Family businesses reject corporate ESG movement, survey finds
But a gap in understanding around green issues should not be mistaken for a gap in implementing actual sustainable practices, Grant Thornton says.
Many family businesses view sustainability issues in a “negative” light, a Grant Thornton survey finds, even as ESG converts sing its praises and regulatory action intensifies.
Over one-third of business owners in the mid-tier firm’s Family Business Survey 2023 said ESG issues were a low strategic priority, and 66 per cent considered them only “mildly important”.
Family businesses in industries such as technology, media, communications and the arts reported comparatively higher levels of commitment to ESG but “degrees of understanding” were mixed overall, it said.
Over 30 per cent reported a lack of clarity and understanding of ESG strategies, and one-fifth of respondents were not confident about their ability to oversee sustainability objectives.
Financial considerations also loomed large in the minds of family business owners, with 34 per cent concerned that the cost of implementing an ESG strategy would outweigh any potential returns.
“There is a sense of negativity among family businesses when it comes to the ESG and sustainability landscape,” the survey said.
The survey, which garnered 280 responses from business owners, CEOs and decision makers in the family business sector, also found a divergence of attitudes along gender lines.
While 60 per cent of women in family businesses recognised the benefits of sustainability, nearly one-half (42 per cent) of men believed that sustainability had “no impact” on their business’s success.
National head of family business consulting Kirsten Taylor-Martin said she was initially taken aback by these findings, but realised the real problem was around how respondents perceived ESG issues.
“When I read the initial results, I was surprised. But then when we drilled into it a lot deeper, it actually did make a lot of sense. What really shone through was that family businesses just were not resonating with the language that the corporate world ordinarily uses,” she said.
“There is a total lack of understanding of what this terminology refers to.”
Despite not resonating with mainstream ESG discourse, Ms Taylor-Martin said “family businesses are probably doing a lot more than the corporate world is doing.”
“A lot of big businesses are talking about ESG, because they want to be seen to be talking about ESG, nearly like ticking a box. But for a family business, it’s about making actual long-term changes,” she said.
“They're coming at everything from a moralistic perspective, not because there's new reporting requirements.”
She said most family businesses had “no understanding whatsoever” of modern slavery, for example, because “they would never dream of treating someone wrong – that doesn't sit right with their family values.”
“So for many family businesses, they probably think [modern slavery] doesn't even exist, because they could never do it themselves.”
“I don't have any concerns that they didn't resonate with the terminology around ESG. It makes me question: Have we got the words? Are the words correct? Or should we be referring to it in a different manner?” she asked.
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