European Parliament to vote on creating social enterprises label

Plan to create the ‘European Social Economy Label’

The European Parliament is set this Thursday to vote on the European Commission creating a label for social enterprises.

Last week, the European Parliament Committee on Legal Affairs and the Committee on Employment and Social Affairs adopted a motion recommending the creation of a ‘European Social Economy Label’ for social enterprises in Europe and guidelines of good practices for social enterprises.

The motion was adopted with 19 votes, two against and two abstentions. The whole European Parliament is set to vote at its plenary session on Thursday. Jiří Maštálka, an MEP from the Czech Republic, is leading the process to help social enterprises with finance. He is part of the far-left Confederal Group of the European United Left-Nordic Green grouping in the European Parliament.

The motion’s text says that the ‘European Social Economy Label’ should only be awarded to enterprises that conduct a socially-useful activity including support for vulnerable groups to combat social exclusion, inequality and violation of fundamental rights, or help to protect the environment, biodiversity, the climate and natural resources.

Organisations awarded the Label should also be subject to a partial constraint on profit distribution, says the text, and subject to rules on allocation of profits and assets during its entire life, including at dissolution. Also, ‘the majority of profits made by the undertaking should be reinvested or otherwise used to achieve its social purpose’.Also, democratic governance models involving its employees, customers and stakeholders, should be used under the label.

The text also says a legislative act should establish a mechanism of certification and of supervision and monitoring of the legal label with member states.

And, any legislative act on the label should establish guidelines regarding good practices for social enterprises in Europe, says the text, including models of effective democratic governance, diversity and adaptation to social needs and to the employment market, particularly at a local level.

A list of legal forms of social enterprises in member states should also be included in any legislation, with provisions for regular reviews.

The motion to be voted on also calls for the European Commission to examine establishing financing for social enterprises, an online multilingual sharing-knowledge platform for European social enterprises and data analysis on social enterprises across Europe.

Meanwhile, today also sees a vote in the Parliament’s plenary session on a report calling for the EU to up its game on climate diplomacy. MEPs are calling for a comprehensive strategy for climate diplomacy and for the integration of climate into all fields of the EU external action, including trade, development, cooperation, humanitarian aid, security and defence.