Sustainable business development through cooperative companies: the rebirth of a model

On March 30, 2021, during the digital event «Productivity and Sustainability: the Challenge of Cooperatives» were illustrated the results of the «Program of activities to develop the Italian cooperative system», promoted by the Ministry of Economy, which financed feasibility studies in collaboration with Invitalia. This is not a mere coincidence: cooperatives, in fact, are considered a key player by the United Nations for the achievement of the Sustainable Development Goals.

The topic was first outlined in 1987 by the so-called «Brundtland Report» of the World Commission on Environment and Development, according to which sustainable development is « development that meets the needs of the present without compromising the ability of future generations to meet their own needs». The scope of the definition – originally linked to environmental protection – has been broadly developed over the years, culminating in 2015, when the United Nations approved the 2030 Agenda and its 17 global goals. Today, the concept of sustainability has no longer a sectoral value, but a multifaceted one, characterized by an integrated vision of the different interconnected aspects of sustainability. Therefore, it also includes an economic and social development in the broadest sense.

The wide sense of the new goals of the 2030 UN Agenda represents an opportunity for enterprises to give their own contribution. In this context, over the last few years, a debate has emerged mainly focused on the pursuit of sustainability by carrying out business activities with traditionally lucrative corporate models: that is, those types of companies which are characterized by the objective of profit distribution as the exclusive and selfish goal of shareholders.

The subject arouses much attention from economic and legal operators. In the regulatory field, however, the national discipline has, for the moment, intervened only marginally or, in any case, is merely eventual insofar as it is entrusted to self-discipline and limited to specific sectors. (e.g. Corporate Governance Code for listed companies) This raises the risk that today, in the lack of a complete legal framework for the many profiles involved in the phenomenon, the exercise of business activity in a sustainable manner represents, for the most part, a label used for primarily commercial purposes and, ultimately, a promotional slogan. This is without detracting from the virtuous cases of corporate sustainability, which are constantly arising.

It would be wrong, however, to believe that the concept of sustainability is a novelty in business law. There is, in fact, a widely diffused model of company which, since its origins, has been marked by the exercise of entrepreneurial activity in a sustainable manner. Founded in Europe in the 19th century as a reaction to the capitalist business model, cooperatives are still today promoters of sustainability and, in this respect, have attracted the attention of the United Nations for the achievement of the Sustainable Development Goals. This finds widespread confirmation in the many initiatives in this regard: among many, the case of the Coops for 2030 campaign launched already in 2016 by theInternational Cooperative Alliance or the fact that the International Day of Cooperatives on July 7, 2018 was dedicated to the topic of «sustainable companies through cooperation».

Cooperative companies have always represented an alternative model to the lucrative one. In fact, depending on the sector in which they operate, the main activity of a cooperative enterprise is to provide goods or services or work opportunities to its members, at more advantageous conditions than those they would obtain on the market: this is the mutualistic purpose, aimed at satisfying a specific need of the members other than subjective profit. Therefore, it seems possible to affirm that cooperatives, oriented by democratic and solidarity-based principles, are leaders in sustainable development from different perspectives: as economic actors, they create employment opportunities; as enterprises that enhance the person of the member, they contribute to equity and social justice; as democratic bodies, they allow members to play a key role in local societies and communities.

This seems sufficient to define them as a model of sustainable enterprise. In fact, the activity carried out, even if addressed to members (and, therefore, as a selfishly oriented declination of the mutualistic purpose), is always directed towards the satisfaction of the interests of a category worthy of protection. In other words, the traditional cooperative is, in any case, a stakeholder-oriented enterprise, even if a singlestakeholder. In addition to their mutual purpose for the benefit of their members, cooperative enterprises act in pursuit of a constitutionally protected social function. In recent years, this consideration has found practical expression in the activity of social cooperatives, which can be considered the paradigm of multi-stakeholder enterprise.

It has to be said that cooperative companies have gone through a “dark period”, due to a degeneration of the model sometimes used as a mere corporate screen for the pursuit of interests that are in fact lucrative and even illicit. In this sense, they have been defined as “false cooperatives” or “spurious cooperatives”: both allusive concepts to the cooperative form and to the lucrative substance of the activity carried out.

Today, however, by adopting the sustainability approach, it seems that this annihilation of cooperatives with respect to profit-making models of company has no longer reason to exist.

There are at least three reasons. (i) Firstly, cooperatives can recover their autonomy and aspire to be part of complex markets oriented towards the pursuit of sustainability objectives; in other words, to have a place in the sustainability-oriented supply chainof large corporations. This, also thanks to the recent «Program of activities for the promotion and development of the cooperative system» calibrated on feasibility studies financed by the Ministry of Economy and carried out in collaboration with Invitalia.

(ii) Secondly, since cooperatives are, as mentioned above, “leaders” in sustainability, they can serve as a proven model of experience and best practices for other forms of profit-making enterprise to develop innovative, financially sustainable and, indeed, replicable business models.

(iii) Finally, cooperatives can represent a model to which the new forms of enterprise driven by non-selfish intentions (and, therefore, of general interest) can draw inspiration not only from an operational point of view, but also from a normative one. In this sense, we could see a reversal of what has happened so far: the cooperative model would no longer be a model flattened by the rules laid down for exclusively profit-making companies, but on the contrary, a virtuous model, also from a regulatory point of view.

Vincenzo Antonini

Insights:

Beuthien V., Genossenschaftsgesetz, 16. Aufl., München, 2018, § 1.

Bonfante G., The cooperative society, in Trattato di diritto commerciale, directeed by G. Cottino, vol. V, t. 3, Padova, 2014.

Ferrarini G., Corporate Purpose and Sustainability, Working Paper, EUSFiL Research Working Paper Series, 2020/1 (December 2020).

International Labour Organization, Annual Report 2017, available at https://www.ilo.org/wcmsp5/groups/public/ed_emp/documents/publication/wcms_618853.pdf.