‘It is possible to invent an investment in the capital of cooperatives’

Interview with Maud Sarda, director and co-founder of Label Emmaus

For this new edition of Both, we welcome the inspiring Maud Sarda, director, and co-founder of Label Emmaus created 7 years ago. After graduating from Edhec, Maud began her career as an information system consultant at Accenture before joining Emmaus France, the network leader of 300 structures and 30,000 actors in the field.

Since its foundation, Emmaus has had one objective: fight against all forms of exclusion and inequality in our society with the economic tool and the second hand at the service of the second chance. Within this system, Maud Sarda launched Label Emmaus, a cooperative with 60 employees, which combines business, environmental and societal impact!

Maud, can you tell us how you went from consulting to Emmaus?

It was all programmed in my mind, nothing happened by chance. I have always carried the seeds of anger within me, which are the fuel for my action to work for more social justice. I did a lot of volunteer work in the community when I was a student, as president of the humanitarian association at Edhec. When I chose Accenture, I knew that they had a foundation that was very active in skills sponsorship. So I already had in mind that after 4-5 years of good and loyal service, I would ask the Accenture foundation to send me on a skills sponsorship program in the associative world in order to create a network and switch. This is exactly what happened! For one short year, I was able to meet a lot of people, some of whom worked at Emmaus. It was love at first sight and you know the rest!

Label Emmaus confirms the link between philanthropy and business. Can you explain how this link is made? 

Emmaus is not a charity organization, it is a movement of social entrepreneurs before its time and has been doing the circular economy for 75 years now, before the term even existed! It's important to understand this in order to better understand how I created the Emmaus label, with the mindset of extending the work of Emmaus but online. 

We receive no public subsidies and very little private funding in order to maintain our freedom to welcome people with extremely chaotic backgrounds, who are often without papers or in the process of being regularized. For some of them, it is only a matter of lending a hand for a day or two, for others, it is a whole life. On this basis, we can't fit into publicly funded boxes. Furthermore, our advocacy work implies being free of any economic pressure. This implies having an economic activity. 

We are also strongly supported by the donations of the French households. However, Emmaus' work is all about recovering goods, sorting them, revaluing them and reselling them. These activities finance almost 100% of the social action and make us part of a circular approach. Second-hand work is not only environmentally friendly but it is also our social fuel. At Emmaus, we work with people. For us, circularity revolves around three pillars: the ecological, the social and the sharing of value and wealth. Label Emmaus embodies this by being a cooperative, reinvesting 100% of the profits in the work tool and also by having very tight salary differentials, from 1 to 5 in our statutes to 1 to 3 in reality.

The business is therefore necessary to run a cooperative. Can we say it is a scalable model?

We're a marketplace, we're in Tech, we have developers and one ⅓ of our workforce is on an integration path. These are people who are on RSA, unemployed for a long time, etc. and who are almost systematically sent to the construction industry, and green spaces but not to digital! This is unfortunate because these are the jobs of today and tomorrow.

On that topic, I was recently at an event at Station F about the impact unicorns. It's quite interesting. People are boasting about the next 120 big tech champions and are very happy because they are going to be asked to show their carbon footprint. We've been doing it since our first year with 5 employees! I was able to make a little comparison in the presence of the Minister of Digital Affairs. If we take the cumulative turnover of the FT120 startups, that's 11 billion, divide it by the famous 50,000 jobs (that 30,000 in France by the way), we get 1 job for every 220,000 euros of turnover. If I take Label Emmaus, we only have 2 million euros of turnover but if I divide it by the number of employees, I get one job for every 33000 euros of turnover. We're almost in a ratio of 1 to 10 and I'm only talking about the number of jobs, I'm not even mentioning the fact that we're 55% women compared to 17% in Tech, nor the ⅓ of people on integration pathways when in tech, there are only 5-year bachelor's degrees from business and engineering schools. There is a real problem of diversity and inclusion in this world but also a problem of job sustainability. 

Circularity and the search for social and ecological impact can be combined with business. At our level, we have 60,000 customers, a reputation of 9.2/10. For me, economic performance means having customers, satisfied customers, and controling our path to profitability. We're not there yet. At the moment, we are raising funds from institutional investors (France Active, Banque des Territoires, Inco) and we hope to be profitable within 3 years. 

The big difference is that every penny earned goes back into the work tool and into extremely limited salary scales that also allow us to hold on, as long as we are not profitable, without having to raise mountains.

How can this model be deployed on a larger scale?

What is certain is that startups have no trouble raising funds from traditional financiers. I don't understand why public money is targeted to these actors. Public money should be directed primarily to those who have the most social and ecological impact. And the argument that would have us believe that priority should be given to financing companies capable of recruiting a lot of people and going into hyper growth makes no sense. As we can see from the math we did earlier, this famous ratio of 1 to 10 clearly shows that it is a waste. There are many ways to channel funds: commercial incentives, tax incentives, subsidies. The BPI refused us a grant of 40,000 euros, even though we ticked all the boxes of social, digital and ecological innovation because in their calculation formula, we are a company in difficulty. As a cooperative, we can't raise shares, we don't have a sufficiently increased capital even if we propose participative securities, it doesn't work. It is not only the public financiers who must make their revolution.

Investment funds too! Why not go into the capital of cooperatives? Cooperatives have a 5-year survival rate that is much higher than that of a company, so it's not even a question of risk, it's just a question of financial mechanism. This puts our cooperatives in a permanent obstacle course. There is no premium for virtue. For me, it is obvious that it is up to the public authorities to show the way. Coming back to the Station F event, Paul Midi (Renaissance deputy) said that they were thinking of making more tax exemptions for individuals who invest in startups. I told him that we could do the same with cooperatives! We are still at 18/25%. If you put a tax deduction of 50% tomorrow, we would have fewer problems. On the one hand, we need to redirect part of the money that goes to the startup world to the French Cop and make a specific program for the SSE for the digital professions. Because the SSE world is under-equipped in terms of Tech. Today, we train SSE actors on these subjects. Barely 20% of association leaders believe they have begun a digital transition, which is very worrying. It is absolutely necessary to put a lot of means on this associative digital transition.

Label Emmaus also talks to us about diversity and inclusion. How can we get Tech players to take more action on these issues?

Entrepreneurs in startups and other large tech companies who are open to more diversity and who are not satisfied with being in the middle can take action. We can think of incentive mechanisms that allow these entrepreneurs to use these integration tools because it's not that complicated. At Label Emmaus, we have ¼ of our workforce in integration. So yes, we come from a different culture but we can manage the same services as the startups!  The traditional world of social integration is still part of the social and solidarity economy, with a majority of associations and cooperatives. It does not have access to the fundraising of startups. Unfortunately, there are still very few people in the digital sector. On the other side, there is a world that is totally ready for the world of tomorrow. But without diversity, inclusion, and without insertion. It is absolutely necessary to hybridize these two worlds.

How can this ecosystem be structured to hit harder?

It's true that we are still UFOs in this universe. We are still not taken seriously by the Tech and economic actors but also by the associative world. We can also be criticized. If we feel that we are going to answer certain aspirations of these 2 universes which can want to unite, there are also many obstacles and barriers. At the same time, I really have the feeling that it is a wave that is rising. It's much easier today than it was 6 or 7 years ago for me to speak in front of an assembly of the tech world. When I created Label Emmaus, I went around the gas pedals and every time I pitched, people looked at me with round eyes and didn't really understand what I was doing there. When you're not a traditional commercial company, doors close because you don't fit into any box, even if everyone you talk to agrees that the project is great! It is not only the financial door that closes but also an entire ecosystem! Today, things have changed. These ecosystems invite me to speak. We feel that a demand for acculturation is underway but there is still a lack of voluntarism. We are still satisfied with what has always worked like this, whereas we are facing the need for a real revolution.

This is why we are launching a campaign for another economy between SSE actors through the Alliance des Licoornes with Enercoop, la Nef, Telecoop, etc. We are 9 Cooperative Societies of Collective Interest, each one in a different consumption universe. We offer a complete alternative to what exists in our respective sectors. We really try to have this economic voice by showing that we are credible in view of our number of customers, members, etc. We prove on a very small scale that it is possible and we ask funds to follow us! We guarantee sustainability on our territories, a maximization of the social and ecological impact, there is no structure today that can guarantee as much. It is possible to invent an investment in the capital of cooperatives.