SKI.F.T. Newsletter #1

Interview: Green transition challenges for small social economy enterprises

Micro and small social economy enterprises, in their efforts to contribute to green transition and transform activities accordingly, might rely even more than others on a strong network of partners, including intermediary organisations and public authorities. In the context of the second transnational meeting in Bologna, the SKI.F.T. team met Vincenzo Cangiano, Sustainability Manager of Arbizzi cooperative , Rosaria Mastrogiacomo, Sustainability Officer at Legacoop Emilia-Romagna and Gabriele Marzano, Senior expert on VET, Employment, Regional development and Innovation policies at the Emilia-Romagna Region.

Packaging – how to make it more sustainable or how to reduce it… – is one of the topics in discussions around the environmental impact of an enterprise. It is also the main area of activity of Arbizzi, your cooperative. Could you tell us a bit more about your cooperative and how it did develop/adapt its activities over the years?

Vincenzo Cangiano:

Arbizzi was established as a cooperative in 2014 (even though it existed before, but as a completely different type of enterprise). It has 30 employees and 10 freelance sales professionals.  As a small enterprise, Arbizzi does in theory not have the obligation to carry out ESG and sustainability reporting in general, and to set up related strategies and actions. However, given that its main sector of activity – selling packaging – means mainly selling plastics the cooperative decided that information of different type of stakeholders is fundamental. Plastics are for sure not good for the environment. However, the solution is not to demonize it, but to reflect – including to reflect on what is currently in my view the biggest problem: the way our society deals with plastics.  We conduct thus a number of activities to inform all our stakeholders about our activities, but beyond that also to contribute to educational activities at schools, universities and enterprises on the topic “sustainability”. Something I could state whilst teaching for example in schools and universities is that youngsters are nowadays well informed for example about circular economy and possible recycling practices in their daily life. However, they do not know how to translate this also to spheres such as the labour market and the world of enterprise and what sustainability means in all its complexity. Here, we as social economy entrepreneurs can and should share our experience, explaining concepts such as due diligence against the background of our own practices.

Rosaria Mastrogiacomo:

Legacoop made similar experiences – for example when realizing its “Coopstartup” initiative which had the objective to simulate the set-up of cooperatives in secondary schools. Pupils were invited to think about specific challenges they wished to solve, specific needs they wanted to respond to with entrepreneurial activities. We helped them in setting up the business model and plan, etc., but could see that they were not aware of what sustainability means taking a 360° perspective, i.e. applying it in different spheres thinking in terms of environmental and social sustainability, etc.

Vincenzo Cangiano:

Coming back to our sustainability-related policies and actions: All these initiatives have their costs – especially also for a rather small cooperative such as ours. However, this investment will be rewarded – we already notice it in our rising recognition by a number of stakeholders and partners, including partner enterprises, associations or banks.

Also: Under current regulations our cooperative is not obliged to carry out sustainability reporting. Yet, regulations might change rapidly. Moreover, our clients – many of them large enterprises – already request this type of information from us.

How do you involve cooperators, employees, clients and other stakeholders in the (re-)planning of activities, policies and strategies of the cooperative?

Vincenzo Cangiano:

This is not an easy question and we started to work on this rather recently.

We try to understand the needs of all stakeholders outside of the enterprise – the needs not only of clients or suppliers, but also of politics, voluntary organisations that often cooperate with us and others. A part of them thus do not necessarily have a direct economic contact, but rather a social contact with our enterprise…

We try to find out about their needs and try to involve them in the construction of our vision.

Here you have to keep in mind that we are a commercial enterprise, not a manufacturing enterprise. Therefore we have to focus more on the innovation of the process and related technologies allowing for example to reduce material whilst improving also social aspects linked to the production process (e.g. safety at work).

At the same time we also need to work with stakeholders on the manufacturing side and their needs. Then, it is necessary to create links between needs of producers and those of consumers (including large retailers with which we work as well).

Yet, involving all stakeholders in this parcours is complicated, as unfortunately not all of them might be willing to listen and learn, as no immediate economic rewards are linked to this.

Many small and micro social economy enterprises do not have/cannot afford a sustainability manager? What would be your recommendation to them regarding the development and implementation of green transition processes?

Vincenzo Cangiano:

A Sustainability Manager has to combine a number of transversal competences. Knowledge on environmental sustainability alone is not enough. Competences needed include enterprise strategy development, management, economy. IN my case also health&security, integrated management systems combining environment, quality and security. Time is needed to develop them and this process should start ideally in universities. All this is a big challenge for small cooperatives and their limited (human) resources. Appointing and training a sustainability manager has a significant cost. Yet, in my view it is – for different reasons – absolutely necessary to develop these profiles and to start with this now, as it takes time. A number of stakeholders, including banks, show an increasing interest and related requests in this respect. As a small player – but not only – it is therefore also important to be part of associations and develop a network of persons with which it is possible to cooperate on these topics and in the exchange of knowledge and expertise.  Organisations such as Legacoop, of which we are part, are therefore crucial and important platforms to jointly learn in a challenging context and period in which laws and technologies change rapidly.

Rosaria Mastrogiacomo:

Yes, as Legacoop Emilia-Romagna we have the objective here to put in touch persons, enterprises and organisations. Working on sustainability is not something that should be done individually. It is a way of living, working and doing business you need to do together with other actors.

Rosaria, as Legacoop you accompany (member) cooperatives providing different type of services, training, opportunities for networking, etc. What are the type of tools and support you offer to cooperatives so far regarding green transition? Which capacities would you like to develop more as an intermediary organization – what are your hopes in this regard when taking part in initiatives such as SKI.F.T.?

Rosaria Mastrogiacomo:

Legacoop has identified sustainability as a priority theme. We have the objective to help our cooperatives to advance here. This is done in different ways: through skills development (training courses and workshops) linked to environmental and social sustainability, through advisory services helping our members very practically to transition to more sustainable practices (for example in the field of energy) – delivered also by our service company Innovacoop, through opportunities for networking and knowledge exchange or through information and support (e.g. in accessing project financing, etc.).

At the same time we find ourselves in continuous training on these subjects. It is a challenge to stay updated on the regular changes regarding regulations, technologies, practices. We make a lot of effort to organize on a regular basis occasions for knowledge exchange within the association – linking the national, regional and local level, involving member enterprises from different sectors and different parts of Italy.

Gabriele Marzano, in our initial SKI.F.T. screening of tools that could help promoting green transition of social economy enterprises we discovered a surprising lack of instruments combining environmental impact and social economy principles. How could policy-makers stimulate the development of appropriate tools and capacity-building processes? What are the challenges policy-makers and administration might be facing here?

Gabriele Marzano: It is true that we do not really cross both themes – environmental sustainability of enterprises and the promotion of social economy principles/social impact. But this is not due to a lack of interest, but related to the fact that, if we plan an intervention regarding the environment, we address all type of enterprises. One also has to keep in mind that, in our region, the social economy in itself is a large sector and exists in different forms and throughout a diversity of sectors of activity. Social enterprises as such are diffused in the general economy.

This does not mean that we do not have specific interventions targeting specifically the social economy. However, in the case of the promotion of sustainability-related competences these targeted measures are rather rare. Sometimes they might exist in cases where specific service contracts with (social) cooperatives operating in green transition-related fields of activity, to give just an example, exist.

What is needed also with regard to sustainability is the development of other transversal competences such as management. We promote this in the framework of programmes addressed to a diversity of enterprises, including the social economy.

Coming back to the topic of local green social value chains and the place also of micro and small social economy enterprises here: How could they be further promoted, how could inter-cooperation be fostered?

Gabriele Marzano:

In Emilia-Romagna, social policies are implemented very much through the activities of cooperatives, in particular social cooperatives. In the context of public contracts related for example to recycling services many administrations impose a specific quota of these services which has to be attributed to social cooperatives.

How could the role of micro and small social economy enterprises further be improved? First of all, the revenue streams of this type of enterprises – particularly if they are active in the work integration sector – have to strengthened (e.g. through diversification of activities and the already mentioned capacity-building regarding management in general). Moreover, public administration could more strongly use compliance standards obliging for example a profit firm to cooperate with the social economy in the provision of the services. Cooperation between mainstream businesses and the social economy in a perspective also of value chain creation can also be fostered further through imposing CSR-related reporting. Such obligations might stimulate profit firms to establish partnerships with the social economy. This, however, is mainly the role of local administrations.

FISE Eco-Auditing (PL)

A specific Eco-Auditing tool has been created and implemented by FISE on the basis of a grant from Masovian voivodship for the development of green transition-related advisory services for social enterprises.

The tool focuses on environmental management processes within a company, i.e. on actions to be taken by management and staff of the company regarding the management of space, use of different type of equipment, waste management, etc.

FISE Eco-auditing was applied for the first time in 2023. After six pilot tests in 2023, seven other enterprises will go through the eco-auditing in 2024. All test companies are micro and small social economy enterprises. FISE Eco-Auditing includes measurements/mapping (e.g. of the space used by an office, café, kindergarten…), the analysis of data as well as interviews with and a survey among members of the management of the respective company and staff. At the end of the process, a report, including specific recommendations, is provided to the company after a last exchange with the latter’s management and a meeting with the staff is held in which conclusions and recommendations are presented.