Family businesses have been around for generations, some even spanning up to 10 generations. These companies are known for their resilience and long-term view. However, with the younger generation prioritizing ESG (Environmental, Social, and Governance) focus, performance, and reporting, there is a growing push for transparency. Alexis du Roy de Blicquy highlighted this shift in focus within the Family Business Network.
To meet the demands of investors, lenders, and customers, family businesses must adapt. Alex Friedman discussed three levers for change: government action, religion, and capital flows. Capital will flow towards businesses that excel in ESG principles. Businesses with private equity investors, bank lending, and listed customers will face pressure to be transparent on climate, environment, human rights, and social inclusion. Tools have been developed to help businesses understand their environmental impact, report on it, and implement improvement programs to satisfy stakeholders.
The landscape for family businesses is evolving as sustainability becomes increasingly important. By embracing these changes and implementing sustainability measures, family businesses can ensure their long-term success in a shifting market environment.