Family businesses, many of which have been in existence for multiple generations, are facing a new challenge as the younger generation pushes for transparency and ESG (Environmental, Social, and Governance) focus. To meet these demands, businesses must adapt to accommodate the changing landscape. Alex Friedman discussed three levers for change: government action, religion, and capital flows.
As the younger generation prioritizes ESG principles, performance, and reporting, capital will flow towards businesses that excel in these areas. 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.
Alexis du Roy de Blicquy highlighted the importance of inclusive prosperity within the Family Business Network. Many family businesses emphasize resilience and a long-term view. However, accommodating the new generation’s push for transparency is essential to maintain their success in a shifting market environment. By embracing these changes and implementing sustainability measures, family businesses can ensure their long-term success while also meeting the demands of investors, lenders