Family businesses are ideally placed to be the proponents of sustainable goals, often driven by strong values which underpin their make up. However PwC's recently published 10th Global Family Business Survey casts doubt on this idea. For example, of those polled only 16% included increasing their organisations social responsibility and 15% included reducing their organisation's carbon footprint as part of their top 5 priorities for the next two years.
So what does this mean? Do family businesses simply not consider their environmental, social and governance ("ESG") credentials as important? It would be surprising to conclude as much given the world we now live in when so much focus is placed on corporates and funds to exhibit their ESG credentials. Family businesses inherently engage with their wider stakeholders beyond the family shareholders so embracing ESG hardly seems a quantum leap.
Part of the answer might lie in time horizon posed by the survey: two years is a very short period of time. In a post-Covid world many businesses are likely to want to 'steady the ship' before their attention to wider issues of concern. Indeed, improving digital capabilities (listed by 55% of those surveyed) in an increasingly digital and competitive world is fully justifiable.
Even if this is the case family businesses should not ignore their sustainable profile, and even if they do, others in the supply chain may be more concerned and may choose to only work with organisations who demonstrate their ESG credentials as part of their own continuity. This is a very emotive and fast moving subject and not one family businesses can afford to ignore.
Agreeing sustainability goals as a family, documenting these through a sound governance structure and implementing them both as a family and a business presents a great opportunity to bring the next generation of family business leaders on board whose values mindset is often more attune to such issues.
...family businesses have two key blind spots that could jeopardize these rosy projections and their legacies. In a world where environmental, social, and governance (ESG) credentials and strong digital capabilities are becoming determinants of success, family businesses are lagging on both counts.