While some companies are transforming their businesses to meet the needs of society and the environment, family-owned businesses seem to be falling behind, according to a new report by PwC.
While 55 per cent of respondents saw the potential for their business to lead on sustainability, only 37 per cent have actually put into place a defined strategy. European and American businesses are lagging their Asian counterparts in their commitment to making sustainability a priority. About 79 per cent of respondents in mainland China and 78 per cent in Japan reported “putting sustainability at the heart of everything we do,” compared to 23 per cent in the U.S. and 39 per cent in the United Kingdom.
Many companies use philanthropic methods to help society
PwC says the issue is an increasingly out-of-date conception of how businesses should respond to society. Some 76 per cent of family-owned businesses in the U.S. and 60 per cent in the United Kingdom place greater emphasis on their direct contribution, often through philanthropic initiatives, rather than through a strategic approach to ESG matters. Family businesses are also somewhat insulated from the investor pressure that is currently pushing public companies to put ESG at the heart of their long term plans for commercial success.
"Family businesses must adapt to changing expectations and by failing to do so are creating a potential business risk,” said Peter Englisch, global family business leader at PwC. “This is not just about stating a commitment to doing good, but setting meaningful targets and reporting that demonstrates a clear sense of their values and purpose when it comes to helping economies and societies build back better."
