The Social Solidarity Economy as a Strategy to Mitigate the Climate Crisis


The climate crisis is caused by an  economic system geared to ever-rising production and consumption. More production of goods and services leads to more impacts on the environment: more extraction of resources and more pollution, including emissions of more greenhouse gases.  In addition, the current globalized economy, transporting as it does massive volumes of goods across continents,  adds considerably to these problems:  directly by burning fossil fuels during transport and indirectly  by building transport infrastructures (more and more roads, airports, etc.). Social Solidarity Economy can mitigate the climate change because of certain inherent features of its practices.

Planet Over Profit

The problem with the mainstream capitalist  enterprise 

The climate crisis is caused by an  economic system geared to ever-rising production and consumption. More production of  goods and services  leads to more impacts on the environment:  more extraction of resources and more pollution, including emissions of more  greenhouse  gases.  In addition,  the current globalized economy, transporting  as it does massive volumes of goods across continents,  adds considerably to these problems:  directly by burning fossil fuels during transport and indirectly  by building transport infrastructures (more and more roads, airports, etc.).      

An important player in this process is the capitalist firm, typically a joint-stock company.  The goal of such a firm is increasing shareholder value or, in other words, accumulation of capital. Its success is therefore  measured by its financial profits, whether or not these profits have been made at the expense of nature, climate or  human communities. To capture an ever- larger share of the market, such a  firm  is expected to grow in terms of the volume of its production  and of  its assets  (e.g. number of factory buildings).  This is called "the growth imperative". A capitalist firm  is also expected to expand its operations to other countries. All this without regard for the impacts of its growth and expansion on the environment and on local communities. Neither is such a firm typically concerned with the true usefulness and quality of its products. On the contrary, it often employs advertising to make a spurious product or service appear necessary and indeed indispensable. The important thing is, from the perspective of the capitalist firm, for demand to be created, i.e. for consumers to buy it.  From the perspective of the planet, such an approach is wasteful and irrational. 

While spurious products are often created, real needs in capitalist markets often remain unmet. This is because many people are not in a position to pay for the goods or services that they really need. This leads to calls for more growth, so that the wealth that firms generate may somehow "trickle down" and poverty may grow less. However, this seldom happens in practice, as the discrepancy betwen the rich and the poor continues to widen in  mainstream economies. 

All these characteristics make the capitalist firm (driving as it does economic growth, economic globalization, and wasteful production) a key factor of environmental decline and climate change.

Social solidarity economy as a pathway to a cooler and greener planet

The Social and Solidarity Economy (SSE), on the other hand, is much less predatory towards nature,  and substantially less destructive towards the climate system. Why is this? The reasons are several:  

1.  Other-than-profit goals: While a typical capitalist firm aims at financial profit as its main goal, the social and solidarity economy has other goals besides profit. These can be social, such as social inclusion or care for the elderly, cultural, such as book publishing or a community theatre, financial, such as a mutual savings and credit institution, or environmental, such as recycling, reusing, or organic growing.  Very often, the SSE serves its members or a specific group of people, or a place - perhaps caring for its natural or cultural heritage. Its activities, products and services serve real needs and often find ways of serving groups who would not be able to access a service on the market.  When real needs are met, true wealth (in the sphere of community, culture and environment) is created, and the political and economic pressure on more economic growth (to satisfy unmet needs) is less. At the same time, as the SSE does not need to make a profit at all costs, it can be more sensitive to the  possible negative impacts of its activities. Such negative impacts are the hidden costs that nature, workers or human communities "pay" when a firm tries too hard to enhance its "efficiency", for example by using cheap labour, shedding labour in favour of automation, or expanding to countries with low environmental protection standards.

2. Democratic governance and equitable profit and risk distribution: As opposed to mainstream firms, SSE enterprises usually do not have shareholders. Their structure is therefore not of the one-dollar-one-vote type, where the more you own of the company shares, the more votes and the more power you have to decide about its activities and strategies.  Instead, SSE enterprises tend to have a one-member-one-vote structure: members share equally and directly in decision-making, or democratically elect representatives into a decision-making body. Democratic governance is closely aligned with autonomous ownership: in many SSE projects, those who work in the enterprise are also its owners. 

Such a democratic and autonomous ownership structure has many implications. In a SSE, members or workers are not controlled by owners and bosses. Instead, they themselves chart the progress and decide about the workings and aims of their organisation. This changes the way people feel and think about themselves and their work. They feel more in control of their lives and their work is more fulfilling: it often fulfills their needs for meaning, for recognition, and creativity. This makes them less prone to consumer lifestyles, which often use shopping to artificially satisfy such needs. This is also good news for the environment. 

Members of a SSE typically do not expect to receive dividends automatically at the end of the year.  The decision on how to use the profit created (or surplus, as it is often called in line with Marxian teachings) is taken democratically by members. It can be distributed to members, perhaps depending on how much work they contributed during the year. But it can also be used to replenish the communities and natural resources  which enabled the wealth to be created in the first place. It can be used in solidarity to support other nascent projects of the SSE, in order to strengthen the movement (or it can be used of course for further  development and growth of the SSE, and we shall discuss this dimension below). Profit is thus often put to good use, including the support of natural  systems which we all depend on. Money here becomes a "servant" rather than a "master". The fact that in a SSE, profits are not ploughed back automatically into dividends for investors (which is the case in a typical capitalist firm) is also good news for a cooler and greener planet:  It puts a brake on the accumulation of capital (where normally investors reap a profit and invest this in new, perhaps problematic projects, reap a profit again, invest again, etc.) an thus on the destruction of the planet  by further and further, often senseless, "development". In addition, by distributing profits equitably, the entities in SSE contribute to social equity, and this again leads to a diminished imperative for economic growth.  

3. A different perspective on fundamental economic sectors: The principle of equity and solidarity, which is a key characteristic of the SSE, is especially important in the sector of food and agriculture. Today, small family farms are very important in terms of maintaining biodiversity, cultural diversity, genetic diversity, employment, food security and local know-how. Despite the environmental importance of small farms, their numbers are steadily eroding for a variety of socio-economic reasons. The situation is even more difficult for small organic farms, which are more labour-intensive. This raises their costs and makes their survival more difficult. Many SSE entities maintain links with small local organic farmers, sharing the risks they face (such as bad weather or drought, pests etc., which may lessen their yields) and offering advance payments and a stable demand for their products.  Support for small family farms and small organic farms is a crucial activity of SSE networks. From a perspective of a globally warming world, direct community-farm-links and more generally agroecological practices within the SSE are crucial for food security (where local know-how and genetic diverstiy are important ingredients) and for agricultural resilience in the face of expected mounting global socio-economic disruptions. Another key area where SEE enterprises are very much needed is the mutual savings and credit  sector, and the sector of social banking. Mainstream banking fuels economic growth and climate change in many ways, not least by investing in often environmentally harmful activities. SSE banking and credit institutions help to channel money in more benign directions, mitigating the negative environmental impacts of investment.

4. A different stance towards the imperative of economic growth: As opposed to mainstream capitalist firms, SSE organisations are not obliged to grow in order to maximize shareholder profits. This is due to their other-than-profit goals, as discussed above, and also to their organisational structure: many are organised as co-operatives, and in co-operatives, the value of shares typically does not grow with the value of the enterprise. SSE entities are therefore as a rule not subject to the growth imperative, which we described above, and which is one of the factors driving climate change and environmental decline. If a SSE initiative does decide to expand its operations, it is probably not because it needs to grow at all costs. However, many SSE do not wish to grow beyond a certain limit. Often this has to do with concerns with accountability of members and with their commitment: both are harder to maintain when the initiative grows and the personal ties between members loosen. Rather than growing beyond a certain size, a SSE project can decide to support spin-offs: new small replications of itself, or other projects of a similar type, which share its mission and retain the advantages of small-scale. Another alternative to the growth of one group or organisation is something that SSE theorist Peter Utting has called "transversality". Transversality occurs when SSEs expand across sectors, create second- and third-tier organisations, intermediary organisations and networks, enabling a meaningful mutual dialogue, co-ordination and communication with the public sector on issues such as finance and legislation. Such an emerging economic landscape of small, locally rooted, networked and co-operating SSE entities may be more resilient and dependable in the face of systemic disruptions caused by climate change than large, footloose and competing capitalist firms, limited by the bottom-line imperative.      

5. Localization and rootedness in place and time: Many SSE groups start out as grass-roots organisations with the goal of addressing a local issue. In addition, many have a co-operative (or similar) structure, and this means that equity shares in the enterprise are not transferrable: the owner-member cannot usually directly sell his or her share on to somebody else. This precludes speculation and encourages long-term membership. Members of SSE organisations therefore, for many reasons, tend to have a strong and long-term commitment to their local area. In other words, they are rooted in place. They are also often "rooted in time": considering the long-term implications of their work and the future of "their" place and community (as well as respect to its past) are key in their decision-making. And an important aspect of the work of many SSE is "re-localization": a tendency to shorten the links between comsumers and producers, to rebuild local communities and their economies and to close loops in flows of local materials and energy. Commitment to place, rootedness in time and re-localization have many positive implications for both mitigation of and adaptation to climate change. For example, more localised economic, material and energy flows are less wasteful (mitigation of climate change) and can contribute to resilience in the face of disrupting events (adaptation to climate change). So can more cohesive and vibrant communities. And attention to the long-term and complex impacts of economic decisions is a key feature of  environmental sustainability. 


The conclusion is clear: to stabilise the climate and limit the destruction of our natural environment, we must support the emergence of social solidarity economic projects, as well as their intermediary organisations and networks. They are an important part of the socio-ecological transformation needed to counter climate change and environmental destruction.