The Family Business Network has highlighted the importance of inclusive prosperity, with many family-run businesses having been in existence for multiple generations. Some luxury goods companies have even spanned up to 10 generations, emphasizing resilience and a long-term perspective. However, accommodating the new generation’s push for transparency can be challenging.
Alex Friedman discussed three ways to drive change: government action, religion, and capital flows. With ESG (Environmental, Social, and Governance) becoming increasingly important to the younger generation, businesses that prioritize these principles will attract investment from private equity firms, bank lenders, and listed customers. To satisfy stakeholders, businesses must understand their environmental impact and implement programs to reduce it. Tools have been developed to help companies report on their ESG performance and make improvements in areas such as climate change and social inclusion.
In conclusion, family businesses are evolving as the next generation brings a renewed focus on ESG principles. Companies must adapt to meet the transparency demands of investors, lenders, and customers by implementing sustainability measures. By embracing these changes and prioritizing ESG principles in their operations, family businesses can ensure long-term success in an ever-changing market environment.
