Labels for the Social Economy

1. Introduction

Abstract

Social economy entities contribute to a wide range of sectors and policy areas such as employment, social inclusion, as well as environmental and digital transitions. However, it might be difficult for policy makers, other businesses, investors and consumers to identify them given the diversity of their legal forms, objectives and operational approaches. This can also hinder channelling actions such as taxation measures, procurement, investments and consumption choices towards social economy entities. Labels, which might include legal statuses for social enterprises and public benefit organisations, as well as private labels, certifications or marks, can help to identify social economy entities, their goods or services and the financial products aimed at them. Easier identification through labels with transparent verification mechanisms and effective communication can raise awareness of and trust in the inclusive and people-centred approach of the social economy.

What is the social economy and why is it important?

The social economy typically refers to a set of entities such as associations, non-profit organisations, co-operatives, mutual societies, foundations and social enterprises. Both the 2023 EU Council Recommendation on developing social economy framework conditions and the 2022 OECD Recommendation on the Social and Solidarity Economy and Social Innovation refer to the activity of these entities and organisations as typically driven by social objectives, solidarity, the primacy of people over capital and, in most cases, by democratic and participative governance (OECD, 2022[1]; Council of the European Union, 2023[2]). They also highlight their social purpose and business models centred around collaboration and the re-investment of surplus into achieving their purpose (OECD, 2023[3]).

Social economy entities contribute to a range of policy areas. Estimates show that they employ at least 11.5 million people in the EU, representing 6.3% of the employed population and in 2021 had a turnover of EUR 912.9 billion (European Commission, 2024[4]). Moreover, social economy organisations play an important role in addressing the needs of underserved groups such as women, youth, older persons and refugees through providing employment, training, housing and care, among other services (OECD, 2023[5]; OECD, 2022[6]; OECD, 2023[7]). They operate in a range of sectors such as health and social services, trade and retail, energy, education, tourism and recycling, and are increasingly recognised by countries for their contribution to community building, as well as the green and digital transitions (OECD, 2023[8]; OECD, 2023[9]; OECD/European Commission, 2022[10]; European Commission, 2024[4]).

What do labels refer to?

Depending on national contexts, labels for the social economy can include legal statuses (albeit not always), private labels, certifications and marks that single out organisations, as well as their goods and services. These terms can be used interchangeably in many countries. However, usually, certification refers to a label that is awarded after an assessment by a third party. Labelling can also be understood in broader terms such as any action that signals an adherence to a set of defined standards. For example, belonging to an industry association based on certain criteria such as ethical finance can show that an organisation follows pre-defined principles.

Why are labels important for the social economy?

The OECD Recommendation for the Social and Solidarity Economy and Social Innovation and the EU Council recommendation on developing social economy framework conditions emphasise the importance of exploring labelling systems for the social economy (OECD, 2022[1]; Council of the European Union, 2023[2]). More broadly, the importance of transparent and credible sustainability labels is highlighted in the EU Directive 2024/825 of the European Parliament and of the Council on empowering consumers for the green transition (European Parliament and the Council, 2024[11]).

Labels can bring several benefits to social economy entities; the main ones are outlined below.

Identification and visibility among governments, consumers, other businesses and investors

Labels for social economy entities can be a tool to identify and improve the visibility of social economy entities as well as their products. Labels can act as an identification mechanism in contexts where legal frameworks for the social economy are less developed but can also be part of existing social economy legal tools. For instance, the public benefit status is used to channel policy measures to labelled organisations, some of which are part of the social economy, in Germany, Hungary and the Netherlands, where there are no legal frameworks dedicated to the social economy. In the Netherlands, a private Social Enterprise Code is used as an identification mechanism for social enterprises. In France, on the other hand, the ESUS legal status for social enterprises is part of the 2014 Social Economy Law (OECD, 2023[3]).

Labels allow stakeholders, including policy makers, financial players, businesses and consumers to channel their actions towards the labelled entities. Such actions can include donations, funding, tax measures, procurement and purchasing from social economy entities. This is particularly important as 71.2% of responding organisations to the 2023-2024 Social Enterprise Monitor identify poor understanding/awareness of social enterprises among general public/customers as a barrier. Poor understanding and awareness of social enterprises among banks/investors/support organisations is a barrier for 69.1% of respondents (Gazeley, Bennett and Dupain, 2025[12]).

Access to funding and preferential taxation measures

Labels can facilitate access to funding and taxation measures. This is particularly important given the 39% gap between financing needed and secured among the surveyed social enterprises in the 2023-2024 Social Enterprise Monitor (Gazeley and Bennett, 2025[13]). For instance, the ESUS accreditation in France gives the labelled entities access to financing from solidarity-based financial products and additional funding from public development banks, as well as fiscal advantages for investors. The social enterprise legal status in Latvia gives access to grants for company development and compensations for employment of persons with disabilities, as well as some tax exemptions. The People and Planet First verification gives verified organisations access to GrantStation, a platform that helps to identify potential funding sources. The certificate of compliance with the European Code of Good Conduct for Microcredit Provision is required for microfinance institutions, some of which are social economy entities, to access EU funding under the InvestEU Social Investment and Skills Window and the Employment and Social Innovation (EaSI) strand of the European Social Fund Plus.

Access to public and private markets

Some social economy labels give labelled entities access to public and private markets. This can have a significant impact on social economy organisations as disadvantages concerning public procurement offerings is a barrier for 59.3% of responding organisations to the 2023-2024 Social Entrepreneurship Monitor (Gazeley, Bennett and Dupain, 2025[12]). Public labels such as the ESUS accreditation in France and the social enterprise status in Latvia give labelled entities access to public procurement opportunities. In the Netherlands, companies that have signed a social return on investment contract with 60 municipalities are encouraged to purchase from enterprises who have the Social Enterprise Code label. Private procurement is also important as in the 2023-2024 Social Enterprise monitor, 49.3% of responding social enterprises identified disadvantages concerning private procurement offerings as a barrier (Gazeley, Bennett and Dupain, 2025[12]). The private People and Planet First verification, for example, allows verified entities to show their status on the SAP Business Network and potentially expand their business customer base.

However, label proliferation and inadequate implementation can lead to confusion, increase administrative burden and ultimately result in loss of trust in labels and the social economy more broadly. Countries could reflect on the necessity of labels when existing legal forms already allow for clear identification of social economy entities. Adding labels in this case can create an additional administrative burden for organisations and confuse consumers and investors. Moreover, robust verification mechanisms need to be developed to ensure a rigorous implementation of labelling systems and avoid greenwashing.

What is the aim and approach of this guide?

The guide maps several social economy labels and provides guidance for the design, implementation and evaluation of labels. The mapping reviews and compares public and private labels that are specific to the social economy, broader impact labels, and considers some financial and implicit labels that can benefit social economy entities. It presents the benefits and challenges associated with different types of labels for public authorities, social economy entities, consumers and investors. The guidance builds on the findings from the mapping to provide a practical checklist of questions that policy makers or private label managers can consider when designing, implementing and evaluating labels for the social economy. The guide is based on a range of sources described in Box 1.1.

Box 1.1. Evidence informing the guide

The guide builds on European Commission mappings of social enterprises, as well as findings from the legal workstream of the OECD Global Action “Promoting Social and Solidarity Economy Ecosystems”, the OECD Practical Guidance for Policy Makers on Designing Legal Frameworks for Social Enterprises, the Policy Guide on Legal Frameworks for the Social and Solidarity Economy and other relevant publications.

These sources were complemented by a review of 17 public and 9 private labels specific to the social economy, 11 broader impact labels, 4 solidarity and impact finance labels, 3 ESG finance labels and 6 implicit labels.

A survey on labels for the social economy was sent to the Commission Expert Group on the Social Economy and Social Enterprises (GECES) and the non-EU members of the OECD Informal Expert Group on the Social and Solidarity Economy and Social Innovation in June-July 2024. It has received 45 responses. Almost half of these responses (44%) came from social economy and social finance networks, almost a third (29%) from public authorities, almost a quarter (24%) from social economy entities and 2% from academics. More than three quarters of responses (76%) covered social economy labels available in Western Europe, almost a fifth (18%) of responses mentioned labels available in Eastern Europe, 13% indicated cross-border labels and 4% (2 responses) were dedicated to labels outside of the EU (Canada and Korea). The responses were almost equally split between public (53%) and private (47%) labels. While the survey is not representative, it reflects the points of view of different stakeholders, including social economy entities, label managers and networks, who might have different levels of awareness and knowledge about labels.

The work also builds on the findings from 25 focus group discussions and interviews conducted with 50+ stakeholders in September – December 2024 (see Annex A).

Sources : European Commission (2020[14]), OECD (2022[15]), OECD (2022[16]), OECD (2023[3])

References

[2] Council of the European Union (2023), Council Recommendation of 27 November 2023 on Developeing Social Economy Framework Conditions.

[4] European Commission (2024), Benchmarking the socio-economic performance of the EU social economy - Improving the socio-economic knowledge of the proximity and social economy ecosystem.

[14] European Commission (2020), Social enterprises and their ecosystems in Europe. Comparative synthesis report, https://op.europa.eu/en/publication-detail/-/publication/bf0d742a-73eb-11ea-a07e-01aa75ed71a1/language-en.

[11] European Parliament and the Council (2024), Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024.

[13] Gazeley, T. and T. Bennett (2025), Executive Summary: “The State of Social Enterprise in Europe – European Social Enterprise Monitor 2023-2024.

[12] Gazeley, T., T. Bennett and W. Dupain (2025), The State of Social Enterprise in Europe: European Social Enterprise Monitor 2023-2024.

[5] OECD (2023), “Beyond pink-collar jobs for women and the social economy”, OECD Local Economic and Employment Development (LEED) Papers, No. 2023/7, OECD Publishing, Paris, https://doi.org/10.1787/44ba229e-en.

[9] OECD (2023), “Platform cooperatives and employment: An alternative for platform work”, OECD Local Economic and Employment Development (LEED) Papers, No. 2023/16, OECD Publishing, Paris, https://doi.org/10.1787/3eab339f-en.

[3] OECD (2023), Policy Guide on Legal Frameworks for the Social and Solidarity Economy, Local Economic and Employment Development (LEED), OECD Publishing, Paris, https://doi.org/10.1787/9c228f62-en.

[7] OECD (2023), “The social and solidarity economy as a partner along the refugee journey”, OECD Local Economic and Employment Development (LEED) Papers, No. 2023/15, OECD Publishing, Paris, https://doi.org/10.1787/174514e3-en.

[8] OECD (2023), “What is the social and solidarity economy? A review of concepts”, OECD Local Economic and Employment Development (LEED) Papers, No. 2023/13, OECD Publishing, Paris, https://doi.org/10.1787/dbc7878d-en.

[1] OECD (2022), Recommendation of the Council on the Social and Solidarity Economy and Social.

[16] OECD (2022), Designing Legal Frameworks for Social Enterprises: Practical Guidance for Policy Makers, Local Economic and Employment Development (LEED), OECD Publishing, Paris, https://doi.org/10.1787/172b60b2-en.

[15] OECD (2022), “Legal frameworks for the social and solidarity economy: OECD Global Action “Promoting Social and Solidarity Economy Ecosystems””, OECD Local Economic and Employment Development (LEED) Papers, No. 2022/04, OECD Publishing, Paris, https://doi.org/10.1787/480a47fd-en.

[6] OECD (2022), “Unlocking the potential of youth-led social enterprises”, OECD Local Economic and Employment Development (LEED) Papers, No. 2022/11, OECD Publishing, Paris, https://doi.org/10.1787/d5bddad8-en.

[10] OECD/European Commission (2022), “Policy brief on making the most of the social economy’s contribution to the circular economy”, OECD Local Economic and Employment Development (LEED) Papers, No. 2022/01, OECD Publishing, Paris, https://doi.org/10.1787/e9eea313-en.