Advisory Report 40: Towards a level playing field for all business forms in function of greater societal impact
Businesses at the intersection of financial profit and societal impact face an unequal playing field on various fronts. Much of this is linked to the uneven playing field for the different (legal) business forms. VARIO makes a series of recommendations to remedy this.
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Summary
To tackle major societal challenges and achieve the necessary transitions, we need all groups of actors. Businesses that pursue societal impact through their core activity and thus operate at the intersection of generating financial profit and creating societal impact, are certainly part of this. In the current situation, however, there is no level playing field for these so-called 'impact enterprises' compared to other businesses on various fronts.
VARIO outlines in its report the terminology related to impact-driven entrepreneurship (chapter 2). This is followed by an exercise mapping the various legal business forms in Flanders (Belgium), along with some variations, and assessing them against five characteristics (chapter 3). Chapter 4 is dedicated to the specific challenges, often related to financing, that the different business forms and impact enterprises face. In chapter 5, VARIO also examines business forms, frameworks, and initiatives outside of Flanders and what we can learn from them.
Based on the report, VARIO provides a series of recommendations in its advice to take significant steps towards a level playing field for all business forms with regard to societal impact. The recommendations focus on the following areas:
- Knowledge about and access to different business forms to formally structure the enterprise,
- Access to government support,
- Access to private financial resources,
- A framework that ensures 'positive externalities' do not result in competitive disadvantages.
In addition, to strengthen the combination of business and purpose entrepreneurs with the appropriate skills are needed. Finally, VARIO makes another recommendation regarding the monitoring of business forms, aimed at tracking the effectiveness of the implemented policy.
To build sufficient specific knowledge about a more recent new business model that combines purpose and profit which is gaining traction in Europe—namely steward-ownership—a separate analysis report was prepared by 'S&L', commissioned by VARIO.