Revista de economía mundial 67, 2024, 175-195

ISSN: 1576-0162

DOI: http://dx.doi.org/10.33776/rem.vi67.8095

Social Economy EntitiES aS KEy actorS to achiEvE

SuStainablE DEvElopmEnt GoalS: an ExamplE

Las entidades de economía sociaL como actores cLave para

aLcanzar Los objetivos de desarroLLo sostenibLe: un ejempLo

Sofía Arana

Universidad del País Vasco

soﬁa.arana@ehu.eus

Recibido: diciembre 2023; aceptado: marzo 2024

abStract

The 2030 Agenda and the Cop 28 Dubai Declaration call for immediate

action not only to signatory States, but also to sub-states, municipalities

and different private actors, as only a private–public collaboration can help

us achieve the various United Nations Sustainable Development Goals and a

carbon free world by 2050. Among private entities, we highlight the important

leading role Social Economy entities can play for the attainment of different

2030 Agenda targets. We provide an example of non-proﬁt Social Economy

entities as regards a speciﬁc target.

Keywords: Sustainable Development Goals, public–private collaboration,

Social Economy entities, Next Generation Funds, taxation.

rESumEn

La Agenda 2030 y la Declaración de Dubai de la Cop 28 exigen la adopción

de medidas no sólo a los países ﬁrmantes, sino también a otros entes, también

privados, ya que sólo la colaboración público-privada puede conseguir varios

de los Objetivos de Desarrollo Sostenible y un mundo neutro en carbono para

el año 2050.

Entre las entidades privadas queremos destacar el papel de liderazgo

que juegan las entidades de Economía Social en relación a los Objetivos

de Desarrollo Sostenible y la neutralidad en carbono. Se ofrece el caso de

entidades de Economía Social sin ánimo de lucro para alcanzar una meta

especíﬁca de la Agenda 2030.

Palabras clave: Objetivos de Desarrollo Sostenible, colaboración público-

privada, entidades de Economía Social, Fondos Next Generation, ﬁscalidad.

JEL Classiﬁcation/ Clasiﬁcación JEL: E62, H23, H39, K34

Revista de economía mundial 67, 2024, 175-195

1. introDuction

The implementation of the Sustainable Development Goals (SDGs) of the

United Nations (UN) 2030 Agenda and the recent Cop 28 Dubai Declaration

present a great challenge for all of us, leaving “no one behind”. A substantial

number of policies require collaboration between private and public entities

like never before, as the involvement of all actors is the key to achieving any

goal, including the SDGs and a carbon free world (Carpi, 2008, Mazzucato,

2023).

As for Carpi, this author highlights the leading role Social Economy entities

have played most particularly at times of crises: “The most critical years (1974–

84) of the last great economic transformation of Western society provide

evidence of the counter-cyclical nature (Ben-Ner 1988) of the development of

the social economy. The comparison between the general economic trend in

this period and the evolution of the social economy, using the employment

index and the creation of ﬁrms as indicators, provides good evidence”.

Thus, the 2030 Agenda opens the door to forms of enterprises that have

proved themselves true to their values, such as Social Economy (SE) entities for

sustainable growth. (Mazzucato, 2023) emphasises the notions of challenge,

purpose and mission-drive to the heart of public policy design.

In the case of SE entities, their contribution to solving social, ecological and

economic needs has always been there, as it is intrinsic to their values, placing

human needs over capital. In this sense, (Roger et al., 2018) highlight the

hypothesis that “ a new Social Economy is emerging, corresponding more or

less closely, according to the circumstances, to the “historical” composition of

the Social Economy, being made up essentially from the same major distinctive

elements”.

For instance, in 2015, the UN issued an opinion whereby SE entities are

believed to be essential agents in carrying out environmental and business

sustainability plans. As Mendoza notes: “In the proximity ecosystems,

sustainability plays an even more important role in development, and it is there

where the social economy entities occupy a privileged place”.

As Castro et al. (2020) point out “The role of the Social Economy (SE)

in society is increasingly acknowledged by social agents and institutions,

especially in the context of the 2030 Agenda for Sustainable Development”.

There is a reason for this: the 2030 Agenda has provided indicators and their

monitoring, so that a long standing, but unseen and not properly acknowledged

178 Sofía Arana

and measured contribution on the part of SE, has now become measured,

monitored and valued thanks to the use of the 2030 Agenda indicators.

In the same manner, the protection of different forms of SE, that have

existed for a long time, investing in the common good and beneﬁting society,

has become a must in the list of public policies. The reason for this is the

recognition that SE entities play a leading role in the achievement of the

Agenda’s goals and targets, given that many of them coincide with their values

(Rixon and Duguid 2022).

Moreover, this protection and promotion of SE entities can come in the

form of public policies, such as taxation policies. However, a comprehensive

speciﬁc system still needs to be developed in the EU. As the Commission

communication Building an economy that works for people: an action plan

for the social economy states: “taxation is an important policy for the social

economy. Few countries have developed a speciﬁc and consistent taxation

framework for social enterprises. Many provide incentives ranging from

corporate tax exemptions on retained proﬁts to VAT exemptions or reduced

rates, social insurance costs reduced/covered by subsidies, or tax reductions

for private and institutional donors”. The reason for this may be that up till very

recently there have not been proper indicators for SE.

However, with the 2030 Agenda and through their non-ﬁnancial

performance reporting, SE entities can now give visibility to their contributions

by speciﬁcally reporting on their actual performance relative to the SDGs

and their sustainable growth, helping, among other policies, to drive the shift

towards a carbon free world following SDG 13 and some other SDGs.

Moreover, SE entities can consider measuring this type of performance (as

regards SDGs) in relation to the principles that support them. For instance,

co-operatives can link their SDGs to the principles that inspire them because,

frequently, both are closely interconnected (Rixon and Ruguid 2022). In this

manner, the difference they make can be highlighted and the visibility of SE

actors becomes valued or, as Paul Krugman (2023) notes in reference to

another form of SE, trade unions, “they play a big role in inequality issues”.

Thus, a demonstration of commitment by these entities to some of the

Agenda’s goals and speciﬁc targets has become more critical than ever to

achieve long-term sustainability for the planet.

Mazzucato (2023) for instance, when speaking about cooperatives, notes:

“The cooperative gets the conditions right from the start, so it doesn’t have to

correct the mess afterwards, in the form of redistribution. There is no better

model than the cooperative model. It is not a perfect model, but it is a very

interesting model for learning about when something works and when it doesn’t

work. It is a benchmark for changing the economic model”. This author argues

that the system we need to drive towards should be “a system that distributes

rewards appropriately” and this is not the case of the traditional capitalistic

companies. We would simply highlight that such “a system that distributes

rewards appropriately” has already been there for centuries and it is called

Social Economy (SE) or for some authors Social and Solidarity Economy (SSE)

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(Mendoza et al. 2020). In this paper we are going to be using the terminology

SE as indicative of both, including cooperatives, non-proﬁt associations, mutual

societies, foundations and other possible social enterprises wherever these are

identiﬁed as such in the legislation in force.

Therefore, it should be highlighted that even though the State, regions or

local authorities have taken the accolades, they have not been the sole makers

of social welfare as SE entities have been developing social and environmental

policies for a very long time. The role of SE entities have played means that

many lives have beneﬁted from the social welfare they have always provided,

as SE puts people at the centre, pursuing general interest objectives, which

would otherwise be the public authorities responsibility.

In this manner, the role of SE entities needs to be properly addressed.

Thanks to the study of the SE that pushed for indicators and the indicators

of the 2030 Agenda, this contribution can now be properly measured and

valued.

In the EU, the Liège Roadmap for Social Economy in the European Union,

has recently called on the Commission and on the Council to “ensure that

taxation systems do not hinder the development of the social economy and

assess whether tax systems sufﬁciently encourage its development”.

The purpose of this paper is to help give visibility to the leading role Social

Economy entities have been playing for a very long time without a proper

recognition. The fact that with the 2030 Agenda some indicators are set helps

the acknowledgement and measurement of their contribution now. We will

portray the case of a very important SDG (12.3,) to see how non-lucrative

Social Economy entities are most instrumental for its achievement. Moreover,

the achievement of this target also helps achieve many other SDGs, such as

SDGs 2, 3, 5, 10, 13, 14 and 15. Therefore, SE entities are a central piece to

achieving many of the goals of the 2030 Agenda.

Last, but not least, we will examine tax policies as regards this SDG in a

chosen country, Spain, as their adequate design is of the outmost importance

to achieve this aim.

2. rESEarch mEthoDoloGy

Social Economy entities are key, and have always been most instrumental

without a proper recognition, for the attainment of different Sustainable

Development Goals of the 2030 Agenda and the achievement of a carbon

free world in 2050. In order to prove this point, ﬁrst, from a methodological

point of view, the study stems from the importance of measurement and the

indicators that have come with the 2030 Agenda, as it has helped measure

and therefore, acknowledge the contribution of Social Economy entities to

different SDGs and targets.

Second, we dedicate a space to highlighting the importance of private-

public collaborations, as the involvement of all actors is the key to achieving

180 Sofía Arana

any goal, including the SDGs and a carbon free world (Carpi, 2008, Mazzucato,

2023).

Furthermore, from a mixed methodological approach, we set the example

of the Next Generation Funds, as this line of credit and aids can be regarded

as an extremely effective enabler for the success of public policies concerning

SDGs and a carbon-free world by 2050. The Next Generation program can be

regarded as a very good example of the form of a mission and public-private

collaboration, both under a quantitative and a qualitative perspective.

Furthermore, as regards the methodological choices, another choice that

has been made is that of a case study. As Arana and Laskurain state, this type

of methodology allows the phenomenon to be analysed in its real context,

considering all aspects of the problem, and using multiple sources of evidence,

quantitative and/or qualitative simultaneously: “Case study research allows the

use of either qualitative data exclusively or quantitative data exclusively, or

even both”. Moreover, it is possible to combine qualitative and quantitative

methods so that a set of hypotheses can be generated from the application of

qualitative instruments and then tested quantitatively, which is the example of

the Next Generation Funds.

However, after setting the example of the Next Generation Program, our

case study can be considered to follow a qualitative approach, as qualitative

techniques and methodologies have been used in this research for several

reasons. The use of a qualitative point of view, allows for a considerable increase

in knowledge about public policies, most particularly tax policies, in relation to

the donation of all sorts of products. Among all of them, the case study focuses

in the Spanish tax system allowing for the generation of a very speciﬁc idea,

leading to conclusions that could be exported to other jurisdictions.

This way, the overall framework, the whole picture, within which the research

is carried out, is seen before delving into the case study of public policies,

mostly tax policies, in order to help achieve target 12.3 of the 2030 Agenda as

regards the donation of food products to non-proﬁt Social Economy entities in

the case of Spanish legislation. The results can be born in mind not only by the

Spanish legislator, that could speciﬁcally correct the possible negative effects

of the new provision, but also by other legislators in the EU that could avoid

the same issue in advance.

As the VAT Directive is obviously common for all EU countries and similar

Corporate and Personal Income Tax measures in order to promote the

donation of products to non-proﬁt Social Economy entities exist in other EU

Member States, our case study can be an aid in order to avoid this issue in

other jurisdictions. Therefore, a systematic interpretation of the new measures

needs to be followed before adopting them.

Moreover, not only we consider that this case contributes to the research

in target 12.3 of the SDGs 2030 Agenda by analysing the adoption of public

policies, most of them in the form of tax measures, concerning the donation

of food products to non-proﬁt Social Economy Entities, but also it can help

donors and non-proﬁt SE entities too.

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The purpose of the paper is achieved by identifying the aspects that can

result as facilitators or barriers when connected to other tax measures in the

system to promote SE, following a systematic approach. We even ﬁnd that

measures that may seem to have been devised to act as facilitators, when

delved into using a systematic approach, end up acting as possible barriers to

the donation of food products to non-proﬁt Social Economy entities, because

of the inﬂuence they may pose in other measures. This experience is not only

relevant for countries, but also for the companies that will donate food to

non-proﬁt SE entities and even for other possible product donations to such

entities, such as clothes, medicines, etc. and to the grantees themselves (SE

entities such as food banks and soup kitchens).

Therefore, our case study can be considered to be illustrative and relevant

as an exploratory analysis of an under-researched issue where diverse agents

and actors play a role with a direct impact on the attainment of target 12.3 of

the 2030 Agenda. The goal is for the effect to be symbiotic. Thus, with this case

study, we also make a point of the importance of a systematic interpretation as

regards taxation in order to check whether the symbiotic effect is such, seeing

that it could easily be improved.

This paper ﬁnishes with a single case study of the new legislation passed

in Spain as regards VAT and its outcome regarding the negative effect, instead

of the foreseen symbiotic effect, in other taxes in relation to the donations of

food products to non-proﬁt Social Economy entities and its own conclusions.

3. thE importancE of mEaSurEmEnt

Measurement is crucial. A fact that may be of help to SE in a medium term

is a new tendency in the EU called “social outcome contracting”. We ﬁnd that

this type of contracting can be suitable to SE entities because bearing in mind

the social outcome is at the core of the values that inspire them.

fiGurE 1: mEthoDoloGy.

Source: Own elaboration

182 Sofía Arana

“Social outcome contracting”, means contracting and paying for certain

outcomes, designed with a conditionality, rather than activities (outputs). Very

often this conditionality is based on a social outcome and this is where SE

entities can play an important role, as being social is inherent to their values.

This concept of “social outcome contracting” has contributed to interest

in measurement methodologies bearing in mind the social outcome. Even

though this new concept is in line with SE, there is still no indicator database

for social impact that can be used by investors and SE organisations whereby

the indicators are common to SE entities1.

The difﬁculties in ﬁnding a “one-size-ﬁts-all” tool are clear, as within SE

there is a diversity of social needs, interventions, etc. The fact that the SE

concept itself differs strongly between Member States, with different degrees

of recognition and public policies, is clearly an obstacle.

Moreover, in the EU, all the Member States have tax policies to protect

SE entities. However, these vary in terms of development, characteristics and

form, according to their own legislations.

However, regarding the implementation of the 2030 Agenda in the EU, it has

already provided valid indicators and this can help measure SE’s contribution.

These new indicators are crucial as the targets need to be measured for

them to be accomplished. They may also help measure the performance and

contribution of private entities for SDGs. They could also be delved into in

order to check if, in some instances, they could be of use for the measurement

of “social outcome contracting”.

As regards the indicators used in the EU, the so called “SDG indicator set”

is reviewed on an annual basis. As for the indicators for the 2022 report, they

were reviewed to align with the 8th Environment Action Programme and the

new targets of the European Pillar of Social Rights Action Plan. Therefore, these

instruments can ultimately be said to form an ecosystem in which helping

attain one helps to achieve the others.

Moreover, the contribution of the SE, hidden for a very long time, has now

surfaced and is being valued precisely because of the use of these indicators.

In this manner, it is clear that the 2030 Agenda has an extremely positive

inﬂuence in the SE sector, helping with its visibility and acknowledgement.

Thus, States, sub-states, municipalities and other forms of public

organisation should implement their Agenda and public policies, bearing in

mind the private and SE entities who are willing to help achieve the goals.

1 See 6 SWD (2021) 351 ﬁnal, Single Market Report. The estimations for this ecosystem give a

limited picture of the SE because (i) they are based on aggregated NACE code analysis and (ii) parts

of the social economy are captured in other ecosystems with limited data available in Structural

Business Statistics. See European Commission (2020), A map of Social Enterprises and their

ecosystems in Europe, Comparative synthesis report 2020: “The degree of acceptance of the social

enterprise concept varies to a signiﬁcant extent across countries depending on the relevance of

the phenomenon, space of development of social enterprises and existence of other similar and/or

bordering concepts”.

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To achieve the implementation of the SDGs and the public regulation

promoting public policies that help private and SE entities achieve Agenda

2030 targets, setting the basis for a stronger public–private collaboration, it is

necessary to provide the necessary funds and investing in circularity, which is

an investment in the future.

In the context of the European Union (EU), the European Action Plan for the

Social Economy, with thirty-eight measures to promote it in the EU, can also

help the EU make progress regarding the SDGs2.

4. public policiES to promotE privatE EntitiES to hElp achiEvE thE tarGEtS of thE

2030 aGEnDa

To begin, we need to deﬁne what we mean by “public policy”. It can be

deﬁned as follows: “the course of action or inaction taken by government with

regard to a particular issue or set of issues (Vaillancourt, 2009)”. Therefore,

the concept of public policy encompasses economic, social and environmental

policies, which share most of its characteristics. Vaillancourt also focuses on

the contribution of the social economy to the democratization of the State and

of public policy by making use of the distinction between the concepts of co-

production and co-construction.

Public policies are necessary because governments, regional authorities

and municipalities must take action to ﬁx problems, such as those created by

the previous inaction against climate change and an unfair capitalistic system

that grows in a socially and environmentally unsustainable manner. Regulatory

change is essential if we are to achieve or even move in the right direction

to achieve the SDGs and a carbon free world. As Krugman (2023) highlights

regarding climate change: “ultimately the government is going to have to take

the lead”.

Therefore, the ﬁrst step is that governments should set public policies in the

right direction, which is that of the 2030 Agenda.

As we can see, public policies include different policy types. We can include

among these policies regarding SDGs and speciﬁc targets. Thus, making this

mission their own, States, regional authorities or municipalities attempt to set

the arena with the necessary instruments for the policies to be successful.

However, getting it right from the very beginning becomes crucial, as it is not

only a question of adopting public policies, but of getting the right public

policies to achieve or even come closer to SDGs.

This intervention by different administrations may take a wide variety

of forms, including legislation, policy statements, white papers, social and

ﬁscal measures, or public–private collaborations. Without State, regional or

municipal intervention, there is no public policy. However, it must be noted

that, in the case of the 2030 Agenda, it is not possible to rely solely on state,

2 On 9 December 2021, the European Commission adopted this new action plan on the Social

Economy. It states the need for inversion in SE entities and their visibility.

184 Sofía Arana

regional or local intervention without the collaboration of private entities as the

accomplishment of the Agenda is a common task.

Therefore, shaping public policies involves different actors such as

individuals, interest groups, entities, etc. Setting the targets comes ﬁrst, setting

the indicators comes second, and the next logical third step to promote the

attainment of the targets is setting incentives through public policies. In the EU,

the Next Generation Funds represent a signiﬁcant ﬁnancial incentive to move

in the right direction.

These funds are needed as the 2022 data on the accomplishment of

SDGs in the EU are still not promising3. However, it should be noted that the

EU reports much stronger achievements than other places. Furthermore, its

mission is to have a carbon-free EU by 2050, coinciding with the Cop 28 Dubai

Declaration.

5. thE nExt GEnEration funD for a fair tranSition aS an EnablEr for thE SuccESS

of public policiES concErninG SDGS anD a carbon-frEE worlD by 2050

The Next Generation programme is regarded as a genuine “mission” to

change the EU, modernise it, and make it greener and digitalised, leading the

way to a carbon free world by 20504.

As Mariana Mazzucato (2014) explains: “in innovation, the State not only

‘crowds in’ business investment but also ‘dynamizes it in’ – creating the vision,

the mission and the plan”. Furthermore, President of the European Commission

Ursula Von der Leyen referred to Apollo 11, the mission of sending the man

to the moon, when launching these funds. (Manfredi, 2021) also underlines

the wisdom of considering the form of mission as “the mission is the most

appropriate planning instrument”.

In the words of the same author, the mission “consists of the orientation

of public activities (investments, prices, administrative law, management

controls, regulatory laboratories) and private activities (creativity, social

initiative, private ﬁnancing, third sector, entrepreneurs) for the achievement of a

transforming project with an innovative proﬁle. Mission planning is inspirational

and ambitious, because it aims at changing public policies to achieve social

impact. The mission is a ﬂexible instrument, it is not an end in itself”.

The Next Generation funds can be regarded as an opportunity for public–

private partnerships, including SE entities, which must be properly managed.

It is a question of public money, in particular, contributing through private

3 The ﬁgures have been extracted from the Eurostat Report (2022) that monitors progress towards

the SDGs. This report considers that signiﬁcant progress can only be seen in ﬁve out of the 17 SDGs.

Those SDGS are the following: SDG1 (End poverty and social exclusion), SDG8 (Decent work and

economic growth), SDG9 (Industry, innovation and infrastructure), SDG16 (Sustainable development

infrastructure), SDG16 (Peace, justice and strong institutions), and SDG7 (Affordable and clean

energy).

4 The Cop 28 has recently accepted this goal by 2050.

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entities (and most particularly SE ones) to the development of projects. Thus,

public–private collaboration is the chosen method to promote such projects.

This goes against what we are used to, working in silos and minding our own

businesses. The forms this takes are projects, subsidies and loans. This will

most likely result, in the medium or long term, in the achievement of many

SDGs by the EU as the mission is mainly focused on a social, green and digital

transition that leaves no one behind. This transformation is far from easy and

serious obstacles may lie in the way of the effective and efﬁcient management

of these funds.

Once the funds are transferred to the Member States, they have to approve

their own Strategic Plans for Economic Recovery and Transformation, which

is a way of making States part of the mission. Within States, the funds are

usually managed jointly with sub-central entities that involve themselves in

the mission. Finally, the projects are for public and private entities that make

the mission their own in very speciﬁc targets. Importantly, the projects usually

call for a joint effort, a collaboration among different entities that may never

have worked together but that could work together to get further. In these joint

projects there is usually a requirement to include small- and medium-sized

enterprises and it is usually here that SE entities can help join the team and

show a different way of doing things. It should be added, as Mazzucato (2014)

notes that the relationship between the State and the private and Third Sector

needs to be symbiotic rather than parasitic. For this purpose, SE values are

at the core of SE entities, giving back to the places where they are located: to

members, to workers, to the environment. In this manner, their role can help

build a true eco-social system and a public–private collaboration is efﬁciently

managed to achieve the mission that partly coincides with the Agenda’s targets.

Moreover, the fact that there is a “Do No Signiﬁcant Harm” (DNSH)

declaration for all projects means that they will help the EU grow in the

right direction in a more sustainable manner. The DNSH is the minimum

acceptable level of compromise with the environment for any project, avoiding

greenwashing5. In the EU, the Taxonomy Regulation deﬁnes a higher level

(substantial contribution) and a minimum acceptable level (no signiﬁcant harm)

to direct and motivate investments to make contributions that are not limited

to “green posturing”.

Thus, this principle becomes a fundamental one of direct application in the

law of EU Member States and we will get used to including it in our regulations.

In fact, all projects with Next Generation or other types of EU funds include the

requirement of a DNSH declaration, meaning that the project in question will

not cause signiﬁcant damage to the environment.

It is not the purpose of this paper to study the system in the USA. That has

already been done by Broad Leib, 2016 and more recently and Arana Landín,

5 In the EU, the Taxonomy Regulation deﬁnes a higher level (substantial contribution) and a minimum

acceptable level (no signiﬁcant harm) to direct and motivate investments to make contributions that

are not limited to “green posturing”.

186 Sofía Arana

2024. However, it needs to be highlighted that a similar program was approved

thanks to the Inﬂation Reduction Plan, so the need for the change and the

means are also there to achieve a carbon free world by 2050. Thus, after the

new Dubai Cop 28 Declaration it can be regarded as a worldwide shift.

Moreover, the 1996 Bill Emerson Good Samaritan Food Donation Act

provides an exemption from liability to food donors and non-proﬁt organizations

that distribute food as long as they as they donate food that is apparently in a

good state in “good faith” and do not act with intentional misconduct or gross

negligence.

As stated by Arana- Landin, 2024, when studying the main differences

between food hierarchy policies and donations to non-proﬁt SE entities such as

food banks or soup kitchens, this public policy that exists in the USA regarding

the donation of food products to SE entities could be useful to export to the

EU, as liability in the cases of donation of food products that have been done

in good faith to SE entities in the EU may be acting as a deterrent. As Arana-

Landin puts it: “one of the most notable differences between public policies

in the United States and in the EU is as follows. Whereas the ﬁrst excludes

donations done in good faith from liability, the second does not. This hinders

food donations in the EU compared with the United States. Therefore, in the EU,

to begin with, the obstacle of liability requires revision as it is the main cause of

concern for many potential food donors such as food manufacturers, retailers,

and wholesalers (Food Waste Reduction Alliance, 2012). If private entities want

to donate adequate food products, acting in good faith, they need to be exempt

from possible liability.”

6. thE ExamplE of tarGEt 12.3 of thE 2030 aGEnDa anD thE rolE SE EntitiES

play in itS achiEvEmEnt

We now proceed by giving a speciﬁc example of a target in the 2030

Agenda that can help attain several SDGs and show the important role non-

proﬁt SE entities are to play in its achievement. We have selected this target

because achieving it should be a major cause of concern for all manner of

social, environmental and health reasons. Moreover, the Cop 28 has insisted in

the crucial role the reduction of food losses and waste also plays for achieving

a carbon free world.

We cannot afford to be this inefﬁcient as regards something as basic for

human life as food. Moreover, it is not only an evident question of extreme

inequality and danger of famine; food loss and food waste also damage the

ecosystem and its resilience in the long term.

Furthermore, food losses and waste jeopardise the achievement of several

SDGs in the 2030 Agenda and the Dubai Declaration’s success. Food losses

and waste have a direct impact in greenhouse gases, as whenever food rots in

a landﬁll it causes methane, which is an even more potent than carbon dioxide

greenhouse gas. Moreover, whenever food is wasted, all the energy and water

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required for it to grow, harvest, transport and be placed in the market is wasted

too.

SDG number 12 proceeds as follows: “responsible consumption and

production”. Among its targets, we ﬁnd target 12.3, which is described as

follows: “By 2030, halve per capita global food waste at the retail and consumer

levels and reduce food losses along production and supply chains, including

post-harvest losses”.

The food system must be sustainable and it is a major issue that it is still not

as, according to the report by the UN Food and Agriculture Organization (FAO)

on food loss and waste, approximately one-third of all food produced in the

world is lost or wasted (FAO, FIDA, OMS, PMA y UNICEF, 2022). This means

we are following practices that not only result in poor health and deaths for

too many people, but that they are also environmentally destructive policies

as when food becomes waste it causes greenhouse emissions. Moreover,

producing food that is not going to be consumed contributes to deforestation

and hydric losses.

Regarding the USA, 40% of the food produced in this country becomes

waste. According to Broad Leib, 2016, this results in 62.5 million tons of

wasted food each year and this has been rising for several decades.

Therefore, achieving target 12.3 is a signiﬁcant challenge as it is an

inefﬁciency with an extremely high impact on several SDGs, (i.e. SDG 2, zero

hunger, although it is also considered essential for the achievement of others,

such as SDG3, health and well-being; SDG5, quality education; SDG10,

reducing inequalities; SDG12, responsible production and consumption;

SDG13, climate action; SDG14, underwater life (as it affects ﬁsh); and SDG15,

terrestrial life and ecosystems). At the same time, it is a goal of responsible

consumption and production, so its circularity measures to avoid waste can

most certainly make a difference.

Even though we speak of food loss and food waste, the terms refer to

different phases in the food chain. Food loss occurs within the production or

primary cycle in its ﬁrst phases before marketing, whereas food waste occurs

from the marketing of food onwards, including waste generated in households.

The FAO is the organisation responsible for monitoring “food loss” at

the global level and does so through the Agenda 2030, 12.3.1 indicator. It

includes food losses in planting, harvesting, storage, transport, distribution,

processing and packaging, before the food product reaches the commercial

sector (Flanagan et al.2019)6.

For the purpose of monitoring food loss, the FAO has designed a voluntary

Code of Conduct, which is addressed to national and sub-state authorities in

6 To this must be added the observations of Flanagan, Katie, Robertson, Kai and Hanson, Craig

(2019), Reducing food loss and waste : https://web.archive.org/web/20211117130643id_/https://

wriorg.s3.amazonaws.com/s3fspublic/reducing-food-loss-waste-global-action-agenda_0.pdf, who

understand that, although exact data are not available, there is also a signiﬁcant loss of food in the

phases prior to harvest, capture or slaughter and in the course of harvest, capture or slaughter that

is difﬁcult to incorporate into statistics.

188 Sofía Arana

each country, different agents in the food supply chain, the private sector,

producers’ organisations, civil society, etc. Therefore, this is a task where

collaboration among different actors, private and public, becomes a must, as

public– private collaboration can also be the key to reducing food loss and

waste. We must highlight the role agricultural, farm and ﬁsh cooperatives can

play at this stage, for instance with the food that is not going to be recollected

for different reasons or the left-overs, as well as other forms of SE entities such

as sea guilds.

As for “food waste”, the new United Nations Environment Programme

(UNEP) is in charge of its measurement through the 12.3.2. indicator. This

gives us an idea of the importance food waste also has for the environment.

This indicator measures food waste at the next stage, from the time food

reaches the commercial sector, understanding such waste as those agricultural

and food products discarded from the food chain that are still perfectly edible

and suitable for human consumption and which, in the absence of possible

alternative uses, end up discarded as waste. Consumer cooperatives are an

instance of possible agents in this phase.

5.1. thE rolE non-lucrativE Social Economy EntitiES play in rEachinG thiS tarGEt

In the EU, there is an “after” and a “before” thanks to the “Farm to fork

strategy” which is within the European Green Deal as regards food loss and

waste. From this strategy onwards, more concrete measures are being adopted,

such as Delegated Decision 2019/1597 EC, which establishes that, as of 2022,

Member States are obliged to report on food waste reduction efforts in relation

to the base year 2020. It is estimated that The food wasted would be sufﬁcient

to feed 2,000,000,000 people; The water footprint is estimated around

250,000 million cubic meters of water per year; as for the carbon footprint,

it is around 3.3 billion tons of CO2 per year; as regards deforestation, 1.82

million hectares are deforested yearly pertaining to food loss and waste.

Therefore, it is crucial to measure and report the data, as to do so, Member

States need to measure food loss and waste and implement their own policies

to halve it. This is an initial step in making Member States adopt the right

public policies to reduce it, adopting this requirement as if it were their own.

Our structures of the supply chain are extremely inefﬁcient so measures

need to be taken within the different steps of the food chain to minimise food

loss and waste and redirect the excesses. An efﬁcient and easy solution for

this purpose is to promote food donations to SE non-lucrative entities such

as associations and foundations (food banks and soup kitchens are probably

the best known ones but many others can help, such as those providing food

to immigrants at immigration camps). However, this easy solution requires the

collaboration of public and private entities to work.

Therefore, food donations to food recovery organisations and SE non-

lucrative entities, such as soup kitchens of food banks, are a simple solution to

overcoming food loss and waste (Santos et al., 2022). Therefore, ﬁscal policies

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regarding food loss and waste to this type of organisation should be valued

in the light of target 12.3, bearing in mind that these entities are fulﬁlling a

task that is really everybody’s responsibility, but mostly the State’s, regional

or municipal authority’s responsibility. Therefore, these bodies clearly need to

lead the way in adopting public policies in the right direction as a collective

mission if they want private entities to donate the food and non-lucrative SE

entities to distribute it help achieve the target.

5.2. tax mEaSurES to promotE fooD DonationS to SE non-lucrativE EntitiES

Regarding ﬁscal policies, tax beneﬁts in personal or corporate income tax

can help overcome several costs for food donors to this type of non-lucrative

organisation, helping them to achieve their social purpose and achieving

important social and environmental targets by the simple use of a measure to

avoid waste.

However, these donations of food products to SE non-lucrative entities

should not carry more costs to donors, such as the cost of storage or transport,

particularly in the cases where food requires refrigeration. It should be born

in mind that transport, particularly in the case of refrigerated food, can have a

very important added cost for donors. This cost cannot be on food donors as

it would obviously be economically an important deterrent, and it cannot be

on non-lucrative entities as they do not have the means to achieve that end.

There therefore needs to be a sufﬁciently important tax beneﬁt for donors to

compensate these costs if they are placed on them. In any case, public means

should be used for this purpose, either directly or indirectly. This is the reason

why there is a need for a public policy that helps private entities and SE non-

lucrative entities achieve the goal together.

In this sense, the possible donation of services, not always contemplated in

legislation, also needs to be borne in mind as regards the tax beneﬁt (Arana-

Landin, 2024). For instance, a transportation company and food delivery

company may want to join forces against food loss and waste, providing

transportation services, if they are to enjoy the tax beneﬁts. These services

are not always considered as regards donations; therefore, a legislative effort

needs to be undertaken to include them.

In this manner, public entities need to legislate to promote this public–

private collaboration to achieve the target.

The State, region or municipality alone cannot comply with this task and

if it requires food donors and non-lucrative SE entities to help achieve the

target then it must begin by setting the right public policies, among them ﬁscal

policies, to achieve the goal.

A widespread problem caused by tax laws that include tax beneﬁts

worldwide is tax caps or tax limits that end up diminishing the tax beneﬁts;

therefore, those should also be revised bearing in mind the importance of the

target and the need for food donors and SE entities to be able to accomplish

their target (Broad Leib, 2016).

190 Sofía Arana

Moreover, the system should be devised as one, bearing in mind that one

beneﬁt in one tax should not have negative effects on others, as we will see.

6. thE caSE of vat in thE Eu aS rEGarDS fooD DonationS: a SurmountablE obStaclE

Food donors can face an extremely serious problem with VAT, as there is

no ﬁnal consumer paying for VAT in the case of donations to SE non-lucrative

entities. Therefore, in the case of donations, food donors sometimes need to

pay for the VAT of the donated products themselves. Therefore, VAT can be

sometimes regarded as an obstacle in cases where the market value of the

donation is considered as the taxable base for food donation.

In this sense, in the EU, articles 16 and 74 of the VAT Directive are

interpreted by some Member States as being an obstacle as food donations

have to pay VAT according to the value of the donation. In some other Member

States, the market value is considered to be zero, thus “theoretically” avoiding

the problem. I say “theoretically” because even though the problem is solved

for VAT, a zero taxable base can mean that in other taxes, such as Personal or

Corporate Income Tax, that have a beneﬁt for the donation (as a percentage of

the tax base to be deducted), these beneﬁt is overridden.

Therefore, an even better solution is for the tax rate to be zero, because

this tax rate means that the problem is solved for VAT without any negative

inﬂuence in other taxes.

Regarding these measures, Spain has recently adopted new waste

legislation for a Circular Economy that changes its previous interpretation as

regards VAT for all product donations, not only food donations, which now have

a zero taxable base and a zero rate whenever these product donations are

made to non-lucrative entities in order for them to fulﬁl their social purpose.

Such a measure is in line with the proposed target 12.3 of the 2030 Agenda.

However, the fact that there are two beneﬁts for VAT is not only reiterative,

but counter-productive, as it would have been better to have only a 0 tax rate

for VAT. This way the tax base would not be considered to be zero, so the tax

beneﬁt that can be up to a 50% deduction of the value of the tax base for

Personal and Corporate Income Tax would not become void (Arana Landin,

2024).

7. limitationS anD contributionS

This paper contributes to the research in target 12.3 of the SDGs 2030

Agenda by analysing the adoption of tax policies concerning the donation of

food to Social Economy Entities, based on the case of new changes made

by the Spanish Act 7/2022. This purpose is achieved by identifying the

aspects that can result as facilitators or barriers when connected to other tax

measures in the system to promote SE. This experience is not only relevant for

the companies that will donate food to SE entities but also for other product

donations, such as clothes, medicines, etc.

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Among the main implications of the research, the importance of

systematising the new measures, bearing in mind the whole effect they can

cause in a particular system in order to advance in the circular economy is

highlighted.

We have also revised the different roles to be played by all actors and the

necessity for the public administration to take the lead to have a tractor effect.

Regarding the limitations of the research, there is a geographical constraint, as

the system analysed in particular is that of Spain. However, we understand that

adopting measures to promote food donations need to be analysed in their

context in advance, as not doing so could have the same effect.

In our case the reiterative VAT measures to promote food donations,

taking the VAT base as zero mean, in fact, the annulment of a very good and

previously existing tax beneﬁt to promote food donations in Personal and

Corporate Income Tax.

As for future lines of research, the number of tax policies to promote food

donations is expected to grow signiﬁcantly and this research could serve as

a reference for the design of a proper system, where new measures are not

regarded as silos, but analysed in the whole legal system to achieve better

results. The is an urgent need to bear in mind the different roles that can be

played by international measures, supra-national ones, national ones, local

entities and even companies and people acting as donors as well as SE entities

fulﬁlling their goals such as soup kitchens or food banks. There needs to be

a public-private cooperation and interaction by all of them in order to avoid

negative consequences for the attainment of the SDG.

8.concluSionS

We now know that there is a real urgency to comply with the 2030 Agenda

as a goal in itself and as a means to help achieve a carbon free world by 2050.

This is a mission that can save us and the planet.

In the EU, the goal is also to be climate neutral by 2050, taking the lead.

The goal is shared by many other jurisdictions, being the strategy perfectly

aligned with several SDGs of the 2030 Agenda that need to be achieved ﬁrst,

most notably SDG12, so the attainment of the 2030 Agenda is a middle step

to be climate neutral by 2050.

In the EU, Next Generation funds have also been devised as the means

to achieve this mission. However, the only way to achieve this mission is by

collaboration. International organisations, States, regions and municipalities

cannot achieve their common goals without involving private entities, civil

society and the Third Sector. There is therefore a pressing need for public

policies that seek such collaboration, as in the Next Generation Projects, in

order to look for a symbiotic effect.

We selected a speciﬁc target of the 2030 Agenda that shows how this

collaboration can most efﬁciently help achieve it. The target is set and the

indicators are present, so it is time to measure our progress to achieve target

192 Sofía Arana

12.3 of the 2030 Agenda. This is a task to be undertaken both by public and

private entities and most particularly, non-proﬁt SE entities. However, their

being able to fulﬁl their role depends on outside constraints, such as removing

liability for food donors and giving them proper tax beneﬁts that can help them

not only remove the costs, but also be acknowledged.

Only if the public authorities set fair and adequate rules, promoting food

donations with public policies, can we reduce food loss and waste. Only if

private entities make adequate food donations to non-proﬁt Social Economy

entities, can these ones, such as food banks and soup kitchens, fulﬁl their social

goals. Only through the collaboration of everyone can we achieve a target that

gets us closer to achieving the other SDGs and a carbon free world.

However, an important deterrent to food donations can be taxation

whenever public policies are not taken to change or when they are taken in an

isolated way, without bearing in mind the whole chain and the system as such,

with all other possible beneﬁts in mind.

We ﬁnd a need to reconsider our tax system as a whole so that barriers

to food donations are overridden and adequate beneﬁts to promote food

donations to SE non-lucrative entities are adopted.

A careful consideration of the system as such shall be borne in mind, as

if, for instance, we consider the tax base for VAT purposes in the case of food

product donations to be zero, it can have a negative effect in other taxes,

such as Personal and Company Income tax that rely on that base. Therefore,

we consider a zero tax rate preferable to a zero tax base to promote food

donations to SE non-lucrative entities to avoid overriding the possible usual

beneﬁts in Personal and Company Income Taxes.

acKnowlEDGmEntS

We thank the anonymous reviewers whose comments and suggestions have

helped us improve this manuscript.

funDinG

This paper has been funded by the University of the Basque Country

group GIU 21/005 (La incidencia en el Sistema ﬁscal vasco del derecho supra-

nacional y de la Agenda 2030) and Euskampus Missions 2.0 (SOFIA Project).

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