Surveys
Sustainability Really Matters For Family Businesses – KPMG Study
An annual report from KPMG Private Enterprise and the STEP Project Global Consortium – released this week – highlights how family businesses have made sustainability an integral component of their business model.
A new report from KPMG Private Enterprise and the STEP Project Global Consortium reveals that 43 per cent of the global family business survey respondents reported high levels of performance on the sustainability index.
This is based on eight key factors, including highly-structured governance, active non-family member involvement, dispersed family ownership, increased number of female board members, digitalization as a sustainability enabler, charismatic or transformational leadership, strong entrepreneurial mindset and forward-looking orientation.
The report entitled A road well-traveled – How family businesses are guiding the sustainability journey brings together insights from the sustainability experiences of family businesses combined with sustainability performance data gathered from 2,439 family businesses across 70 countries and territories.
It uses both qualitative and quantitative research, citing a multi-generational commitment to create value for all stakeholders as one of the underlying reasons why family businesses excel as sustainability leaders. “It reflects an important shift in mindset away from considering sustainability measures [as] an additional cost of business, but [as] an essential investment in the future,” the firm said.
Sustainability conversations are high on the agenda across the world. Many of the discussions at the 2023 annual meeting of the World Economic Forum in Davos, for example, reflected a sense of urgency to accelerate sustainability progress across industries and geographies.
The report positions sustainability as a familiar concept within business families and an important part of the family legacy, a claim supported with key analysis across varying jurisdictions and sectors that reveal just how embedded sustainability practices have become in family values and business models. Investing in sustainability and operating in a sustainable way is not only viewed as the right thing to do, but it’s also becoming an essential component and catalyst for company growth, the firm said.
“Until recently, many family businesses have had a relatively informal approach to sustainability with a focus on doing what’s right for their employees, customers and communities. But now there’s greater recognition that their sustainability actions are actually potential differentiators with the power to create measurable competitive advantages,” Alan Barr National KPMG Private Enterprise leader partner, KPMG in South Africa, said.
Andrea Calabrò, STEP Project Global Consortium academic director, added: “Companies that are able to anticipate and meet rising environmental and societal expectations are also more likely to improve their reputations, attract and retain top talent and generate new business opportunities. Sustainability is now a business imperative, as much as it is a stewardship one, and the companies that fail to adapt may struggle to compete in a new, low-carbon world.”
The report emphasizes some of the key requirements to help businesses to unlock improved sustainability performance – the essence of which can serve as a blueprint to guide sustainable and responsible business practices, many lessons of which are applicable across industry.
Tom McGinness, global leader, family business, KPMG Private Enterprise, KPMG International, said: “I truly believe that family businesses that successfully engage with all their stakeholders on this sustainability journey will not only survive but prosper.”
“Those that don't step up are likely to be left behind and the choice for companies may be that binary. Family businesses have prospered based on core sustainability principles across several generations, and there are many lessons that everyone can take away from their experiences,” he added.
The report concludes that no-one can solve the world’s biggest environmental and societal issues alone and considers the time to be opportune for companies across the world to tap into the experiences and know-how of business families, and to do what’s right for generations to come by putting sustainability strategies on their ‘business as usual’ agenda.
The STEP Project Global Consortium is a global applied research initiative that explores family and business practices within business families and generates solutions that have immediate application for family business leaders. To support the needs of family businesses, KPMG Private Enterprise meanwhile coordinates with KPMG firms globally that are dedicated to offering advice to family owned companies.