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The EU leverages development assistance to support the private sector's contribution to development. It is considered a key tool for the implementation of the 2030 Agenda. As the EU’s main external policies are implemented bilaterally, actions vary substantially across regions and countries. Inclusive Businesses, Social Enterprises and other sustainable business approaches are often referenced and recognised as part of the overall private sector measures.

Within the European Commission, the Directorate-General for International Cooperation and Development (DG INTPA) is in charge of development policy in a wider framework of international cooperation, adapting to the evolving needs of partner countries.

Over the last decade, European Commission support for private sector development has averaged EUR 350 million per year and the current Multiannual Financial Framework for 2014-2020 contains approximately EUR 2 billion for private sector development. This, combined with development assistance from Member States, makes the EU a key player in supporting local private sector development in partner countries.

The key policy document is the Commission Communication - A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries. The Communication highlights 12 concrete actions where the Commission believes it can add value and effectively complement actions by Member States and development partners on private sector cooperation. The actions target better regulatory environments in partner countries, business development and access to finance, especially for job-creating micro, small and medium-sized businesses. Both this document and the 2017 European Consensus on Development, which provides the framework for the EU’s international cooperation policy, acknowledge that cooperatives, social enterprises and “other forms of people-centered businesses” provide sustainable livelihoods and inclusive solutions to social problems. The Consensus calls on the EU to promote SE, cooperatives and women and youth entrepreneurs and to support inclusive and green business models. Another recent Commission Communication is the Achieving Prosperity through Trade and Investment updating the 2007 Joint EU Strategy on Aid for Trade. The Communication highlights the importance of trade as an instrument to poverty reduction and jobs creation through trade and investment. It puts a strong focus on inclusiveness by targeting the least developed countries, and countries in situations of fragility.

IB models could be promoted in projects under the umbrella of the the EU Trade for All Strategy (2015), which aims, among other thigs, to foster fair and ethical trade arrangements for small producers in third countries; and the EU Aid for Trade Strategy (2017), which aims to support fair and ethical trade in partner countries and ensure sustainability as part of companies’ core strategies.

The main external action instrument providing private sector support is the External Investment Plan (EIP), which sets out a coherent and integrated framework to improve investment in Africa and the European neighbourhood in order to promote decent job creation as well as inclusive and sustainable development. This is done through the three pillars: providing a guarantee, technical assistance and promoting a conducive investment climate. One of the EIP windows is focused on micro, small and medium enterprises, including inclusive aspects such as targeting women entrepreneurs, as well as having a focus on fragile states.

Within the EU, the social economy (including SEs, IBs, cooperatives and non-profit associations) is a crucial part of the socioeconomic landscape. It accounts for 8% of the EU’s GDP, and there are 2.8 million social economy enterprises and organisations that provide 13.6 million jobs altogether. The social economy has become increasingly important on the European level in the last decades. Since 2011, 16 EU Member States introduced new legislation concerning social enterprises. It has received considerable financial support through instruments such as the European Social Fund (ESF) and the Programme for Employment and Social Innovation (with an overall budget of over 900 million euros for the period 2014-2020). This year, a European Action Plan for Social Economy aimed at supporting the creation and scaling-up of social enterprises is about to be published.