Opportunities for Social Business

At the Clann Credo “Common Cents” conference in Dublin on March 28th, Emmanuel Vallens of the Single Market Policy unit spoke about the development of the new Social Business Initiative currently being negotiated by the European Parliament. The proposals are based on the recognition that social business is an essential part of long term recovery in local markets and represents a change in the Commission’s attitude towards economic growth. Social business are defined by the Commission as those meeting a social need, re-investing the profits in the organisation’s objectives, and having internal governance that reflect a social good. In order to promote and encourage such businesses the policy unit recommends three dimensions of practice to be considered by the Parliament when drafting legislation. Firstly, improve the access to finance through changing the thresholds of many established funds and also allowing social investment funds operate across borders. Secondly, to increase awareness of social businesses particularly in local authorities but also the banks and other financial institutions. Finally, to encourage public procurement practices that would favour social businesses by recognising the positive social impacts they can have. The development of this initiative is good news all round for the sector though final details of the initiative may be watered down somewhat as the politicians work to make the proposals acceptable to all national governments. The Social Business Initiative is expected to pass through the EU Parliament by the end of 2012. Once formally adopted the initiative has then to pass the implementation test within each country and further difficulties can be expected at this stage.