Global survey finds those with an ESG strategy are more trustworthy
A recent poll of family businesses around the world has shown family businesses whose corporate missions line up with the UN’s sustainable goals outdo their peers not just in terms of social criteria, but also based on several financial metrics.
According to the Transform to Build Trust study, PWC’s 11th Global Family Business Survey, 43% of family companies worldwide had double-digit revenue growth in the most recent fiscal year, up from 21% in 2021.
This year's poll discovered that family businesses with double-digit growth over the prior fiscal year were more likely to have a set of definite family values and a common goal. Furthermore, 50% of businesses with missions that support the UN's Sustainable Development Goals experienced exponential growth.
Family businesses weathered the COVID-19 pandemic, but data shows a disconnect between leaders' priorities and areas of focus that are linked to greater levels of improvement. According to research, high-performing family firms have employee incentives (53%), boards that value diversity (52%), and excellent digital skills (47%).
Instead of exploring digital skills and launching new goods and services, family-owned businesses in 2023 are mostly concentrated on safeguarding the main business, managing expenses, and surviving. Despite being aware that employee trust is crucial to company success, just 36% of family firms are focused on acquiring and keeping talent.
There is proof that having an established ESG strategy that has been discussed and agreed upon highly corresponds with success and other favourable qualities. Family firms who are less advanced in this area (42% of those polled) reported double-digit growth for just half (50%) of those that had an agreed-upon and articulated ESG plan.
The two most significant facts are that customers increasingly expect businesses to act on social concerns and that goal-led family businesses have greater levels of family member trust (59%) than other types of companies.
This is evidenced by the fact that more family businesses (52% of them) have had double-digit growth in the last year, and 10% more enterprises who have worked hard to increase internal trust have seen greater growth rates. Only a small percentage of family businesses, 46%, publish their purpose online and 36%, actively communicate it to family members, to ensure that it is tracked effectively.
Due to their emphasis on ESG, diversity, and customer trust, family businesses have a competitive advantage in the face of radical disruption and an altering economic landscape. Only 22% of them, though, are presently paying attention to it. Businesses who are advanced in their use of DEI and ESG initiatives are growing by double digits, with consumers being the most important stakeholder group.
Family firms with excellent digital skills grew by double digits in the last year, making it easier to get feedback from clients and staff. Although 52% of respondents list digital capabilities as a top five priority for the next two years, only 2 in 5 (42%) believe they have strong digital capabilities.
“While market pressures and rising costs mean survival is the main priority for family businesses globally, our latest data shows that those family businesses which are focussed on digital transformation and diversity, are reaping the rewards,” Peter Englisch, PwC Global and EMEA Family Business Leader, concluded.
“Now more than ever, building competence and achieving strong financial performance are linked to corporate responsibility. The message is clear, for family businesses to survive, they must transform. And that transformation is now.”
