social economy’, COM(2021) 778 final. 
European  Parliament  resolution  of  6 July  2022  on  the  EU  action  plan  for  the  social  economy 
(2021/2179(INI)). 

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economic and social development in Europe6, which agreed on the importance of promoting 
the  social  economy  and  invited  the  European  Commission  to  take  action  to  boost  the 
development of the sector. 

The added value of the social economy 

The social economy can play an important role in tackling a wide range of societal challenges. 
By  leveraging  its  strengths,  such  as  creating  quality  jobs,  fostering  social  and  labour-
market  inclusion,  and  promoting  sustainable  development,  the  social  economy  has  the 
potential to help achieve the European Pillar of Social Rights and its core principles of equal 
opportunities  and  access  to  the  labour  market,  fair  working  conditions,  and  social 
protection and inclusion. Specifically, the social economy can play a strong role in reaching 
the  European  Pillar  of  Social  Rights  action  plan's  ambitious  EU  headline  2030  targets  of 
having at  least  78% of the population  aged 20 to 64 in  employment and  at  least  60% of all 
adults  participating  in  training  every  year,  and  reducing  the  number  of  people  at  risk  of 
poverty or social  exclusion by  at  least  15 million,  contributing to the national  commitments 
made by Member States to achieve these targets7. 

It does so by creating jobs and economic opportunities that help young and older people and 
disadvantaged groups (such as the long-term unemployed, people suffering from mental or 
physical  ill-health,  the  inactive,  the  low-skilled,  people  with  disabilities  and  people  with  a 
migrant,  minority  racial  or  ethnic  background,  including  Roma)  integrate  into  the  labour 
market and into society. At the same time, it fosters fair working conditions by involving 
employees in governance  and decision-making.  This  is  especially important  as these  groups 
often face a particularly high risk of poverty or social exclusion. The opportunities offered by 
the social economy, especially when in cooperation with mainstream businesses, can also be a 
stepping stone to other sectors of the job market. The social economy also employs a high 
proportion of women8 and provides services that help women join the labour market, such as 
childcare.  The  proposal  therefore  contributes  to  the  gender  equality  strategy  2020-20259, 
which  aims  to  close  gender  gaps  in  the  labour  market  and  achieve  equality  across  different 
sectors of the economy. 

By providing employment opportunities that are tailored to the needs of individuals and the 
local economy  and by offering training and reskilling opportunities, social economy entities 
can help workers develop the skills and knowledge  needed to respond to the  changes in 
the labour market.  This  is  particularly relevant in the context of the twin transition. Skills 
development  can  potentially  alleviate  labour  shortages  and  contribute  to  overall  economic 
growth.  For  instance,  social  economy  entities  often  provide  on-the-job  training  and  work-
based  learning  programmes,  which  benefit  from  the  knowledge  sharing  culture  that  stems 
from the collective and collaborative ethos in the sector. Some social economy entities offer 

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Council  Conclusions on the promotion of  the  social  economy  as a key driver of economic and social 
development (15071/15). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  The  European  Pillar  of  Social 
Rights Action Plan, COM/2021/102 final. 
In some countries, the percentage is significantly higher than in the mainstream private sector or even 
the public sector. For example, in France, 40% of people working in the private sector (excluding the 
social  economy)  and  63%  in  the  public  sector  are  women,  against  68%  in  the  social  economy. 
CNCRESS,  État  des  lieux  de  l’égalité  femmes-hommes  dans  l’Économie  Sociale  et  Solidaire,  2019, 
p. 6. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  ‘A  Union  of  Equality:  Gender 
Equality Strategy 2020-2025’, COM(2020) 152 final. 

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training courses on digital and green skills that are accessible to disadvantaged groups, and by 
doing so make a contribution to a fairer transition.  

Thanks  to  the  bottom-up  way  these  entities  tend  to  operate,  being  close  to  communities, 
citizens  and  the  problems  they  face,  social  economy  entities  have  great  potential  to  act  as 
social innovators and find solutions that can be scaled up and/or replicated and contribute to 
systemic  social  change.  The  social  economy  can  find  innovative  ways  to  provide  essential 
social services, complementary to the public services offered at national level, by striving to 
deliver  quality  and  person-centred  social  services  in  a  joined  up  and  cost-effective 
manner.  For  example,  social  economy  entities  can  be  important  partners  for  public 
authorities  in  providing  high-quality  care  services,  as  recognised  by  the  European  care 
strategy10. 
The social economy can also support the EU's industrial strategy11. The strategy presents the 
challenges  faced  by  the  14  industrial  ecosystems,  among  which  the  ‘proximity  and  social 
economy’  ecosystem  to  achieve  the  twin  transition  and  increase  its  resilience.    Social 
economy entities have a strong potential to develop sustainable products and services and 
operate  inclusive  business  models.  Pioneering  examples  include  energy  communities  and 
cooperatives,  organic  agriculture,  sustainable  tourism  and  circular  products  and  services. 
Social economy entities and innovators are often seen as frontrunners in the green transition, 
helping to make it a fairer and inclusive transition by anchoring it in solidarity values.  

Social economy business models bring value to  local economies and societies by fostering 
inclusiveness, resilience and sustainability. They are strongly rooted in the local economy and 
aim  to  serve  the  community  where  they  are  based,  applying  the  notion  of  place-based 
innovation that both makes the most of local resources and assets and feeds economic gains 
and  revenues  back  into  the  local  economy.  This  helps  stimulate  the  local  economy  and 
regeneration  by  boosting  new  businesses  and  job  creation  in  sectors  specifically  relevant  to 
those areas. This includes agriculture and organic food production in rural and remote areas, 
in  the  EU  Outermost  Regions12,  in  areas  in  need  of  economic  regeneration,  and  in  the  blue 
economy. Social economy entities  can  also  benefit the  circular economy  by  boosting  action 
on sustainable product design, scaling up repair and reuse, and increasing the collection and 
recycling  of  waste,  thus  promoting  a  functioning  market  for  secondary  raw  materials.  In 
addition,  as  they  help  revitalise  rural  and  remote  areas,  social  economy  entities  have  the 
potential to help alleviate the demographic trends in these regions.  

Challenges 

The  visibility  and  recognition  of  the  social  economy  at  national  and  regional  levels  has 
improved in recent  years13. Over half of the Member States have put in place targeted legal 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  on  the  European  care  strategy, 
COM(2022) 440 final. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, ‘Updating the 2020 New Industrial 
Strategy: Building a stronger Single Market for Europe’s recovery’, COM(2021) 350 final. 
The  EU  counts  nine  outermost  regions  –  French  Guiana,  Guadeloupe,  Martinique,  Mayotte,  Reunion 
Island  and  Saint-Martin  (France),  Azores  and  Madeira  (Portugal),  and  the  Canary  Islands  (Spain)  – 
located in the western Atlantic Ocean, the Caribbean basin, the Amazonian forest and the Indian Ocean. 
In total, they are home to 4.8 million citizens. 
European Commission, Directorate-General for Employment, Social  Affairs and Inclusion, Carini, C., 
Borzaga,  C.,  Chiomento,  S.,  et  al., Social  enterprises  and  their  ecosystems  in  Europe  –  Comparative 
synthesis report, Publications Office, 2019. 

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frameworks and policies for social enterprises and/or the social economy. However, evidence 
suggests that the measures taken by Member States have not always led to effective results. 
This can be attributed to: 

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a lack of clarity and understanding around the principles and scope of the social 
economy; 

an insufficient recognition of the social economy’s added value for society and the 
economy, particularly as a response to emerging trends; 

support measures that lack consistency over time and/or unnecessarily restrict social 
economy entities to specific activities or types of business models14; 

the fragmentation of legal frameworks;  

the limited administrative and policy capacity of Member States; 

the  lack  of  accurate  data  and  statistics  on  the  sector,  which  limits  the 
understanding of its size and impact; and 

a lack of tailored funding for the different stages in the life cycle of social economy 
entities15. 

These shortcomings lead to an untapped potential of the sector in many EU countries. For 
instance, in 2017 the share of paid employment the sector accounted for ranged between 0.6% 
and 9.9% across Member States, with an EU average of 6.3%16.This illustrates the different 
levels of development of the sector across the EU.  

Adapting policies and laws to the needs of the social economy is a complex task due to the 
range of different  entities  and alternative business models that compose it, and the range of 
sectors in which they operate. For example, social entities operate in agriculture, construction, 
reuse  and  repair,  waste  management,  energy  and  climate,  financial  and  insurance  activities, 
real estate, education, care, arts, and more besides. 

The  social  economy  is  therefore  affected  by  several  horizontal  and  sectoral  policies  and 
provisions  such  as  the  provisions  governing  labour  market  policy,  healthcare  and  care 
services,  education,  skills  and  training,  taxation,  public  procurement,  competition,  industry, 
local and regional development, and territorial cooperation. As a result, effectively supporting 
the  social  economy  requires  an  all-encompassing  approach  that  takes  account  of  all  the 
interconnected aspects that have an impact on the sector. 

Objective of the proposal 

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For example, the legal status in some countries suitable for certain categories of social enterprises, e.g. 
Work  Integration  Social  Enterprises  (WISEs),  may  be  too  restrictive  in  the  social  needs  that  these 
organisations  must  pursue.  In  addition,  an  over-restrictive  transposition  of  EU  rules,  such  as  public 
procurement rules, may end up penalising social economy entities. 
The funding gap for social enterprises in Europe was estimated at nearly EUR 1 billion per year, while 
the  gap  for  microfinance  was  estimated  at  EUR  12.9  billion  per  year  across  the  EU.  To  support  the 
social economy, it is estimated that at least EUR 2.5 billion were mobilised from the EU budget over 
the 2014-2020 programming period, and the Commission’s ambition is to increase the level of support 
for the 2021-2027 period. 
Figure covering the EU-28. See European Economic and Social Committee, Monzon, J. L., Chaves, R., 
Recent evolutions of the Social Economy in the European Union, 2017, p. 69. 

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To  tap  the  potential  of  the  social  economy  effectively  requires  both  adapting  the  legal 
frameworks  and  targeted  policies  by  public  authorities17.  In  addition,  an  effective 
organisation  of  administrative  and  institutional  structures  is  key  to  understanding  the 
specific needs of the sector and to facilitating communication with its stakeholders. 

To tackle the complexity of this task, the Commission has developed guidance and resources 
for public authorities on a range of topics over the years. Examples include the Buying Social 
guide, the report Making socially responsible public procurement work, the manual for legal 
frameworks  for  social  enterprises,  policy  briefs  on  social  impact  measurement  and  circular 
economy,  studies  on  digitisation  and  cooperation  between  social  economy  and  traditional 
enterprises, and a report on clusters of social and ecological innovation. 

We  can  therefore  draw  on  these  resources  and  tools,  and  on  the  extensive  experience  of 
Member States  and non-EU  partner  countries, to create comprehensive, coherent, and  up-
to-date  recommendations  on  how  to  promote  the  social  economy  across  policy  fields  and 
legal frameworks. 

The proposed initiative aims to improve access to the labour market and social inclusion by 
supporting  Member  States  in  integrating  the  social  economy  into  their  socio-economic 
policies and creating support measures and a favourable environment for the sector. By 
supporting the social economy, the proposal also aims to stimulate sustainable economic and 
industrial  development,  contribute  to  territorial  cohesion  in  the  Member  States  and  support 
social innovation. This will be achieved by drawing on research, experience and stakeholder 
feedback  to  formulate  recommendations  on  how  to  tailor  public  policies  and  legal 
frameworks to support the social economy, particularly in areas where it is less developed. It 
will  also  formulate  recommendations  on  how  to  adapt  administrative  and  institutional 
structures to support these entities and engage with stakeholders in the sector. 

The proposed initiative has synergies with other actions announced in the action plan for the 
social economy. Above all, it is closely linked to the social economy gateway, launched in 
parallel with this proposal, which aims to raise awareness and facilitate access to information 
and  resources  to  support  the  social  economy.  The  gateway  will  provide  information  on  EU 
policy and funding programmes, guidance, facts and figures, and examples of best practice. 

Two  Commission  staff  working  documents  on 
this 
Recommendation  provide  factual  information  on  the  state  of  play  of  legal  frameworks  for 
taxation in Member States and the jurisprudence and case law on these matters: 

taxation  matters  accompany 

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[SWD(2023)  xyzx]  on  ‘Relevant  taxation  frameworks  for  social  economy 
entities’,  which  is  based  on  analyses  and  input  provided  by  Member  States’ 
authorities and social economy stakeholders, and 

[SWD(2023)  xyzx]  on  ‘Non-discriminatory  taxation  of  charitable  organisations 
and  their  donors:  principles  drawn  from  EU  case-law’,  which  provides  a 
description  of  this  key  principle  as  interpreted  by  the  Court  of  Justice  of  the 
European Union. 

For  example,  the  report  on  the  Buying  for  social  impact  project  highlights  that  socially  responsible 
public procurement is easier to implement in countries where legal frameworks or legal forms for social 
enterprises are in place. 

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As announced in  the  Commission work programme  for  202318, the Commission will  also 
table an initiative on cross-border activities of associations in the single market, which aims to 
remove regulatory and administrative barriers in the single market for associations operating 
in more than one Member State. The initiative will help strengthen the economic and societal 
impact of associations in the EU. The goal of the legislative initiative ties in with the aim of 
the  Council  recommendation  to  foster  social  inclusion  and  access  to  the  labour  market  by 
promoting  an  enabling  environment  for  the  social  economy  that  improves  regulatory  and 
administrative conditions for social economy entities. 

Consistency with existing policy provisions in the policy area 

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The  action  plan  for  the  social  economy  follows  the  Social  Business  Initiative19  (2011),  a 
short-term action plan that aimed to support social enterprise growth and spur discussion on 
medium/long-term  strategies  for  the  sector.  It  builds  on  the  Start-up  and  Scale-up 
initiative20  (2016),  which  had  the  wider  aim  of  providing  innovative  start-ups  with 
opportunities  to  become  world-leading  companies  by  improving  partnerships,  developing 
skills,  accessing  finance,  and  removing  barriers  for  start-up  entrepreneurs  (including  social 
economy entities) to scale up their business in the single market. 

Together  with  the  action  plan  for  the  social  economy,  this  proposal  further  advances  the 
implementation  of  the  recommendations  outlined  in  the  2015  Council  Conclusions  on  the 
promotion  of  the  social  economy  as  a  key  driver  of  economic  and  social  development  in 
Europe. 

In addition to contributing to the targets set under the European Pillar of Social Rights and 
its action plan, as mentioned above, this proposal is linked to other initiatives in employment 
and social inclusion policy areas. 

To  successfully  implement  the  European  care  strategy  and  improve  the  situation  for  both 
care receivers and caregivers across the EU, it is essential to secure the shared commitment of 
all stakeholders. Social economy entities bring an added value to the provision of high-quality 
care  services  as  they  take  a  people-centred  approach  and  reinvest  their  profits  into  their 
mission  and  local  communities.  Creating  a  supportive  environment  for  the  social  economy, 
including greater access to funding, can help reach the goal of providing quality, affordable, 
and accessible care services across the EU. It can also lead to fairer working conditions for its 
workers, especially through the promotion of social dialogue in line with the proposal for a 
Council recommendation on strengthening social dialogue in the European Union21. This 
also  applies  to  the  goals  set  under  the  European  Child  Guarantee22,  as  social  economy 
entities  can  play  a  role  in  designing  and  delivering  quality  services  for  children,  especially 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  –  Commission  work  programme 
2023: A Union standing firm and united, COM(2022) 548 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  ‘Social  Business  Initiative: 
Creating  a  favourable  climate  for  social  enterprises,  key  stakeholders  in  the  social  economy  and 
innovation’, COM(2011) 0682 final. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions ‘Europe's next leaders: the Start-up 
and Scale-up Initiative’, COM(2016) 0733 final. 
Proposal  for  a  Council  recommendation  on  strengthening  social  dialogue  in  the  European  Union, 
COM(2023) 38 final. 
Council Recommendation (EU) 2021/1004 of 14 June 2021 establishing a European Child Guarantee. 

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children in need, such as inclusive education, after-school care, leisure and cultural activities. 
The EU strategy on the  rights of the  child23 notably strengthens the EU’s commitment to 
combating  child  poverty  and  protecting  children  and  adolescents  from  violence.  Promoting 
measures  to  tackle  violence  and  discrimination,  in  particular  against  vulnerable  children, 
would benefit from support from all parts of society, including social economy entities. 

The  proposal  also  has  links  to  the  Union  of  Equality  and  related  strategies,  including  the 
gender equality strategy 2020-2025, the strategy for the rights of persons with disabilities 
2021-203024,  the  LGBTIQ  equality  strategy25,  the  EU  anti-racism  action  plan26  and  the 
EU Roma  strategic  framework 2020-203027. By addressing the challenges experienced by 
disadvantaged  and  underrepresented  groups,  the  social  economy  can  help  people  integrate 
into the labour market and combat social exclusion.   

The  proposal  also  contributes  to  the  action  plan  on  integration  and  inclusion  for  2021-
202728, aimed at supporting successful integration and inclusion of migrants and EU citizens 
with  a  migrant  background  into  EU  societies.  The  social  economy  integrates  migrants,  for 
instance  by  offering  work  opportunities  through  work  integration  social  enterprises  that  are 
adapted to their needs. 

By supporting the social economy in integrating young people into the labour market through 
training,  apprenticeships,  and  jobs  (including  the  promotion  of  social  entrepreneurship), 
Member  States  can  increase  the  number  of  quality  opportunities  available  to  young  people, 
paving the way to the implementation of the Reinforced Youth Guarantee29. 

The social economy can also contribute to reducing the skills gap by reskilling and upskilling 
individuals  through  on-the-job  training  and  other  forms  of  training.  This  proposal  therefore 
has  ties  with  the  European  Skills  Agenda30  and  its  goals  of  strengthening  sustainable 
competitiveness,  ensuring  social  fairness,  and  building  resilience.  In  May  2022,  the 
Commission launched a Pact for Skills partnership to bolster the skills of people working in 
the  proximity  and  social  economy  sector.  An  alliance  is  implementing  the  Blueprint  for 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, ‘EU Strategy on the rights of the 
child’ (COM(2021) 142 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the  Committee  of the Regions, ‘Union of Equality: Strategy for 
the Rights of Persons with Disabilities 2021-2030’, COM(2021) 101 final. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  ‘Union  of  Equality:  LGBTIQ 
Equality Strategy 2020-2025’, COM(2020) 698 final.  
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  ‘A  Union  of  equality:  EU  anti-
racism action plan 2020-2025’, COM(2020) 565 final. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the  Committee of the Regions, ‘A Union of Equality: EU Roma 
strategic framework for equality, inclusion and participation’, COM(2020) 620 final. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social  Committee and the  Committee  of  the  Regions,  ‘Action plan on Integration and 
Inclusion 2021-2027’, COM(2020) 758 final. 
Council Recommendation of 30 October 2020 on A Bridge to Jobs – Reinforcing the Youth Guarantee 
and  replacing  the  Council  Recommendation  of  22  April  2013  on  establishing  a  Youth  Guarantee 
2020/C 372/01 (OJ C 372, 4.11.2020, p. 1–9). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  ‘European  Skills  Agenda  for 
sustainable competitiveness, social fairness and resilience’, COM(2020) 274 final. 

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sectoral  cooperation  on  skills  with  a  focus  on  social  enterprises  active  in  job  market 
integration31. 

• 

Consistency with other Union policies 

The proposal is complementary to and consistent with a number of other EU initiatives. 

It is in line with the European Commission’s European Green Deal, a plan to make the EU 
climate neutral and resource efficient by 2050, and the Digital Decade policy programme32, 
a  vision  for  digital  sovereignty  in  Europe  based  on  clear  objectives  and  principles. 
Specifically, the social economy can contribute to and benefit from ongoing action under the 
Long-term  competitiveness  strategy33,  the  Green  Deal  industrial  plan34,  the  Net  Zero 
Industry  Act35  and  REPowerEU36  to  boost  the  competitiveness  of  Europe’s  net-zero 
industry  and  support  the  fast  transition  to  climate  neutrality.  To  highlight  and  reinforce  this 
role,  the  European  Commission  released  in  November  2022  a  Transition  Pathway  for  the 
‘Proximity  and  Social  Economy’  industrial  ecosystem37,  co-created  with  stakeholders, 
which  identifies  fourteen  action  areas  under  the  EU  industrial  strategy.  The  Council 
recommendation  of  16 June  2022  on  ensuring  a  fair  transition  towards  climate 
neutrality38  also  recognises  that  social  economy  entities  can  help  ensure  this  transition  is 
socially fair and just.  
The Commission has issued guidance to the Member States39 that encourages them to tackle 
labour and skill shortages in the update of their national energy and climate plans to ensure 
the supply of a skilled workforce for the clean energy transition. Social economy entities can 
be included in these strategic planning instruments. 

The proposal supports the implementation of the circular economy action plan40 adopted in 
March 2020. To address the triple crises of climate, biodiversity loss and pollution, the action 
plan  aims  to  mainstream  action  on  the  circular  economy  to  achieve  a  climate-neutral, 
resource-efficient and competitive economy. The cross-sectoral nature of the social economy 
and  its  pioneer  role  in  creating  jobs  linked  to  the  circular  economy  can  contribute  to  the 

31 

32 

33 

34 

35 

36 

37 
38 

39 

40 

B-WISE is a project funded by the Erasmus+ programme, which aims to develop a European strategy to 
address the skills needs, in particular digital skills, in the Work Integration Social Enterprises sector. 
Decision  (EU)  2022/2481  of  the  European  Parliament  and  of  the  Council  of  14  December  2022 
establishing the Digital Decade Policy Programme 2030 (OJ L 323, 19.12.2022, p. 4–26). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions  ‘Long-term competitiveness of the 
EU: looking beyond 2030’, COM(2023) 168 final. 
Communication  from  the  Commission  to  the  European  Parliament,  The  European  Council,  The 
Council, The European Economic and Social Committee and The Committee of the Regions, ‘A Green 
Deal Industrial Plan for the Net-Zero Age’, COM(2023) 62 final. 
COM(2023)  161  -  Proposal  for  a  regulation  of  the  European  Parliament  and  of  the  Council  on 
establishing  a  framework  of  measures  for  strengthening  Europe’s  net-zero  technology  products 
manufacturing ecosystem (Net Zero Industry Act). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, ‘REpowerEU Plan’, COM(2022) 
230 final. 
Report, Transition pathway for Proximity and Social Economy. 
In line with the Council Recommendation of 16 June 2022 on ensuring a fair transition towards climate 
neutrality (OJ C 243, 27.6.2022, p. 35–51). 
Commission Notice on the Guidance to Member States for the update of the 2021-2030 national energy 
and climate plans (OJ C 495, 29.12.2022, p. 24–55). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions ‘A new Circular Economy Action 
Plan For a cleaner and more competitive Europe’, COM(2020) 98 final. 

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development of the sector. In particular it can contribute to  the Commission's push to boost 
sustainable  products  driven  by  the  proposal  on  establishing  a  framework  for  setting 
ecodesign requirements for sustainable products41 and to promote the repair and reuse of 
goods as stated in the circular economy action plan. The proposal is also relevant to the SME 
strategy42, which supports small and medium enterprises in all sectors by reducing regulatory 
burden and improving access to markets and funding. 

Lastly,  the  proposal  contributes  to  reaching  the  Sustainable  Development  Goals  (SDGs) 
adopted in 2015 under the United Nation’s 2030 Agenda for Sustainable Development. The 
social  economy  contributes  to  most  SDGs  in  some  form,  particularly  to  the  goal  to  end 
poverty (SDG 1) and to ensure decent work and economic growth (SDG 8). The international 
political  momentum  for  the  social  economy  is  growing,  following  the  adoption  of  the 
Resolution  concerning  decent  work  and  the  social  and  solidarity  economy  at  the  110th 
International Labour Conference of the International Labour Organisation on 10 June 202243, 
the OECD Recommendation on the social and solidarity economy and social innovation 
also  on  10 June  202244,  and  the  adoption  of  the  United  Nations  Resolution  on  promoting 
the social and solidarity economy for sustainable development45 on 18th April 2023. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal will be based on Article 292 of the Treaty on the Functioning of the European 
Union, in conjunction with Article 149 TFEU and Article 153 TFEU points (h) and (j). 

• 

Subsidiarity (for non-exclusive competence) 

The  proposal  provides  recommendations  to  Member  States  on  strategies  and  policies  that 
recognise,  support  and  build  on  the  contributions  that  the  social  economy  makes  to  help 
people access the labour market and social inclusion. It includes recommendations on action 
to  support  an  even  development  of  the  social  economy  across  the  EU  and  on  promoting 
innovative  approaches  to  employment  in  collaboration  with  the  sector.  It  fulfils  the 
subsidiarity principle  as  it sets out  key  principles, which are  particularly  useful for Member 
States where the sector is less developed, while giving flexibility to the Member States in how 
they will implement the recommendations. 

In particular, the proposal takes account of the wide range in traditions, scope and terms used 
in the social economy in the Member States. It does not significantly affect Member States’ 
financial equilibrium or their ability to maintain or bring in more ambitious policies. 

• 

Proportionality 

The  proposal  supports  and  complements  Member  States’  action  to  improve  access  to  the 
labour  market  and  social  inclusion  through  measures  that  help  create  a  supportive 
environment for the social economy. It acknowledges the wide range in national practices and 
systems and recognises that  different  national, regional or local  circumstances could lead to 

41 

42 

43 
44 
45 

Proposal  for  a  Regulation  on  establishing  a  framework  for  setting  ecodesign  requirements  for 
sustainable products and repealing Directive 2009/125/EC  (2022/0095 (COD). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, 'An SME Strategy for a sustainable 
and digital Europe’ (COM/2020/103 final). 
https://www.ilo.org/ilc/ILCSessions/110/reports/texts-adopted/WCMS_848633/lang--en/index.htm. 
https://www.oecd.org/cfe/leed/social-economy/social-economy-recommendation/. 
https://unsse.org/wp-content/uploads/2023/04/A-77-L60.pdf. 

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differences in  how  the recommendations  are implemented. As a result, Member States have 
the flexibility to tailor implementation of the proposal to their unique circumstances. 

The proportionality principle was central to selecting the right instrument for the proposal. 

• 

Choice of the instrument 

The instrument is a proposal for a Council recommendation. It builds on the existing body of 
EU  law  and  policy  and  is  in  line  with  the  type  of  instruments  available  for  EU  action  on 
employment and social policy. As a non-binding legal instrument, a recommendation reflects 
the premise that the Member States have legal competence on social policy. It also reflects the 
range in traditions, scope, terms, and levels of development of the social economy throughout 
the  EU.  A  recommendation  signals  the  Member  States’  commitment  to  the  objectives  and 
measures in the text and provides a strong basis for cooperation at EU level in this area. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EVALUATIONS, 

EX POST 

OF 

STAKEHOLDER 

Ex post evaluations/fitness checks of existing legislation 

Not applicable. 

• 

Stakeholder consultations 

The  Commission  carried  out  an  extensive  consultation  process  involving  the  general  public 
and a wide range of stakeholders on this initiative. The process included publishing a ‘call for 
evidence’, an outlook opinion from the European Committee of the Regions, and meetings 
with  social  partners,  civil  society  organisations,  the  Employment  and  the  Social 
Protection Committees, and the Expert Group on social economy and social enterprises. 
The European Parliament Social Economy Intergroup and the European Economic and 
Social  Committee  (through  the  Social  Economy  Category)  also  provided  input  into  the 
expected scope of the proposal.  

The  aim  of  these  consultations  was  to  achieve  a  balanced  overview  of  all  the  types  of 
stakeholders concerned – Member States, social economy entities, funding intermediaries and 
academics. The consultation process provided insights that fed into the preparatory work and 
brought  in  additional  perspectives  to  the  proposal.  Details  on  the  consultation  process  are 
analysed in the staff working document accompanying this proposal. 

• 

Collection and use of expertise 

In addition to the input received during the stakeholder consultation process, the proposal is 
underpinned  by  extensive  evidence  collected  over  recent  years  on  policy  and  legal 
frameworks for the social economy. The key sources of evidence were: 

– 

– 

the  2020  mapping  of  social  enterprise  ecosystems  in  all  EU  countries,  for  which 
researchers consulted over 750 stakeholders, including policymakers, representatives 
of  social  enterprises,  social  enterprise  networks  and  other  support  organisations, 
academics, and experts from across all Member States and beyond; 

in-depth  reviews  on  social 
the  Better  Entrepreneurship  Policy  Tool, 
entrepreneurship  policy  in  several  Member  States,  and  the  international  guides  on 
Social  Impact  Measurement  for  the  Social  and  Solidarity  Economy  and  on  Legal 
Frameworks  for  the  Social  and  Solidarity  Economy  developed  in  cooperation  with 
the OECD; 

the 

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– 

– 

– 

– 

• 

the  OECD  Recommendation  on  the  social  and  solidarity  economy  and  social 
innovation  adopted  on  10  June  2022  and  the  Policy  Guide  on  Social  Impact 
Measurement for the Social and Solidarity Economy; 

the  2017  study  Recent  evolutions  of  the  social  economy  in  the  European  Union 
carried  out  by  the  International  Centre  of  Research  and  Information  on  the  Public, 
Social and Cooperative Economy for the European Economic and Social Committee;  

the 2020 study on the impact of the Commission’s 2011 social business initiative and 
its  follow-up  actions,  based  on  more  than  300  interviews  conducted  with  a  large 
variety of stakeholders from across all EU Member States; and 

the Transition pathway Proximity & Social Economy and the inputs received during 
the co-creation process. 

Impact assessment 

The  instrument  proposed  –  a  Council  recommendation  –  offers  guidance  on  how  to  adapt 
policy and legal frameworks to support social economy entities and gives Member States the 
flexibility  to  design  and  implement  measures  in  line  with  their  national  practices  and 
depending on the nature of its social economy ecosystems. Therefore, no impact assessment is 
needed. 

The proposal has the potential to improve the enabling environment for the social economy, 
especially  in  Member  States  where  the  social  economy  is  less  developed.  This  will  help 
achieve a more even development of the sector throughout the EU. 

• 

Regulatory fitness and simplification 

Not applicable. 

• 

Fundamental rights 

This Recommendation respects the fundamental rights and observes the principles recognised 
by the Charter of Fundamental Rights of the European Union. The social economy prioritises 
social  and  environmental  responsibility,  participation,  and  democratic  governance,  which 
aligns with the Charter’s focus on promoting equality and solidarity. 

4. 

BUDGETARY IMPLICATIONS 

This proposal has no financial implications for the EU budget. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Paragraph (23) recommends Member States to adopt or update their social economy strategies 
within 18 months of adoption of the proposal. 

Paragraph  (24)  recommends  Member  States  to  review  and  improve  their  administrative  and 
institutional set-ups at all levels of governance. 

Paragraph (25) recommends Member States to monitor and evaluate their implementation of 
the Council recommendation at national level and to involve regional and local authorities and 
stakeholders  in  the  process.  The  Commission  will  track  implementation  through  regular 
consultations with Member States via the Employment Committee and the Social Protection 
Committee. 

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Under  Paragraph  (26),  Member  States  are  asked  to  formally  report  on  their  progress  in 
implementing the Recommendation no later than four years following its adoption and again 
five years after that. 

To  minimise  the  reporting  burden  on  EU  governments,  the  exact  timing  of  the  first  report 
should coincide with the reporting framework envisaged by the OECD Recommendation on 
the social and solidarity economy and social innovation. On that basis, the Commission will 
prepare  a  report  on  implementation  of  this  Recommendation  and  will  submit  it  to  the 
Employment Committee and the Social Protection Committee for discussion. 

• 

Explanatory documents (for directives) 

Not applicable. 

• 

Detailed explanation of the specific provisions of the proposal 

§ 1-3 indicate the objectives and scope of this Recommendation. 

§ 4 provides definitions of social economy and social enterprise. 

§  5-8  recommend  Member  States  put  in  place  measures  that  foster  access  to  the  labour 
market and social inclusion through the social economy. More specifically: 

§ 5 recommends Member States put in place labour market policies to support employees in 
social  enterprises  and  their  reintegration  in  the  labour  market,  to  support  collaboration 
between public  employment services, social economy entities and mainstream  businesses to 
better  reach  out  to  young  people  not  in  education,  employment,  or  training,  promote  social 
entrepreneurship as a means to create self-employment and employment at large, enable more 
people with disabilities to join the labour market, and promote social dialogue and collective 
bargaining to ensure fair working conditions. 

§ 6 recommends Member States acknowledge and support the contribution of social economy 
entities  to  social  inclusion  and  include  them  in  the  design  and  delivery  of  social  and  care 
services, housing as well as education and activities for children and young people. 

§  7  recommends  Member  States  support  training  and  skills  development  for  the  social 
economy  by  building  skills  intelligence  related  to  market  needs,  working  together  with  the 
social  economy  to  facilitate  training  for  employees,  aiming  at  bridging  the  skills  gap  and 
facilitating  their  transition  to  the  labour  market,  and  creating  national  or  transnational 
competence  centres  on  the  social  economy  in  cooperation  with  vocational  education  and 
training providers. 

§  8  recommends  Member  States  to  reinforce  the  role  of  social  economy  entities  to  support 
social innovation and in key sectors of local development and employment, and to build on 
the  social  economy’s  contribution  to  a  fair  twin  transition,  while  advancing  sustainable 
economic and industrial development and territorial cohesion. 

§ 9-21 recommend Member States develop  enabling frameworks for the social economy by 
designing and implementing comprehensive strategies for the sector. More specifically: 

§  13  recommends  Member  States  improve  access  to  public  and  private  funding  for  the 
social economy by enabling social finance ecosystems and using the funding available, such 
as EU funds. 

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§ 14-16 recommends Member States improve social economy entities’ access to markets by 
fostering  the  use  of  socially  responsible  public  procurement  in  line  with  the  possibilities 
offered  by  the  current  European  legal  framework  on  public  procurement  and  supporting 
cooperation between social economy entities and mainstream businesses. 

§ 17 recommends Member States make the most of the current scope of the State aid rules 
under EU law to support the social economy. 

§ 18 recommends Member States ensure that taxation systems do not hinder the development 
of  the  social  economy,  assess  whether  tax  systems  sufficiently  encourage  its  development, 
and enhance cross-border philanthropy. 

§  19  recommends  Member  States  support  the  uptake  by  social  economy  entities  of  social 
impact  measurement  and  management  processes  used  to  measure  and  assess  the  social 
impact of a particular project or organisation. 

§  20-21  recommend  Member  States  raise  awareness  about  the  social  economy  and  its 
contributions,  including  by  monitoring  the  development  and  performance  of  the  social 
economy through research, data and statistics. 

§  22  welcomes  the  Commission’s  intention  to  support  implementation  of  the  Council 
recommendation, including through follow-up action. 

§ 23-26 refer to the implementation, monitoring and evaluation process. 

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2023/0179 (NLE) 

Proposal for a 

COUNCIL RECOMMENDATION 

on developing social economy framework conditions 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 292 in conjunction with Article 149 and Article 153, points (h) and (j) thereof, 

Having regard to the proposal from the European Commission, 
Having regard to the opinion of the Committee of the Regions46, 

Whereas: 

(1) 

(2) 

(3) 

46 

47 

48 
49 

The  European  Pillar  of  Social  Rights47  proclaimed  on  17 November  2017  sets  out  a 
number of principles to support fair and well-functioning labour markets and welfare 
systems.  They  include  Principle  1  on  the  right  to  quality  and  inclusive  education, 
training  and  lifelong  learning,  Principle  2  on  gender  equality,  Principle  3  on  equal 
opportunities, Principle 4 on active support to employment, Principle 5 on secure and 
adaptable employment, and Principles 11 and 16-20 on social protection and inclusion 
of children, people with disabilities and the homeless, and access to essential services, 
health care and long-term care. 
In  June  2021,  the  European  Council,  in  line  with  the  Porto  Declaration48,  welcomed 
the Union’s headline targets for 2030, set out in the European Pillar of Social Rights 
action plan49. These targets aim to achieve an employment rate of at least 78%, at least 
60%  of  all  adults  participating  in  training  annually,  and  at  least  15  million  fewer 
people at risk of poverty or social exclusion (of which at least 5 million children). The 
Member States then set national targets in all three areas to help achieve these shared 
aims. 

Despite the progress made over the past decade to reduce poverty and social exclusion, 
95.4 million people remained at risk in 2021. The poverty risk has increased for people 
living  in  (quasi)jobless  households,  and  the  depth  and  duration  of  poverty  has 
worsened  in  many  Member  States.  Quality  and  sustainable  employment  is  key  to 
alleviating this problem. Thanks to the way the social economy works, its actions and 

Opinion  from  the  Committee  of  the  Regions  on  ‘Creating  an  enabling  environment  for  the  social 
economy – the local and regional perspective’ (CDR 5492/2022). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  ‘The  European  Pillar  of  Social 
Rights Action Plan’, COM(2021) 102 final. 
https://www.consilium.europa.eu/en/press/press-releases/2021/05/08/the-porto-declaration/. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions,  The  European  Pillar  of  Social 
Rights Action Plan, COM/2021/102 final. 

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(4) 

(5) 

(6) 

the  aims  it  pursues,  the  social  economy  has  a  key  role  to  play  in  improving  social 
inclusion  and  equal  access  to  the  labour  market.  It  therefore  contributes  to  the 
successful implementation of the European Pillar of Social Rights. 

Social economy entities can create and retain quality jobs; they contribute to the social 
and  labour-market  inclusion  of  disadvantaged  groups  and  to  equal  opportunities  for 
all. This is in line with the framework of an inclusive recovery, as highlighted in the 
Guidelines  for  the  employment  policies  of  the  Member  States  laid  down  by  Council 
Decision  (EU)  2022/229650.  They  can  stimulate  sustainable  economic  and  industrial 
development  and  promote  the  active  participation  of  citizens  in  society.  Social 
economy entities also make a significant contribution to Europe’s welfare systems by 
complementing public services, revitalising Europe’s rural and depopulated areas and 
playing an important role in international development policy. 

On 9 December 2021, the European Commission adopted an action plan for the social 
economy51.  The  action  plan  contributes  to  the  European  Commission’s  priority  of 
building  ‘an  economy  that  works  for  people’  and  is  aligned  with  the  2015  Council 
Conclusions on the promotion of the social economy as a key driver of economic and 
social  development  in  Europe52.  In  the  action  plan,  the  Commission  put  forward 
concrete measures to be implemented both at Union and national level. The measures 
aim  to  boost  social  innovation,  support  the  development  of  the  social  economy  and 
unlock its social and economic transformative power. The measures focus on creating 
the right conditions for the social economy to thrive, creating opportunities for social 
economy entities to start up and scale up, and ensuring that the social economy and its 
potential are  more visible. The European Parliament welcomed the action plan  in  its 
resolution issued on 6 July 202253. 

The social economy, also referred to in some Member States as the solidarity economy 
and/or  social  and  solidarity  economy,  encompasses  a  diverse  range  of  entities  with 
different  business  and  organisational  models 
that  prioritise  social  and/or 
environmental purpose over profit. These entities can take various legal forms, such as 
cooperatives,  mutual  benefit  societies,  associations  and  foundations,  and  also 
encompass  social  enterprises,  which  are  recognised  as  a  specific  legal  form  in  some 
Member States.  They share the common principles of reinvesting most of their profits 
to pursue their social and/or environmental purposes and practicing democratic and/or 
participatory  governance.  The specific form  of governance and management  adopted 
by  social  economy  entities  varies  according  to  their  nature,  scale,  and  context  of 
operation. The principle of democratic or participatory governance thus takes different 
forms, ranging from the direct engagement of members in the governance processes to 
the  representative  involvement  of  members  or  partners  in  separate  governance  and 
management  functions.  For  example,  in  cooperatives,  mutual  benefit  societies,  and 
associations,  this  principle  often  takes  the  form  of  "one  person,  one  vote”.  The 
decision-making  processes  in  social  economy  entities  is  characterised  by  a  set  of 

50 

51 

52 

53 

Council Decision (EU) 2022/2296 of 21 November 2022 on guidelines for the employment policies of 
the Member States (OJ L 304, 24.11.2022, p. 67–77). 
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’, COM(2021) 778 final. 
Council  Conclusions on the promotion of  the  social  economy  as a key driver of economic and social 
development (15071/15). 
European  Parliament  resolution  of  6 July  2022  on  the  EU  action  plan  for  the  social  economy 
(2021/2179(INI)). 

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(7) 

(8) 

(9) 

control  systems  and  relationships  between  the  different  agents  participating  in  the 
entity,  including  managers,  partners,  employees  and  beneficiaries.  By  bringing 
together  these  different  agents,  social  economy  entities  promote  a  multi-stakeholder 
effort  centred  around  a  culture  of  participation,  accountability,  and  transparency  and 
aimed at achieving a common goal.   

Social  economy  entities  often  strive  to  create  economic  opportunities  that  promote 
social  inclusion  and  the  integration  of  disadvantaged  groups,  including  people  with 
disabilities  and  people  with  mental  health  issues,  into  the  labour  market.  Work 
integration social enterprises are a type of social enterprise that focus on helping these 
groups of people integrate in  society  and in  work  by providing  jobs  at  various skills 
levels  with  inclusive  and  flexible  working  conditions.  For  example,  providing 
linguistic support to migrant workers and adapted tasks and working environments for 
people  with  disabilities  can  offer  them  a  route  out  of  poverty  and  social  exclusion. 
These  job  opportunities  can  serve  as  stepping  stones  to  other  sectors  of  the  labour 
market,  helping  to  overcome  barriers  to  employment  for  the  long-term  unemployed 
and other people experiencing difficulties in accessing the job market. 

New social businesses can be a powerful  vehicle for job  creation and positive social 
change. Social economy can provide opportunities for some underrepresented groups, 
such  as  women  and  young  people  to  enter  the  labour  market  or  set  up  social 
businesses.  According  to  the  Global  Entrepreneurship  Monitor,  an  estimated  55%  of 
the world’s social entrepreneurs are  men and 45% are women, while in  general self-
employment  women  are  outnumbered  by  two-to-one  by  men.  According  to  a  recent 
Eurobarometer  on  young  people’s  attitudes  to  social  entrepreneurship,  young  people 
value  the  importance  of  social  and  environmental  goals  and  participatory  leadership. 
Member  States  could  consider  ways  to  minimise  disincentives  for  potential 
entrepreneurs, such as ensuring they maintain access to proper social safety protection. 
Some  Member  States  have  reduced  social  security  contributions  as  an  incentive  for 
social  economy  entities  to  hire  staff.  Ensuring  there  is  an  enabling  framework  for 
business  transfers  to  employees  to  form  worker  cooperatives  can  also  be  a  way  to 
ensure  continuation  of  small  and  family  businesses  and  to  avoid  job  losses,  for 
instance in case of restructuring. 

Social  economy  entities  also  promote  the  inclusion  of  young  people,  particularly 
young  people  not  in  employment,  education  or  training.  They  provide  training  and 
skills  development  programmes  and  apprenticeships  referred  to  in  the  Council 
Recommendation  of  15  March  2018  on  a  European  Framework  for  Quality  and 
Effective Apprenticeships54, and employment opportunities. They therefore contribute 
to the goals set by the Youth Guarantee referred to in Council Recommendation of 30 
October  2020  on  A  Bridge  to  Jobs  –  Reinforcing  the  Youth  Guarantee55  and  the 
Council  Recommendation  of  16  June  2022  on  a  European  approach  to  micro-
credentials  for  lifelong  learning  and  employability56.  Union  funding  such  as  the 

54 

55 

56 

Council  Recommendation  of  15  March  2018  on  a  European  Framework  for  Quality  and  Effective 
Apprenticeships (OJ C 153, 2.5.2018, p. 1–6). 
Council Recommendation of 30 October 2020 on A Bridge to Jobs – Reinforcing the Youth Guarantee 
and replacing the Council Recommendation of 22 April 2013 on establishing a Youth Guarantee (OJ C 
372, 4.11.2020, p. 1–9). 
Council  Recommendation  of  16  June  2022  on  a  European  approach  to  micro-credentials  for  lifelong 
learning and employability (OJ C 243, 27.6.2022, p. 10–25). 

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European  Social  Fund  Plus  programme  established  by  Regulation  (EU)  2021/105757 
can support social economy entities in this role. To this end, successful collaborative 
initiatives  between  public  employment  services  and  social  economy  entities  have 
taken place in Member States58. Under these initiatives, social economy entities play 
an important role in identifying people in need of assistance and in developing tailored 
plans to help them achieve social and occupational integration, including training and 
work opportunities. 

(10)  Social economy entities can promote fair working conditions by involving employees 
in  their  governance  and  decision-making.  Promoting  social  dialogue  and  collective 
bargaining in the social economy, can improve the working conditions of employees. 
Member States can foster and build on this aspect of the social economy and make use 
of 
the  design  and 
implementation of active labour market policies59. 

involving  social  economy  entities 

its  know-how  by 

in 

(11)  The  social  economy  contributes  to  the  Union  of  Equality  by  promoting  the  social 
inclusion  of  disadvantaged  and  underrepresented  groups  through  the  provision  of 
social  and  care  services  (including  childcare,  health  care  and  long-term  care),  social 
housing  and  support  for  children  and  young  people  with  special  needs.  They  help 
reduce inequalities, such as the gender employment gap, both by directly employing a 
large proportion of women and by providing care services that enable caregivers, the 
majority of whom are women, to join the labour market. As an important partner for 
the public sector, the social economy can make a valuable contribution to the design 
and  delivery  of  residential,  home  and  community-based  care  services.  Through 
partnership initiatives, public authorities and social economy entities can provide high-
quality, accessible and affordable care services.  

(12)  Vocational education and training systems play a crucial role in equipping people with 
the  skills  needed  for  the  workplace,  for  personal  development  and  for  citizenship. 
They also help ensure a skilled workforce that can contribute towards a fair twin green 
and  digital  transition.  Social  economy  entities  provide  job  opportunities,  on-the-job 
training, and work-based learning programmes tailored to the needs of individuals and 
the  local  economy.  They  have  the  potential  to  help  roll  out  individual  learning 
accounts  referred  to  in  Council  Recommendation  of  16  June  2022  on  Individual 
Learning  Accounts60.  Therefore,  they  can  contribute  to  achieving  a  skilled  and 
adaptable  workforce  able  to  respond  to  changes  in  the  labour  market,  potentially 
easing job-to-job transition and alleviating labour shortages, therefore contributing to 
overall  economic  growth.  The  Member  States  can  tap  this  potential  when  building 
skills intelligence, facilitating training, and designing education curricula. 

57 

58 

59 

60 

Regulation (EU) 2021/1057 of the European Parliament and of the Council of 24 June 2021 establishing 
the  European  Social  Fund  Plus  (ESF+)  and  repealing  Regulation  (EU)  No  1296/2013  (OJ  L  231, 
30.6.2021, p. 21–59). 
One example is the Belgian support provided to ‘collectief maatwerk’, which includes financial support 
to work-integration social enterprises. 
One  example  is  the  French  initiative,  Territoires  Zéro  Chômeurs  de  Longue  Durée,  which  aims  to 
combat  long-term  unemployment  by  setting  up  non-profit  organisations  in  areas  with  high  long-term 
unemployment rates to employ local residents on permanent contracts to carry out useful activities for 
the  community,  such  as  recycling,  childcare  and  community  gardening.  Similar  initiatives  have  been 
introduced in Groeningen in the Netherlands and Marientaal in Austria. 
Council Recommendation of 16 June 2022 on individual learning accounts 2022/C 243/03 (OJ C 243, 
27.6.2022, p. 26–34). 

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(13)  The  challenges  posed  by  the  twin  transition  and  demographic  change  need  to  be 
tackled  at  regional  and  local  levels  to  achieve  economic,  social  and  territorial 
cohesion.  Social  economy  entities  generally  operate  in  a  bottom-up  way,  close  to 
communities,  citizens,  and  the  problems  they  face,  often  acting  as  social  innovators 
and  finding  solutions  that  can  be  scaled  up  and/or  replicated  and  that  contribute  to 
systemic  social  change.  For  example,  the  social  economy  could  offer  upskilling 
opportunities  to  low-skilled workers  from  sectors that are undergoing  major  changes 
and  provide  affordable  basic  goods  to  low-income  groups.  In  remote  and  rural  areas 
with  fewer  employment  and  educational  offers,  social  economy  entities  can  provide 
much-needed  opportunities,  rendering  these  regions  more  attractive.  Developing  the 
EU’s social economy ecosystems therefore contributes to alleviating the consequences 
of  ageing,  depopulation,  and  other  demographic  trends,  and  to  promoting  local 
economic  and  industrial  development,  notably  in  rural  and  remote  areas  and  in  the 
EU's  outermost  regions,  such  as  in  agriculture,  organic  food  production,  and  in  the 
blue economy. 

(14)  Promoting  community-led  local  development  and  favourable  ecosystems  for  social 
innovation  reinforces  the  social  economy  and  drives  change  to  a  climate-neutral 
economy in line with the European Green Deal61 and the Green Deal industrial plan62. 
Given  the  important  role  of  the  social  economy  in  the  development  of  the  circular 
economy,  designing  cross-cutting  and  coherent  industrial  policy  measures  on  reuse, 
repair, and recycling could promote a functioning market for secondary raw materials, 
optimising  the  social  economy’s  contribution  to  the  objectives  set  by  the  circular 
economy  action  plan63,  and  boost  the  competitiveness  of  Europe’s  net-zero  industry. 
Social economy entities operating in the digital field have demonstrated the potential 
to  empower citizens and businesses  to  participate in  an inclusive and human-centred 
digital transition and play an active role in reaching the objectives  and targets of the 
Digital Decade 2030 policy programme established by Decision (EU) 2022/248164 and 
the European Declaration on Digital Rights and Principles for the Digital Decade65. To 
boost  the  resilience  of  this  twin  transition  to  a  green  and  digital  society,  the 
Commission updated its Union industrial strategy in May 2021. The strategy sets out 
the  challenges  faced  by  the  14  industrial  ecosystems,  including  the  ‘proximity  and 
social economy’ ecosystem. 

(15)  To enable the social economy to fulfil its potential in supporting labour market access, 
social  inclusion,  skills  development,  territorial  cohesion  and  sustainable  economic 
development, it needs an enabling framework. Since the social economy is influenced 
by  horizontal  and  sectoral  policies  and  provisions,  an  enabling  framework  needs  to 
factor  in  the  specific  features  of  the  social  economy  and  the  additional  barriers  that 
social  economy  entities  face  in  their  development  that  limit  their  scope  to  operate 

61 

62 

63 

64 

65 

Communication  from  the  Commission  to  the  European  Parliament,  The  European  Council,  The 
Council,  The  European  Economic  and  Social  Committee  and  The  Committee  of  the  Regions,  ‘The 
European Green Deal’, COM(2019) 640 final. 
Communication  from  the  Commission  to  the  European  Parliament,  The  European  Council,  The 
Council, The European Economic and Social Committee and The Committee of the Regions, ‘A Green 
Deal Industrial Plan for the Net-Zero Age’, COM(2023) 62 final. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions ‘A new Circular Economy Action 
Plan For a cleaner and more competitive Europe’, COM(2020) 98 final. 
Decision  (EU)  2022/2481  of  the  European  Parliament  and  of  the  Council  of  14  December  2022 
establishing the Digital Decade Policy Programme 2030 (OJ L 323, 19.12.2022, p. 4–26). 
European Declaration on Digital Rights and Principles for the Digital Decade, COM(2022) 28 final. 

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alongside  mainstream  businesses.  Social  economy  entities  do  not  seek  to  maximise 
efficiency  gains  and  profits  but  to  create  positive  societal  outcomes.  They  need 
support measures and favourable financial, administrative and legal environments that 
take account of the specific features of their business models in terms of governance, 
profit allocation, working conditions and impact. These measures enable them to, for 
example,  employ  workers  that  are  less  productive  or  provide  social  services  at 
accessible  prices.  Comprehensive  strategies  are  needed  to  set  enabling  frameworks. 
This may involve adopting regulatory measures or implementing or adjusting policies 
and  initiatives  to  support  the  social  economy’s  contributions  to  social  and 
environmental goals and enhance their economic and industrial value. These strategies 
should  track  progress  and  measure  the  effectiveness  of  initiatives,  make  adjustments 
and  improvements  as  needed,  and  ultimately  result  in  more  efficient  and  impactful 
outcomes  from  the  sector.  Strategies  may  need  to  be  adopted  at  different  levels  of 
government  (national,  regional  and local) depending on the institutional  organisation 
and context in each Member State. Regions and other subnational levels could adopt 
social  economy  strategies  that  are  clearly  linked  to  regional  development  objectives 
and priorities, maximising the mutual benefits. 

(16) 

It is essential to involve social economy stakeholders for the successful development 
and implementation of social economy strategies. Several Member States have already 
set  up  high-level  groups  that  foster  dialogue  between  public  authorities  and  social 
economy entities66. Social economy representative networks can also be a platform for 
collective action, they can facilitate collaboration and information sharing, and create 
opportunities for capacity building and peer learning. 

(17)  Public  financial  support  plays  an  important  role  in  enabling  the  start-up  and 
development  of  social  economy  entities.  In  general,  social  economy  entities  have 
greater difficulties in accessing financial resources than other enterprises. For instance, 
despite  some  improvements,  an  analysis  of  social  enterprise  finance  markets  has 
revealed  a  persistent  mismatch  between  supply  and  demand  for  finance  for  social 
enterprises  in  Europe,  in  terms  of  access  to  debt  and  equity.  Since  social  economy 
entities  aim  to  generate  positive  social  and/or  environmental  impacts  and  can  only 
distribute  profits  to  their  funders  and  owners  to  a  limited  extent,  if  at  all,  they  are 
generally  not  well  suited  for  investors  that  seek  significant  financial  returns.  The 
support  measures  available  to  tackle  this  issue  tend  to  be  patchy  and  differ 
considerably  in  their  effectiveness.  Measures  vary  from  grants  and  subsidies  to 
consultancy  and  capacity-building  services  and  are  often  provided  by  incubators. 
There is therefore still ample room for improvement in providing tailored funding for 
different  stages  of  the  life  cycle  of  a  social  economy  entity,  and  further  support  to 
mobilise  private  funding  and  other  complementary  measures  to  improve  access  to 
funding  for  social  economy  entities  could  be  helpful.  One  such  approach  involves 
providing the choice for individual savers or employees who participate in employer-
funded retirement or savings plans with the option to select a savings plan that invests 
a portion of their savings into a social enterprise67.   

(18)  The  Union  provides  many  funding  opportunities  to  support  the  social  economy.  The 
European Social Fund Plus, the European Regional Development Fund established by 

66 

67 

For instance, the French High Council of Social and Solidarity Economy, the Spanish Council for the 
Development of the Social Economy, and the Portuguese National Council for Social Economy. 
For example « Les Fonds Communs de Placement d'Entreprise solidaires » in France. 

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Regulation  (EU)  2021/105868,  the  Just  Transition  Fund  established  by  Regulation 
(EU) 2021/105669, the European Agricultural Fund for Rural Development established 
by  Regulation  (EU)  No  1305/201370,  the  single  market  programme  established  by 
Regulation (EU) 2021/69071, the InvestEU programme established by Regulation (EU) 
2021/52372, and, where relevant, the Recovery and Resilience Facility  established by 
Regulation  (EU)  2021/24173,  all  provide  funding.  The  Union  also  provides  advisory 
support  through  the  fi-compass  platform  to  design  financial  instruments  under 
Cohesion Policy Funds. Member States, including regional and local authorities, could 
make  better  use  of  these  opportunities  by  adopting  specific  measures  for  the  social 
economy.  Technical  support74  is  another  Union  instrument  available  to  improve  the 
capacity of Member States to  design and implement  policies to  strengthen  the social 
economy.   

(19)  Providing  goods  and  services  and  working  with  both  public  authorities  and 
mainstream  businesses  is  critical  for  the  development  of  the  social  economy,  for 
generating  revenue  and  to  help  social  economy  entities  become  financially  self-
sufficient.  Thanks  to  the  scope  for  flexibility  under  the  Union  public  procurement 
rules, contracting authorities can use public procurement in a more strategic manner by 
setting  innovative,  green  and  social  criteria,  ultimately  contributing  to  a  more 
sustainable,  inclusive  and  competitive  economy.  However,  most  tenders  are  still 
awarded  solely  on  the  basis  of  price.  Since  social  economy  entities  aim  to  provide 
societal and collective benefits rather than to provide services at the lowest price, they 
struggle to compete in regular public procurement processes, despite the fact that they 
can  provide  broader  added  value  to  the  procurement  process.  There  is  also  room  to 
increase  the  capacity  of  social  economy  entities  to  do  business,  including  through  a 
more systematic integration into mainstream business value chains and partnering with 
them to bid jointly for public procurement and create new market opportunities. 

(20)  Public authorities often do not make the most of the current scope under State aid rules 
to  support  the  social  economy,  where  the  market  alone  is  unable  to  achieve 
satisfactory  access  to  the  labour  market  and  social  inclusion,  limiting  themselves  to 
measures under the general de minimis threshold and not using the option to establish 

68 

69 

70 

71 

72 

73 

74 

Regulation  (EU)  2021/1058  of  the  European  Parliament  and  of  the  Council  of  24  June  2021  on  the 
European Regional Development Fund and on the Cohesion Fund (OJ L 231, 30.6.2021, p. 60–93). 
Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing 
the Just Transition Fund (OJ L 231, 30.6.2021, p. 1–20). 
Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on 
support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and 
repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, p. 487–548). 
Regulation (EU) 2021/690 of the European Parliament and of the Council of 28 April 2021 establishing 
a programme for the internal market, competitiveness of enterprises, including small and medium-sized 
enterprises,  the  area  of  plants,  animals,  food  and  feed,  and  European  statistics  (Single  Market 
Programme) and repealing Regulations (EU) No 99/2013, (EU) No 1287/2013, (EU) No 254/2014 and 
(EU) No 652/2014 (OJ L 153, 3.5.2021, p. 1–47). 
Regulation  (EU)  2021/523  of  the  European  Parliament  and  of  the  Council  of  24  March  2021 
establishing the InvestEU Programme and amending Regulation (EU) 2015/1017 (OJ L 107, 26.3.2021, 
p. 30–89). 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17–75). 
Regulation  (EU)  2021/240  of  the  European  Parliament  and  of  the  Council  of  10  February  2021, 
establishing a Technical Support Instrument (OJ L 57, 18.2.2021, p. 1–16). 

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measures  under  Commission  Regulation  (EU)  No  651/201475  (the  General  Block 
Exemption  Regulation)  such  as  regional  aid,  risk-finance  aid,  and  aid  to  recruit 
disadvantaged workers. With regards to de minimis aid, it is currently limited to EUR 
200,000 over three years, but the current rules will expire on 31 December 2023 and 
are  in  the  process  of  being  revised.  Union  rules  governing  services  of  general 
economic interest  also  offer scope to  authorise State aid,  but  public authorities often 
do  not  make  full  use  of  these  options,  particularly  for  social  services  in  the  field  of 
work integration of vulnerable persons.  

(21)  Taxation  policy  can  also  have  a  significant  role  in  fostering  the  social  economy  and 
ensuring  that  social  economy  entities  can  afford  to  operate  alongside  mainstream 
businesses,  creating  a  more  equitable  business  environment  while  contributing  to 
social  inclusion  and  improved  access  to  employment.  Few  Member  States  have 
established  a  consistent  taxation  framework  that  encourages  the  development  of  the 
sector,  including  tax  incentives  tailored  to  the  needs  of  the  social  economy,  while 
recognising  its  diversity  and  preventing  fragmentation.  Setting  well-designed  tax 
incentives  for  donations  to  public-benefit  social  economy  entities  can  stimulate  their 
financing,  also  across  Union  borders  in  line  with  the  Treaty  principle  of  non-
discrimination.  Administrative  barriers  remain  in  several  Member  States  regarding 
public-benefit donations across Member States borders, and a lack of transparency on 
the documents needed to qualify for public-benefit status. Issuing standardised forms 
of  the  recipient  entity  established  in  another  Member  State  could  lessen  the 
administrative barriers. As a first step, Member States could provide translations of the 
national  forms  in  the  languages  used  by  other  Member  States.  As  a  second  step, 
Member States could explore developing standard forms on direct tax for cross-border 
donations. 

(22)  Social impact measurement and management processes are particularly important for 
social  economy  entities  as  they  enable  them  to  understand  and  communicate  their 
impact and access impact-driven funding. Social impact measurement  involves using 
metrics and tools  to gauge the social impact  of a particular intervention or initiative. 
Social  impact  management  involves  building  the  systems,  processes  and  capabilities 
that an organisation needs to proactively manage and increase its impact. But the wide 
range  of  frameworks  and  tools  available  can  be  a  challenge,  particularly  for  entities 
with  fewer  resources.  Monitoring  the  social  outcomes  of  public  investments  enables 
public scrutiny, can support the rationale for using  taxpayer money  to  support social 
economy entities or activities,  and can help to prevent  ‘impact washing’ (overstating 
or falsely claiming impact). Social impact measurement and management approaches 
that are well-considered, proportionate and adapted to the needs of individual entities 
could  be  helpful  in  this  regard.  They  should  be  based  on  standard  methods  and 
indicators,  as  well  as  on  factors  such  as  size,  stage  of  development,  and  diversity  of 
entities. 

(23)  The visibility and recognition of the social economy at national and regional levels in 
the Union has improved over the last decade.  However, the potential of the sector in 
many Union countries remains untapped. A lack of coordination and exchange across 
countries  perpetuates  the  differences  in  the  development  of  the  social  economy, 
therefore  there  is  a  clear  opportunity  for  Member  States  to  gain  by  learning  and 

75 

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  (OJ  L  187, 
26.6.2014, p. 1–78). 

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sharing best practices. There is also limited awareness among the general public about 
the  social  economy  and  the  positive  contributions  it  makes.  This  can  hinder  the 
development  of  support  policies  and  market  opportunities  for  the  social  economy. 
Regulating while ensuring new legislation meets the needs of social economy entities 
can raise awareness and give them greater legitimacy, facilitating access to finance and 
markets. National public authorities and stakeholders have launched several initiatives, 
such as specific  legal  forms, labels  and statuses76 for the social economy,  and  large-
scale communication campaigns, to increase understanding and visibility of the social 
economy.  Other  successful  reforms  include  the  creation  of  specific  ministerial  units 
for  the  social  economy  and  enhanced  dialogue  between  stakeholders  and  public 
authorities. Boosting the visibility of the social economy is crucial to fully recognise 
its positive impact  on society, as  emphasised in  the social economy  action  plan with 
the launch of a social economy gateway. 

(24)  Having  accurate  data  and  statistics  is  key  to  improving  understanding  of  social 
economy  business  models  and  making  evidence-based  policy  decisions.  However, 
there  is  a  shortage  of  reliable  data  on  the  social  economy,  including  data  on  its 
economic added value and performance. Existing data is often incomplete and difficult 
to  compare.  For  instance,  only  a  few  Member  States  have  expanded  their  national 
accounting systems to collect supplementary data (such as in satellite accounts) on the 
social economy, despite financial support available under the Union budget. The social 
economy is usually not included in structural business statistics, for instance when the 
statistics are built on economic data generated by for-profit businesses and traditional 
social economy entities are only included in residual categories. By making available 
essential  statistics  on  the  size,  workforce,  development  and  challenges  of  the  social 
economy,  the  strategies  and  measures  put  in  place  would  be  more  efficient  and 
adjusted to the different situations in the sector. 

HAS ADOPTED THIS RECOMMENDATION: 

OBJECTIVE 

1. 

2. 

3. 

76 

In  line  with  the  principles  of  the  European  Pillar  of  Social  Rights,  the  aim  of  this 
Recommendation  is  to  foster  access  to  the  labour  market  and  social  inclusion  by 
guiding Member States on promoting enabling policy and regulatory frameworks for 
the social economy and/or measures that facilitate its development.  

To achieve these objectives, Member States are recommended to work together with 
stakeholders  to  acknowledge,  support  and  build  on  the  contributions  made  by  the 
social economy. 

This Recommendation seeks to support the implementation of the European Pillar of 
Social  Rights  action  plan  and  to  help  achieve  the  three  Union  headline  targets  for 
employment, skills, and poverty reduction by 2030. 

By promoting the social economy, this Recommendation also seeks to stimulate fair 
and sustainable economic and industrial development and to contribute to territorial 
cohesion across the Member States. 

Legal statuses/qualifications, sometimes also referred to as labels, are distinct from legal forms as they 
can be adopted by a variety of legal forms, including profit and non-profit organisations. 

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DEFINITION 

4. 

For the purpose of this Recommendation, the following definitions apply: 

(a) 

‘social  economy’  means  private  entities,  independent  of  public  authorities, 
providing  goods  and  services  to  their  members  or  to  society,  encompassing 
cooperatives,  mutual  benefit  societies,  associations  (including  charities), 
foundations  and  social  enterprises  that  operate  in  accordance  with  the 
following key 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  further  pursue 
their social and/or environmental purposes and carry out activities in the 
interest  of  members/users  (‘collective  interest’)  and/or  society  at  large 
(‘general interest’); and 

 

democratic and/or participatory governance. 

(b) 

‘social  enterprise’  means  an  entity  that  provides  goods  and  services  for  the 
market  in  an  entrepreneurial  way  and  in  accordance  with  the  principles  and 
features of the social economy, having social and/or environmental objectives 
as the reason for its commercial activity. 

FOSTERING  ACCESS  TO  THE  LABOUR  MARKET AND  SOCIAL  INCLUSION 

THROUGH THE SOCIAL ECONOMY 

Access to the labour market 

5. 

Member  States  are  recommended  to  acknowledge  and  support  the  specific  added 
value  of  the  social  economy  by  easing  access  to  the  labour  market  and  promoting 
quality  jobs  for  all,  while  also  enhancing  fair  working  conditions.  This  should  be 
done within the framework of inclusive growth, as highlighted in the Guidelines for 
the employment policies of the Member States, in particular by: 

(a) 

(b) 

establishing or encouraging partnership initiatives that involve social economy 
entities in the design and implementation of active labour market policies; 

ensuring  public  authorities  provide  sufficient  support  to  social  economy 
entities  with  a  view  to  better  integrating  into  the  labour  market  women, 
disadvantaged  and  underrepresented  groups 
long-term 
unemployed,  people  suffering  from  mental  ill-health,  the  inactive,  the  low-
skilled, people with disabilities, people with a migrant, minority racial or ethnic 
background (including Roma), young and older people) through: 

(such  as 

the 

i. 

ii. 

work integration social enterprises that provide employment and tailored 
support to such groups; 

action  to  help  these  groups  of  people  prepare  for  employment  through 
working experience in social entreprises for their integration in the open 
labour market. 

(c) 

supporting  collaborative  projects  between  public  employment  services,  local 
authorities, social economy entities and mainstream businesses to offer tailored 
career guidance and learning and training opportunities to young people not in 
education, employment,  or training (NEETs). These opportunities can include 

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23 

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apprenticeships,  professional  immersion  programmes,  personal  coaching  and 
meetings  with  role  models,  and  aim  to  facilitate  integration  in  the  labour 
market, in line with the Reinforced Youth Guarantee; 

(d)  promoting  social  entrepreneurship  as  a  means  to  foster  self-employment  and 
other  forms  of  employment,  develop  economic  activity  locally  and  tackle 
social and environmental challenges through innovative and inclusive business 
models; whereas to achieve this, Member States can, for instance: 

i. 

ii. 

iii. 

ensure that social entrepreneurs have access to social protection; 

consider reducing social security contributions to hire new employees;  

identify,  assess  and  address  potential  administrative  disadvantages  or 
barriers to starting a social business. 

(e) 

designing policies and adopting measures that promote and maintream gender 
equality in the social economy, for example by: 

i. 

ii. 

iii. 

challenging discriminatory social norms and stereotypes about women’s 
and men’s skills, and the undervaluation of women’s work; 

providing tailored support to empower women by reducing gender gaps 
in employment and pay and ensuring equal leadership;  

providing  access  to  coaching  and  mentoring  programmes  for  women 
aspiring to be social entrepreneurs and leaders. 

ensuring  an  enabling  framework  for  business  transfers  to  employees  to  form 
worker cooperatives to avoid job losses and safeguard economic activity; 

collaborating  with  social  economy  entities  to  enable  more  people  with 
disabilities  to  join  the  labour  market,  for  example  by  developing  assistive 
technologies; 

(f) 

(g) 

(h)  promoting  social  dialogue  and  collective  bargaining  in  the  social  economy  to 
ensure  that  workers  have  fair  working  conditions,  including  fair  wages, 
respecting the autonomy of social partners. 

Social inclusion 

6. 

Member States are recommended to acknowledge and support the role of the social 
economy  in  providing  accessible  and  high-quality  social  and  care  services  and 
housing,  particularly  for  disadvantaged  groups,  alongside  publicly  available  social 
services. For example, this could include: 

(a) 

(b) 

collaborating  with  social  economy  entities  within  their  respective  areas  of 
action when establishing and providing services of general interest; 

involving social economy entities in the design and delivery of people-centred 
social and care services, as emphasised by the European care strategy; 

(c)  working  together  with  social  economy  entities  to  design  and  deliver  care  and 
support for children and young people, including children from disadvantaged 
groups,  in  line  with  the  European  Child  Guarantee  established  by  Council 

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Skills 

7. 

Recommendation (EU) 2021/100477 and the Union strategy on the rights of the 
child78. 

Member States are recommended to support training and skills development for the 
social economy, in particular by: 

(a) 

drawing on existing skills intelligence tracking the needs of the economy and 
the  mainstream  labour  market  to  understand  how  the  social  economy  can 
contribute to the supply of a skilled labour force and mitigate labour shortages; 

(b) 

facilitating training and skills in the social economy by: 

i. 

ii. 

running  learning  exchanges  between  social  economy  entities,  training 
organisations  and  mainstream  companies,  with  the  aim  of  improving 
management, entrepreneurial, and job-related skills needed for the digital 
and green transitions (including circular, repair, and digital skills); 

reskilling  and  upskilling  lifelong  learners,  including  disadvantaged 
groups of people, and helping them transition to the open labour market, 
in  line  with  the  European  approach  to  micro-credentials  for  lifelong 
learning and employability; 

iii. 

including  training  on  or  provided  by  the  social  economy  in  the  list  of 
training eligible to be covered by the individual learning accounts79. 

creating specific apprenticeship schemes in social economy that support young 
people, particularly people not in employment, education or training, to upskill 
and  prepare  them  for  the  labour  market  and  enable  the  social  economy  to 
develop talent in the sector, in line with the European Framework for Quality 
and Effective Apprenticeships; 

fostering the inclusion of social economy and social entrepreneurship skills in 
education and training at all levels of education, especially in entrepreneurship 
and  business  courses,  and  providing  access  to  coaching  and  mentoring 
programmes for social economy entities and social entrepreneurs; 

creating  national  competence  centres  for  training  on  the  social  economy  and 
taking  part  in  transnational  initiatives  that  facilitate  access  to  specialist 
education  and  training  programmes  for  the  social  economy,  for  example 
through cooperation with vocational education and training providers working 
within the framework of established bodies, such as the Centres of Vocational 
Excellence referred to  in Council Recommendation of 24 November 2020 on 

(c) 

(d) 

(e) 

77 

78 

79 

Council  Recommendation (EU) 2021/1004 of 14 June  2021 establishing a European  Child Guarantee 
(OJ L 223/14 22.6.2021). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions  ‘EU Strategy on the rights of the 
child', COM(2021) 142 final. 
Council Recommendation of 16 June 2022 on individual learning accounts 2022/C 243/03 (OJ C 243, 
27.6.2022, p. 26–34). 

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25 

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vocational  education  and  training  for  sustainable  competitiveness,  social 
fairness and resilience80. 

Social innovation, sustainable economic development and territorial cohesion 

8. 

Member  States  are  recommended  to  strengthen  the  support  role  played  by  social 
economy  entities  in  promoting  social  innovation  and  key  sectors  of  local 
development and employment. This can be achieved by: 

(a) 

promoting  a  favourable  ecosystem  for  social  and  place-based  innovation  by 
facilitating  cooperation and partnership initiatives between social and circular 
economy entities, mainstream businesses, finance providers, local governments 
and other stakeholders. For instance, this can be done by: 

i. 

ii. 

iii. 

creating  or  fostering  social  innovation  hubs  or  clusters  of  social  and 
ecological  innovation  designed  to  meet  local  needs  and  test  joint 
solutions; 

involving  social  economy  entities  in  community-led  local  development, 
including by making use of the Union funding instruments available;  

engaging  with  national  and  regional  competence  centres  for  social 
innovation  to  build  networks,  boost  capacities  and  synergies,  highlight 
efficiencies  and  develop  essential  tools  and  methods  to  stimulate  social 
innovation. 

ensuring that policy on the social economy is linked to industrial policy and the 
transition to a digital and circular economy; 

adapting  regulatory  frameworks  to  support  social  economy  entities  in  the 
circular economy, for instance ensuring that the right incentives are in place for 
businesses to donate unsold and returned goods to social economy entities for 
repair and reuse instead of destroying the goods and for individuals to donate 
second-hand goods, ensuring social economy entities have access to the waste 
stream,  involving  them  in  waste  prevention  strategies,  and  authorising  food 
banks to collect food surpluses; 

fostering the development of social economy community-based initiatives and 
ecosystems,  for  example,  energy  communities,  shared  mobility  solutions, 
digital platform cooperatives, care provision, agriculture cooperatives and local 
short food chains and markets, for citizens to access local-based products and 
services; 

(b) 

(c) 

(d) 

(e) 

boosting  the  access  of  social  economy  entities  to  digital  tools  and  new 
technologies such as open source, big data or artificial intelligence. 

DEVELOPING ENABLING FRAMEWORKS FOR THE SOCIAL ECONOMY 

9. 

80 

Member States are recommended to develop policy and regulatory frameworks that 
enable and support the social economy. To this  end, they are encouraged to  design 
and  roll  out  comprehensive  strategies  that  recognise  and  stimulate  the  social 
economy, in line with the Union action plan for the social economy and other Union 

Council  Recommendation  of  24  November  2020  on  vocational  education  and  training  (VET)  for 
sustainable competitiveness, social fairness and resilience 2020/C 417/01 (OJ C 417, 2.12.2020, p. 1-
16). 

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10. 

11. 

12. 

policy  guidance.  Member  States  should  follow  the  recommendations  outlined  in 
points 13 to 21 while formulating these strategies. 

Member  States  are  recommended  to  put  in  place  mechanisms  for  consultation  and 
dialogue  between  the  public  authorities  and  organisations  representing  the  social 
economy.  This  can  involve  setting  up  high-level  groups  and  supporting  the 
emergence and development of social economy representative networks. 

In the strategies referred to in point 9, Member States should acknowledge the core 
principles,  features,  and  scope  of  the  social  economy,  and  recognise  that  they  can 
take  a  range  of  different  legal  forms  and  statuses  and  are  specific  to  different 
national, regional and local laws and practices. 

Member  States  are  recommended  to  invest  in  the  development  of  their  public 
officials’  and  authorities’  understanding  of  the  social  economy  through  training 
programmes  and  transnational  and/or  interregional  capacity-building  initiatives, 
including  initiatives  under  the  Interreg  Europe  programme  set  out  by  Regulation 
(EU)  2021/1059  of  the  European  Parliament  and  of  the  Council81.  The  initiatives 
should  focus  on  peer  learning  and  on  sharing  best  practices,  with  a  particular 
emphasis on fostering collaboration between regional and local authorities, as well as 
social  economy  stakeholders.  The  Commission  will  support  this  work  as  described 
under point 22(a)iii. 

Access to public and private funding 

13. 

Member  States  are  recommended  to  create  an  enabling  environment  for  social 
finance at national, regional and local levels, in particular by: 

(a)  mapping  the  financing  structures  for  social  economy  entities,  financial 
intermediaries  and  support  organisations,  and  assessing  their  needs  and  the 
effectiveness of existing support schemes; 

(b) 

(c) 

(d) 

ensuring that social economy entities have access to financing at the right stage 
of  their  development  and  tailored  to  their  needs,  including  grants  and  other 
subsidies, equity or quasi-equity financing for the seed and start-up phases, or 
debt, equity financing, quasi-equity, or mezzanine finance during the scale-up 
phase,  and  innovative  financing  schemes,  such  as  public-private  partnerships, 
crowdfunding  platforms,  and  combinations  of  different  types  of  financial 
instruments or grants and financial instruments; 

promoting  retail  investors’  access  to  sustainable  business  models,  sectors, 
products and services driven or supported by the social economy; 

evaluating  the  criteria  to  access  public  funding  programmes,  including  those 
aimed at mainstream businesses, to ensure they do not create undue barriers for 
social economy entities; 

(e)  mobilising  private  financing  by  making  available  public  guarantee  schemes, 
where  necessary,  to  encourage  specialised  and  mainstream  funders  to  finance 
social economy entities; 

81 

Regulation (EU) 2021/1059 of the European Parliament and of the Council of 24 June 2021 on specific 
provisions for the European territorial cooperation goal (Interreg) supported by the  European Regional 
Development Fund and external financing instruments (OJ L 231, 30.6.2021, p. 94–158). 

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27 

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(f) 

(g) 

raising  awareness  about  the  specific  characteristics  and  needs  of  social 
economy  entities  to  improve  the  capacity  of  mainstream  private  funders  to 
offer tailored financial support; 

facilitating  access  to  business  development  and  investment  readiness  support 
for  social  economy  entities  throughout  their  lifecycle,  for  example  through 
awareness  raising  support  schemes  for  mainstream  business  incubators, 
accelerators,  and  other  support  organisations  to  extend  their  support  to  social 
economy  entities,  including  capacity  building  opportunities  for  managers  of 
social economy entities; 

(h)  offering dedicated financial support and capacity building to facilitate business 

transfers to worker cooperatives; 

(i) 

offering  schemes  that  increase  the  availability  of  finance  for  social  economy 
entities,  for  instance  providing  the  choice  to  individual  savers,  or  employees 
who  participate  in  employer-funded  retirement  or  savings  plans,  with  the 
option to select a plan that invests a portion into a social enterprise;  

(j)  making the best use of the funding available under the Cohesion Policy Funds, 
the  InvestEU  programme  Member  State  compartment,  the  Recovery  and 
Resilience  Facility,  similar  programmes  and  other  national  and  regional 
resources, by running measures and initiatives designed specifically for social 
economy entities; 

(k)  using  the  fi-compass  advisory  services  on  financial  instruments  under  Union 
shared  management  to  develop  repayable  finance  instruments  under  the 
Cohesion Policy Funds. 

Access to markets and public procurement 

14. 

Member  States  are  recommended  to  encourage  their  contracting  authorities  to 
purchase  goods  and  services  strategically  and  to  pursue  social  impact  and  support 
social innovation. To that end, they should make full use of the tools available under 
Union  public  procurement  rules.  Fostering  the  uptake  of  socially  responsible  and 
innovative  solutions  in  public  procurement  may  involve  different  types  of  policy 
tools, including: 

(a) 

adopting  policy  guidance  and  procurement  strategies,  including  possible 
official  targets,  backed  by  the  leadership  and  with  a  commitment  from  the 
political level through to key decision-makers and budget managers; 

(b)  providing guidance at the appropriate administrative level(s); 

(c) 

(d) 

raising  awareness  of 
the  added  value  of  socially  responsible  public 
procurement  among  contracting  authorities  and  enterprises  and  making 
expertise available to contracting authorities and social economy entities; 

encouraging  contracting  authorities  to  refer  in  tender  documents  to  specific 
obligations under social and labour law and collective agreements that apply to 
the  procurement82,  ask  bidders  to  confirm  compliance,  and  set  up  monitoring 
measures; 

82 

Article 30(3) of Directive 2014/23/EU of the European Parliament and of the Council of 26 February 
2014  on  the  award  of  concession  contracts  (OJ  L  094  28.3.2014,  p.  1),  Article  18(2)  of  Directive 
2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement 

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(e) 

encouraging a structured, transparent and non-discriminatory dialogue with the 
social economy and other stakeholders to design a socially responsible public 
procurement strategy. 

15. 

On  substance,  contracting  authorities  should  make  better  use  of  the  flexible 
provisions under the existing legal framework of the Union to help social economy 
entities access the market by, for example: 

(a) 

(b) 

fostering market dialogue, in particular by conducting transparent and inclusive 
preliminary market consultations with a targeted range of potential suppliers; 

reserving contracts for work integration social enterprises or for operators that 
employ  at  least  30%  of  people  with  disabilities  or  disadvantaged  workers  in 
compliance  with  Article  24  of  Directive  2014/23/EU,  Articles  20  and  77  of 
Directive 2014/24/EU and Articles 38 and 94 of Directive 2014/25/EU; 

(c) 

setting  proportionate  and  inclusive  selection  criteria  to  enable  small  and 
innovative social businesses to bid for contracts; 

(d)  moving away from the logic of the lowest price by using social award criteria 
in  line  with  the  ‘most  economically  advantageous  tender’  rule  and  social 
contract  clauses,  and  setting  performance  or  functional  requirements  at 
technical 
different 
specifications; 

stages  of  procurement  procedures, 

including 

in 

(e) 

(f) 

dividing  contracts  into  lots,  in  compliance  with  Article  46  of  Directive 
2014/24/EU  and  Article  65  of  Directive  2014/25/EU,  also  in  view  of 
facilitating  cooperation  between  mainstream  business  and  social  economy 
entities, and using simplified regimes, in particular for social and other specific 
services to make the process more accessible to social economy entities; 

requiring specific labels in the technical specifications, the award criteria or the 
contract performance conditions, when they intend to purchase works, supplies 
or services with specific social or environmental characteristics, in compliance 
with  Article  43  of  Directive  2014/24/EU  and  Article  61  of  Directive 
2014/25/EU. 

16. 

To  help  social  economy  entities  expand 
their  reach,  Member  States  are 
recommended to foster cooperation between social economy entities and mainstream 
businesses, in particular by: 

(a) 

raising  awareness  about  social  added  value  by  promoting  best  practices  that 
encourage  mainstream  businesses  to  involve  social  enterprises  in  their  long-
term  supply  and  value  chains  and  consumers  to  buy  goods  and/or  services 
produced  by  social  economy  entities,  also  known  as  the  ‘buy  social’ 
movement; 

(b) 

stepping up the provision of mentoring, matchmaking, and facilitation services 
to help social economy entities develop long-term partnerships with the wider 
business community; 

and  repealing  Directive  2004/18/EC  (OJ  L  094  28.3.2014,  p.  65)  and  Article  36(2)  of  Directive 
2014/25/EU  of  the  European  Parliament  and  of  the  Council  of  26  February  2014  on  procurement  by 
entities  operating  in  the  water,  energy,  transport  and  postal  services  sectors  and  repealing  Directive 
2004/17/EC (OJ L 094 28.3.2014, p. 243). 

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(c) 

promote and support work integration social enterprise employees in  working 
with mainstream businesses to gain experience on the open labour market; 

(d)  helping social economy entities and entrepreneurs to make the best use of new 
technologies  to  access  private  markets  through  social  economy-driven  online 
platforms, collaborative spaces and the digital commons. 

State aid 

17. 

Whenever an intended support measure for the social economy constitutes State aid 
and  without  prejudice  to  the  applicable  rules,  Member  States  are  recommended  to 
make  full  use  of  the  scope  under  State  aid  rules  to  support  the  social  economy,  as 
provided  for  by  Regulation  (EU)  No  651/2014,  the  rules  on  services  of  general 
economic interest, and the de minimis rule by: 

(a) 

using the Regulation (EU) No 651/2014 provisions, in particular: 

i. 

considering  investment  aid  to  small  and  medium-sized  enterprises 
(SMEs), for example for the purchase of assets in social infrastructure in 
compliance with Article 17 of Regulation (EU) No 651/2014; 

ii.  making  best  use  of  the  provisions  allowing  risk-finance  aid  to  SMEs 
SMEs  in  compliance  with  Articles  21  and  21a  of  Regulation  (EU)  No 
651/2014  for  example  by  setting  up  investment  funds  with  the 
participation of private investors to specifically support social enterprises 
and  providing  tax  incentives  to  independent  private  investors  who  are 
natural persons providing risk finance directly or indirectly to the eligible 
enterprises; 

iii. 

iv. 

v. 

vi. 

considering  start-up  aid  enabling  small,  unlisted,  young  enterprises  to 
receive  a  variety  of  aid  instruments  such  as  soft  loans,  guarantees  with 
soft  premiums,  or  grants  in  compliance  with  Article  22  of  Regulation 
(EU) No 651/2014; 

investing in people by adopting aid schemes for the reintegration on the 
labour  market  of  disadvantaged  or  severely  disadvantaged  workers  in 
compliance with Articles 32 and 35 of Regulation (EU) No 651/2014; 

facilitating  the  full  inclusion  of  workers  with  disabilities  in  all  types  of 
businesses  with  the  support  of  specific  subsidies,  including  wage 
subsidies,  to  enterprises  in  compliance  with  Articles  33  and  34  of 
Regulation (EU) No 651/2014; 

supporting the construction or upgrade of local infrastructure, which may 
include local social infrastructure, by granting aid to cover the difference 
between the investment  costs and the operating  profit of the investment 
in compliance with Article 56 of Regulation (EU) No 651/2014.  

(b) 

In line with the applicable State aid rules, Member States are recommended to 
explore  which  services  provided  by  social  economy  entities  could  be  defined 
and financed as services of general economic interest, for instance  in the field 
of  work  integration  of  vulnerable  persons,  in  social  housing  or  in  health  and 
social services such as childcare, care for the elderly or people with disabilities; 
compensation  for  services  that  meet  social  needs  can  even  be,  under  certain 
conditions, exempt from the notification obligation, regardless of the amount of 

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the  compensation  received,  under  Commission  Decision  of  20.12.2011 
(2012/21/EU)83; 

(c) 

using the scope available to grant transparent amounts of de minimis aid.  

Taxation 

18. 

Without prejudice to State aid rules, Member States are recommended to: 

(a) 

(b) 

(c) 

(d) 

ensure  that  taxation  systems  do  not  hinder  the  development  of  the  social 
economy  and  assess  whether 
its 
development; 

tax  systems  sufficiently  encourage 

consider tax incentives for the sector, if not already granted, in line with their 
social policy objectives and the current practices across Member States and in 
accordance with Union law, which may include: 

i. 

ii. 

corporate tax exemptions on profits retained by social economy entities; 

income tax incentives in the form of deductions or tax credits granted to 
private and/or institutional donors or a designation scheme according to 
which taxpayers can indicate to their tax authority the set percentage of 
their income tax liability to be allocated to public-benefit entities; 

iii. 

tax  exemptions  on  unemployment  benefits  received  as  a  lump  sum 
payment to facilitate business transfers to worker cooperatives. 

review  the  tax  compliance  burden  for  social  economy  entities  and  where 
possible reduce it; 

facilitate  compliance  on  a  practical  level  for  public-benefit  cross-border 
donations for taxation purposes, for instance by issuing a standardised form of 
the recipient entity established in another Member State on the amount of the 
donation, identifying both the recipient and the donor;  

(e)  make  sure  that  social  economy  entities  are  not  used  for  tax  evasion,  tax 
avoidance,  aggressive  tax  planning  or  money  laundering  purposes,  while 
ensuring the related administrative procedures are effective and proportionate. 

Social impact measurement and management 

19. 

In line with the Commission’s actions referred to in point 22(a)v, Member States are 
recommended to support the uptake of impact measurement and impact management 
practices, in particular by: 

(a) 

incorporating  social  impact  measurement  and  management  practices  and 
methodologies  in  national  policy  frameworks  and  programmes  linked  to  the 
social economy; 

(b)  providing  tailored  support  based  on  good  practices  to  help  social  economy 
entities  adopt  simple  and  practical  impact  measurement  and  management 
methodologies  that  improve  their  outcomes,  demonstrate  their  social  impact, 
and facilitate access to impact-driven finance; 

83 

Commission Decision 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  (OJ  L  7, 
11.1.2012, p. 3–10). 

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(c) 

encouraging  social  economy  entities  to  measure  their  impact  by  building 
capacity through dedicated funding, and to  use part of the public money  they 
receive (grants or contracts) to measure their social impact. 

Visibility and recognition 

20. 

Member  States  are  recommended  to  raise  awareness  about  the  social  economy  and 
how it contributes to achieving social and environmental goals, in particular by: 

(a) 

setting  up  or  adapting  specific  legal  forms,  legal  statuses,  labels  and/or 
certification  schemes  for  the  social  economy,  based  on  assessments  of  their 
potential added value, and considering a potential voluntary mutual recognition 
of  labels  and  certifications  used  in  other  Member  States.  Such  assessments 
should look at the extent to which they can improve understanding of the sector 
and support its development by providing access to specific advantages (such 
as  tax  incentives  or  flexibility  in  specific  tendering/procurement  procedures). 
The Commission will support this work as described under point 22(a)vi; 

(b)  organising  and  financing  communication  campaigns  and  awareness  raising 
events  on  the  social  economy,  including  for  younger  generations,  in 
cooperation with the relevant levels of government and other institutions (e.g. 
universities); 

(c) 

disseminating  successful  pilot  initiatives  and  good  practices  led  by  social 
economy entities, promoting action to replicate and scale up this good practice 
through social economy networks and through public communication. 

21. 

Member  States  are  recommended  to  monitor  the  development  and  performance  of 
the social economy by stimulating research and collecting statistics and quantitative 
and qualitative data, in particular by: 

(a)  making  the  most  of  the  available  support  from  the  European  Commission  to 
expand  their  national  accounting  systems  to  collect  supplementary  and 
comparable  data  (satellite  accounts)  and  key  household  surveys  (such  as  the 
Labour  Force  Survey  and  the  surveys  that  feed  into  the  EU-SILC)  to  collect 
information  on  participation  in  the  social  economy,  including  disaggregated 
data on sex and age (and where feasible other breakdowns) to understand the 
impact on employment creation; 

(b) 

encouraging  cooperation  on  developing  statistics  among  public  authorities, 
research  organisations  and  the  social  economy,  while  extending  the  range  of 
sources  of  information  such  as  registers,  administrative  data,  surveys  and 
census to collect accurate data; 

(c) 

supporting academic and independent research on social economy topics. 

UNION SUPPORT 

22. 

The Council welcomes the Commission’s intention to support implementation of this 
Recommendation  by  working  together  with  Member  States  to  develop  enabling 
policy and regulatory frameworks for the social economy. In particular this includes: 

(a) 

carrying  out  the  initiatives  announced  in  the  action  plan  for  the  social 
economy, which include: 

i. 

launching  and  maintaining  the  EU  Social  Economy  Gateway,  a  clear 
entry point for social economy stakeholders to find information on Union 

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ii. 

iii. 

iv. 

v. 

funding,  policies,  networks/platforms  and  initiatives,  including  capacity 
building; 

publishing  analysis  on  the  existing  taxation  frameworks  for  the  social 
economy  and  on  the  tax  treatment  of  cross-border  public-benefit 
donations and on the principle of non-discrimination; 

facilitating  peer  learning  opportunities  for  public  officials  on  topics 
related  to  the  social  economy by  organising  webinars  and  workshops. 
Those events could be based on mapping exercises and the collection and 
exchange  of  good  practice  in  a  range  of  policy  fields  relevant  to  the 
sector,  enabling  participants  to  share  knowledge  and  identify  successful 
strategies.  Those  events  could  also  serve  as  an  opportunity  for  regular 
exchanges  of  best  practices  and  peer  learning  between  social  economy 
coordinators from Member States; 

collecting  qualitative  and  quantitative  evidence  on  the  operation  of  the 
social economy in  the  Member States, including by supporting research 
under the Horizon Europe work programme for 2023-202484; 

the  development  of  social 

supporting 
impact  measurement  and 
management by mapping and reviewing existing practices, including how 
they meet the needs and capacities of social economy entities, to improve 
understanding and facilitate their uptake85. This work will be conducted 
in  close  consultation  with  stakeholders  and  will  aim  to  develop  simple 
standard  methodologies  for  social  economy  entities  to  assess  and 
demonstrate their social impact; 

vi. 

launching  a  study  on  national  social  economy  labels  and  certification 
schemes mapping current initiatives, identifying good practices, common 
features  and  criteria,  and  providing  Member  States  with  a  common 
approach and guidance, with a view to voluntary mutual recognition; 

vii.  offering Member States technical support for reforms aiming at boosting 

the social economy both on a bilateral and multi-country basis; 

viii.  boosting  transnational  cooperation  in  social  innovation  through  the 
European Competence Centre for Social Innovation, the European Social 
Innovation  Competition  and  the  future  network  of  social  entrepreneurs 
and innovators supported under the single market programme; 

ix. 

supporting  co-implementation  of 
the 
‘Proximity  and  Social  Economy’  industrial  ecosystem86  by  collecting 
stakeholder  pledges  and  facilitating  cooperation  among  ecosystem 
stakeholders on the green and digital transition; 

the  Transition  Pathway  of 

84 

85 

86 

Commission Implementing Decision on the adoption of the work programme for 2023-2024 within the 
framework of the specific programme implementing Horizon Europe – the Framework Programme for 
Research and Innovation and on its financing, COM/2022) 7550. 
The Commission, together with the OECD, shall publish a report that will identify and unpack tailored 
approaches that are already vetted by social economy entities in Europe, looking at their purpose, scope 
and main features, illustrating good practices.  
Report ‘Transition pathway for Proximity and Social Economy’. 

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x. 

xi.  

continuing to improve access to funding for social enterprises and other 
social economy entities, for example through the financial products under 
the InvestEU programme; 

the  use  of  socially 
Commission’s  tendering procedures; 

responsible  procurement  practices 

in 

the 

xii. 

taking stock of the implementation of the plan. 

(b)  monitoring and assessing the implementation of this Recommendation; 

(c) 

based on Member States’ reports referred to in point 26, preparing a report on 
the evaluation of the actions taken in response to this Recommendation, to be 
submitted to the Employment Committee and the Social Protection Committee 
for discussion.  

IMPLEMENTATION, MONITORING AND EVALUATION 

23. 

24. 

Member States are recommended to adopt or update their social economy strategies 
within 18 months of the adoption of this Recommendation. 

To ensure a successful implementation of this Recommendation, Member States are 
recommended to review and improve their administrative and institutional set-ups at 
all levels of governance, for example by: 

(a) 

(b) 

(c) 

creating  a  ‘one-stop  shop’  to  provide  streamlined  and  convenient  support  to 
social economy entities in areas such as access to finance and other support; 

setting up local and/or regional social economy contact points that play the role 
of  social  economy  ambassadors  and  promote  the  sector,  provide  peer-to-peer 
support,  facilitate  access  to  Union  and  national  funding,  and  liaise  with 
national and regional authorities managing Union funds; 

designating social economy coordinators in national public institutions. These 
coordinators  should  have  a  clear  mandate  and  responsibilities  and  sufficient 
the 
resources 
Recommendation  and 
in  policymaking  across 
government departments and with Union institutions. 

to  enable  effective  coordination  and  monitoring  of 

to  ensure  consistency 

25. 

26. 

Member  States  are  recommended  to  monitor  and  evaluate  at  national  level  their 
implementation  of  this  Recommendation,  including  through  regular  dialogue  with 
regional  and  local  authorities  and  social  economy  entities  to  inform,  advise  and 
accompany  the  evaluation,  monitoring  and  implementation  of  their  social  economy 
strategies. 

Member  States  are  recommended  to  report  to  the  Commission  on  their  progress  in 
implementing  the  Recommendation  no  later  than  four  years  following  its  adoption 
and again five years after that.  

Done at Strasbourg, 

For the Council 
The President 

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