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Profits with a purpose

This was a very interesting week in parliament, during which our legislative work continued unabated. This past week we enacted a long-awaited legislative framework that will now make it possible for social enterprises to be established and duly recognised. More than that, the Social Enterprise Act will enable this sector to develop into a new pillar of growth for our economy and a key societal contributor for our people.

Discussions on this bill started almost seven years ago and were extended over two legislatures and a number of ministers. The moment I took office, I made it a point to get this one through, putting forward specific amendments that would make it possible for social enterprises to achieve their full potential.

Last Thursday, parliament was presented with a reinvigorated bill that intertwines our ambition for a wider societal inclusion with adequate entrepreneurial manoeuvrability that makes it possible for this sector to thrive and prosper.

We wanted to challenge the long-standing financial dogma that the maximisation of shareholders’ profits ought to be the only objective of all commercial activities. The Social Enterprise Act will now make it possible for Maltese enterprises to pursue an ongoing commercial activity while explicitly prioritising their social or environmental target over profit maximisation. It was my prerogative to ensure that this new law would empower different ability individuals and other disadvantaged employees by supporting their productive engagement in our labour force. Our intention is to confront workplace tokenism by helping socially-oriented companies to fulfil the potential of their human capital.

I am also convinced that the potential of social enterprises should not be constrained by their dependency on government funding or private donations. These companies need to be able to attract and secure the necessary financing for their projects. This is why we legislated in such a manner that reduces hindrances to financial flows while still maintaining our intended objective: the creation of a vibrant economic segment driven by inclusive growth and ambitioning for a wider societal and environmental progress.

As we nurture these home-grown social enterprises, we also want to position Malta as a jurisdiction of choice for profit with purpose companies, eco-entrepreneurs and social-conscious investors. Across Europe, more than six million individuals are employed by two million social enterprises.

In France and Belgium, social companies account for a third of newly-instituted commercial activities. The potential ahead of us is huge, particularly if we leverage on the existent ecosystem and the infrastructure being used to attract and support mainstream start-ups to our islands.

We managed to enact an important piece of legislation which provides a solid regulatory framework while encouraging growth and investment opportunities. An act which compares extremely favourably with similar EU legislation as it allows for social enterprises and their investors to do well while doing good.

Through this act we are also introducing the concept of social impact reporting to our commercial operators. A relatively novel concept within our business community which allows companies to measure their positive contribution to their social or environmental commitments. I am a strong believer that whatever gets measured gets done and this tool will make it easier for social enterprises to achieve their intended milestones.

Undeniably, I am very satisfied with what we managed to achieve but I am also very pleased with the way we managed to achieve this. This is yet another example of how constructive dialogue can achieve better results for the common good.

Stakeholder engagement was crucial all along. In recent months, we were approached by various associations and interested parties which put forward additional recommendations, many of which were taken on-board and form an integral part of the legislation itself.

It is with this same spirit of collaboration that, together with the opposition, we managed to produce a strong and proactive regulation for our social entities. This element of consensus building, which is so second nature in the European institutions, is truly what I would love to see more of in our house of representatives.

With less antagonism and a bit more of mutual trust we could achieve so much more.

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