Toby Johnson
12 December 2014

SEN in Cyprus: 3 tools for identity and visibility

The fifth and last SEN peer review tackled the trickiest and most philosophical of the five clusters of topics – visibility and identity. It brought a flood of comment papers – 14 – and also attracted some new members – Slovakia France – as well as a social entrepreneur from Cyprus. The event took place in the island’s capital Nicosia, Europe's last remaining divided city. Cyprus is just about to launch a support programme for social enterprises, financed from the Structural Funds, which will include a guidance tool, training and seed finance for start-up social enterprises.

 

Visibility of course is the outward expression of identity, and is at the core of what social enterprises are about. You need a strong feeling of identity before you can promote your visibility to others. Any dynamic movement is going to be a whirlpool of innovative ideas competing for credibility, and this is very good thing. We see this currently in the cleavage between the principle-based social economy model and the more results-based company model. This is just the sort of fertile soil from which innovative solutions to social problems grow. But it’s essential that new social enterprises, particularly in countries where the movement is young, should have a strong model, an identity onto which they can latch.

In his background paper, Roger Spear identified seven dimensions of: legal forms, the evidence base, impact measurement, quality standards and brands/marks, promoting and communicating achievements, building dialogue and collaborative relationships, and networking with stakeholders. On the one hand this made the debate much clearer but on the other showed what a complex issue it is.

The working groups drew some non-obvious conclusions:

  • both identity and visibility gain clarity through dialogue with external partners
  • identity does not depend on legal form, but the variety of legal forms complicates things (and can be a barrier where it is absent, as in Cyprus)
  • limits on profit distribution and asset locks are a key factor in distinguishing social enterprise from CSR
  • key stakeholders (e.g. local authorities) can be engaged by offering them a role in governance

In translating identity into visibility, some key factors emerged:

  • a national website (like FISE’s in Poland)
  • understanding the different audiences (authorities, customers) and developing appropriate messages for them
  • providing evidence, and winning emotional engagement through story-telling
  • bringing educational institutions on board

Three different approaches

The meeting reviewed three cases:

1. A social enterprise mark: Finland contributed two marking schemes – the butterfly mark for social films and the new SE mark for social enterprises more broadly. This looks like having a strong cohering effect as it has high quality standards – half of applicants have been refused so far. Importantly, it is managed by the prestigious Finnish Work Association, which also runs other quality marks, so it signifies the mainstreaming of social enterprise into Finland’s business topography.

Marks have two aspects – identity and utility. The rapid take-up of the CIC status in the UK (10,000 registrations) compared with the UK Social Enterprise Mark (320 registrations) seems to show that the utility side is important – there has to be a practical advantage to SEs to invest in qualifying for a mark. Government sponsorship seems all-important.

2. A database for social responsible procurement: The French case also shows the power that the state has to influence the growth of SEs. The website http://socialement-responsable.org/, run by the AVISE promotional agency, is the counterpart of the official policy of socially responsible public procurement. It acts as a sort of ‘Yellow Pages’ for some 4,800 structures d’insertion par l’activité économique (SIAE) – WISEs – by allowing authorities to find suppliers to bid for their contacts.

Though the initiative is led by national policy, most of the business that results from it is regional, and so it is at regional level that that this sort of tool works best.

3. Social accounting: The third case, from Italy, was contrasting. This is the well-established Italian practice of preparing a bilancio soclale – social balance sheet. These annual social accounting reports are promoted as a PR tool for all businesses, and a national award system, the Oscar di Bilancio, exists. They have a particular interest for social enterprises as they are tools to raise finance and win public contracts. They are obligatory for all ‘social enterprises’ registered under the 2006 law) and in two regions – Lombardy and Veneto – for all social co-operatives too. But the system is fragmented among Italy’s regions, and consequently lacks national visibility. By showing the social added value that an SE contributes it has great potential as a marketing tool – and this is currently underexploited.

An alternative economic model

The various schemes reviewed pay attention to different factors. The agreement signed in France includes the criterion of a maximum 1:10 wage differential. The Finnish scheme follows the SBI definition in insisting on a primary social aim and limited profit distribution, but does not include an asset lock or democracy (only transparency). Another scheme mentioned is REVES’s TSR – territorial social responsibility – mark, which has the advantage of flexibility in that it allows regions to pick their own indicators that suit their local circumstances

One of the outstanding actions of the Social Business Initiative is to create a list of quality marks. The UK mark is already registered as a Community Trademark. The feeling of the peer review is that at EU level harmonisation of the process of creating a mark is the right level – an EU mark would be premature.

The schemes share the features of focusing on the outputs the social enterprises have for society – but they stop short of presenting social enterprise as a different economic model. And this is perhaps the underlying issue of identity – the elephant in the room. Europe is reeling from the recession caused by the excesses of unregulated financialisation, and inequality is mounting unsustainably. An alternative model is something that social enterprises should play up rather than suppress. If it doesn’t, the risk is that our financial system reverts to ‘business as usual’ and the cycle plays out again.

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