What Europe can do for Social Enterprise (and vica versa)

Paul Monaghan,

Director, Up the Ethics

March 2016

twitter @PaulJMonaghan

Scale of Social Enterprise, UK Numbers range from 70,000 through to 690,000

24% of SMEs self-define Cabinet Office say 6% have “very good” fit, and

15% (180,000) “good fit” If include sole traders, 283,000 “very good” and

690,000 “good”

Contribution ranges from £24bn through to £55 bn, and annual income of £163 bn

Said to employ between 1 mn and 2 mn

Operate almost every sector: health & social care, renewable energy, transport, retail, housing, food

Start-ups significant, but metamorphosis import too spinning out of parts of the public sector entrepreneur-led organisations charities becoming more business-orientated

State of Social Enterprise, UK

State of Social Enterprise 2015:

• Dynamic movement: Half (49%) are 5 years old or less.

• Forefront of economic recovery: 52% grew turnover in past 12 months (cf 40% of mainstream SMEs).

• Job creators: 41% created jobs in past 12 months (cf 22% of SMEs).

• Focused where most needed: 31% working in top 20% most deprived communities in UK.

• Inclusive and diverse leadership: 40% are led by women; 31% have Black Asian Minority Ethnic directors; 40% have a director with a disability.

Survey found that 3/4 social enterprises pay the Living Wage

Europe

Social economy in EU: 10% of GDP

1 out of 4 new enterprise set-up every year in the European Union

In 2011, European Commission launched Social Business Initiative “Europe should be in the lead.”

Access to Finance. Employment and Social Innovation

programme Reform of Structural Funds European Social Entrepreneurship

Fund

Amended Legs & Regs. Public procurement reform package State Aid Guidelines

Rise of the Social Enterprise First Phase – mid Nineteenth Century

1844: Rochdale Pioneers and birth of co-operative movement

Early 19th Century Britain - place of enormous change and discontent

• Industrial revolution renders rural handcrafts obsolete

• Hungry Forties

East Lancs / West Yorks hub of social revolution

• Luddite riots (1811-13)

• Peterloo Massacre of (1819)

• Manchester Guardian (1821)

• Anti-corn laws league (1838)

• General Strike (1842) & TUC (1868)

• Independent Labour Party (1893)

Co-operation today - global

Arguably, the most durable and powerful grassroots movement the world has seen

2.6 mn co-ops 250 mn jobs 1 bn members

From Barcelona FC in Spain to Green Bay Packers in US.

Underpin nearly all Champagne & Parmesan cheese & Parma ham

2/3rds of FairTrade production

Indian Farmers Fertiliser Co-op (IFFC) has 56mn members

Japan: 90%+ of farmers in a co-op

Top 300 co-ops have turnover of £1.36trn ($2.2trn)… On par with GDP of Brazil, & just behind UK

Rise of Social Enterprise

Phase one – mid Nineteenth Century

• 1844 Rochdale Pioneers and birth of co-operative movement

Phase two – late Twentieth / early Twenty First Century

• 1960s/70s Fairtrade movement emerges, Body Shop founded • 1980s Growing no. of orgs emerge during recession

‘social enterprise’ begins to be used • 1990s SE-UK say “resurgence” begins, e.g., Big Issue launches • 2001 Social Enterprise Unit founded by UK Government • 2002 Social Enterprise UK founded • 2005 Community Interest Company structure created • 2010 General election, features in Queen’s speech • 2012 Launch of Big Society Capital

Ascendancy of Pubic Services Social Value Act • 2013 First mention in Budget of forthcoming tax incentives:

SITR and Social ISAs. • 2014 Co-op and Community Benefit Societies Act 2014 came

into force

What is a Social Enterprise

Social Enterprise UK: business that trades for a social and/or environmental purpose.

• Will have a clear sense of its ‘social mission’.

• Will bring in most or all of its income through trade and the sale of goods or services.

• Will have clear rules as to what it does with its profits, donating or reinvesting a high percentage of these to further the ‘social mission’.

Tackling the big issues: low carbon energy

Public support for renewable energy projects that owned by and benefit local people incredibly strong.

Polling found: over two-thirds (67%) said would support local community-owned renewable energy projects within 2miles of home. Just 7% against.

450 community energy soc ents now in UK, and > 3,000 across Europe

Now account for 70% of all investment in UK community shares market

Co-operative Energy even offer User Chooser facility: allows customers to opt for community energy – no premium

Won “Renewable Energy Award” at 2015 EU Sustainable Energy Awards.

• 3000 across Europe

• 1,000 Germany

• 600 Denmark

• 450 UK (op and developed)… not 5K!

• Double capacity in 2015

Tackling the big issues: Fair Tax

Fair Tax Mark launched February 2014 Early pioneers: social enterprises

Midcounties Co-operative, Phone Coop, Unity Trust Bank

Co-operatives UK and Social Enterprise UK quickly provided strategic support

Joined by listed and private businesses SSE, Go Ahead, Marshalls, Staffline, Winder

Power

But Soc Ents over-represent: Lush, East of England Coop, Radstock Coop,

the Co-operative Group, Unlimited Potential, Ecology Building Society

And leading to new political engagement Lobby4Good at European Parliament for

Fair Tax Label and related Agreed Dec 2015: 500 for, and 122 against

Rethinking purpose

PwC’s 19th Annual Global CEO Survey (2016)

“we were surprised to discover that more than a quarter (27%) of CEOs believe that their customers are seeking relationships with organisations that address wider stakeholder needs. This surges to 44% when CEOs consider what their customers will prioritise in five years’ time.”

In US, CEOs predict an almost tripling of customers seeking to trade with business with a social purpose (to 41% from 15% today)

Nearly quarter of CEOs (24%) said their company has changed its sense of purpose in last 3yrs to take into account the broader impact it has on society, and a further 12% considering doing so.

What Europe can do for Social Enterprise (and vica versa)

Paul Monaghan,

Director, Up the Ethics

March 2016

twitter @PaulJMonaghan