Toby Johnson
21 January 2015

The Finnish Social Enterprise Mark (Yhteiskunnallinen yritys-merkki)

It is estimated that there are between 5,000 and 12,000 social enterprises of various sorts in Finland, and three “labels” now exist for them: the Butterfly Mark, the Social Enterprise Mark, and membership of Arvo-liitto. It is yet to be seen how the relationship between them will evolve.

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The oldest of the three, the Butterfly Mark, is used by 89 work integration enterprises registered under the Social Enterprise Act of 2003. These may take any legal form, the criterion for registration being that a minimum of 30% of employees are disabled or previously long-term unemployed. Registration brings with it eligibility for start-up support, public wage subsidy, and in some circumstances an additional wage subsidy.

The Finnish Social Enterprise Mark (Yhteiskunnallinen yritys -merkki) was launched in 2011. It takes a much broader definition of social enterprise akin to the European Commission’s definition, and sets three primary criteria:

  • a principal social objective
  • limited profit distribution (less than 50%)
  • transparency and openness

Secondary criteria are environmental responsibility, customer and community orientation and employee wellbeing.

The mark is managed by the Association for Finnish Work, a respected certification institution which also runs the Key Flag and Design from Finland marks. So far 49 enterprises have been granted the mark, and a similar number have been refused. The government has given the mark a €70,000 grant for initial marketing.

The Arvo-liitto association was established in December 2014 with 12 founder enterprises. It is a member of the Confederation of Finnish Industries, so gives social enterprises a voice in the tripartite social dialogue. Its principles are similar to those defining the Mark, but are more precise in that it adds the criteria of market activity, private ownership and independence of the public authorities.

Lessons of social enterprise mark schemes

  • Finland has established brand which distinguishes Finland has separate marks for work integration enterprises (Butterfly mark) and for social enterprises on the EU model (Social Enterprise Mark);
  • Rather than setting up a separate certifying agency, Finland has given the job of promoting and managing the Social Enterprise Mark to an established and respected standards institution. This has a mainstreaming effect by presenting social enterprises in parallel to firms that promote their Finnish sourcing (Key Flag) or their good design (Design from Finland);
  • The recently-established Arvo-liitto association for social enterprises is a further mainstreaming and visibility tool, as it is a member of the Confederation of Finnish Industries;
  • Marks are long-term institutions, so it may not be appropriate to fund them from short-term sources such as the ESF. Their sustainability should be ensured through a reasonable subscription paid by holders;
  • The convergence of criteria for social enterprise marks on the EU definition will be helpful in facilitating cross-border trading.