Towards an "exponential increase" of social businesses

By Christian BlockLex Kleren Switch to German for original article

The social and solidarity economy still ekes out a niche existence today. For Daniel Tesch, however, it is clear that this will change with the coming generations. In the interview, the director of the Union luxembourgeoise de l'économie sociale et solidaire (Uless) also explains why, in his opinion, all companies should be obliged to document their social impact.

Daniel Tesch has been director of the Union Luxembourgeoise de l'économie sociale et solidaire Uless since May 2020. Founded in July 2013, the "mother of all social enterprises (SIS), " as the lawyer jokingly calls the umbrella organisation, represents, according to its own information, the interests of more than 300 actors in the social and solidarity economy with approximately 20,000 employees in a direct and indirect way. Uless itself currently has 61 members. We spoke with Daniel Tesch about possible adjustments to the social enterprise model and the outlook for the potential of the social and solidarity economy as a whole.

Lëtzebuerger Journal: We are here at the Social Business Incubator, where Uless is also based. Is this the place where people who are interested in social business come?

Daniel Tesch: The Uless is basically an umbrella organisation, but we are also a support organisation, which means we stimulate the influx of people coming our way, young entrepreneurs from the lyceums or professionals who have decided to move into the impact economy (in the narrower sense, an economic activity that brings about social or environmental change in addition to a financial return, ed.). This means that the movement has different sources, and we are trying to centralise that here. We are also trying to get the community to be self-sustaining and to network with each other so that they can help each other.

An SIS is based on a company, so at first this is more like the Anglo-Saxon model, but at the same time there are limitations. Is the SIS a hybrid model that enables different forms of social economy, or simply nothing half and nothing whole?

Around 2013/2014, these considerations [for a law] emerged. The social and solidarity economy was, after all, a state secretariat that was attached to the Ministry of Labour and Employment in 2013 under the leadership of Nicolas Schmit, who was very committed to this cause. Paulette Lenert accompanied the text as a lawyer at that time, which was still under Minister Romain Schneider. It was basically a panel of lawyers who drafted the text. People from big law firms who did it on a voluntary basis because they themselves were involved in non-profit associations. People who actually come from the capitalist movement but, let's say, have a heart.

Instead of generating dividends again, a social impact should be achieved, a contribution to the common good. I already see this as a sign of a generation, and the next generation is even more strongly moving in this direction. The team that drafted this law used an Anglo-Saxon code, of course, because they worked a lot with banks and funds. But they also had their own legal background, which is French and Belgian; so they arranged our normal law with these concepts from the Anglo-Saxon economy. It is not a hybrid, but rather a synthesis of all these elements. The parties involved have deliberately edited the text so that there have to be balances, and I think there are in this law.

In 2021, the SIS model has already been adjusted once in law. But you have indicated that other modifications are possible?

The 2021 adjustment regarding the external audit was more of a correction, and now basically a version is coming that is supposed to eliminate all the small disadvantages that still exist. To this end, we are asking the entrepreneurs themselves what they would do if they could improve something. To name one example: Today, it is impossible for a shareholder to lend money to his company when it needs capital.

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