Eight ways family businesses can boost sustainability strategy

05 May 2023 Consultancy.uk 5 min. read

A new report has highlighted eight key success factors for the sustainability and digitalisation strategies of family businesses. Close to half of family businesses now believe these are key fronts which will determine their future success.

The study was completed by Big Four consultancy KPMG, in collaboration with the STEP Project Global Consortium. The data the researchers gathered from 2,439 family businesses across 70 countries and territories has revealed how business families are great sustainability ambassadors, demonstrating how to embed best practices, create shared value, gain a competitive advantage and achieve long-term growth.

Some companies, especially smaller businesses, still have concerns regarding the short-term economic feasibility and costs of sustainability. Nevertheless, with encouragement from many different stakeholders, many are beginning to take the first steps on their sustainability journey. To that end, according to the study, 43% of respondents reported high levels of sustainability and digitalisation.

Eight ways family businesses can boost sustainability strategy

Tom McGinness, Global Leader, Family Business, KPMG Private Enterprise, commented, “I truly believe that family businesses that successfully engage with all their stakeholders on this sustainability journey will not only survive but prosper. Those that don't step up are likely to be left behind and the choice for companies may be that binary. Family businesses have prospered based on core sustainability principles across several generations, and there are many lessons that everyone can take away from their experiences.”

For family businesses still unsure how to begin their own sustainability journey, KPMG’s report also emphasises some of the key requirements to help businesses to unlock improved sustainability performance. The eight-point plan aims to create a blue-print to guide sustainable and responsible business practices, many lessons of which are applicable across industry.

Dispersed family ownership

Family involvement in a business can see traditionally minded family figures reluctant to give up any control of their organisation. A 99% majority of respondents reflected this, admitting that their CEOs had multiple roles in their family business. But this can hold back change – particularly when it comes to matters which younger generations are more deeply invested in, such as climate change.

Active non-family members

Following on from this, companies with highly-concentrated family ownership also saw low ratings on KPMG’s sustainability and digitalisation index. The levels were higher when families owned fewer than 25% of shares, however, allowing non-family members to challenge the status-quo within a family firm.

Highly structured governance practices

To help balance the make-up of the firm’s management, ensuring that not only one voice dominates it – and allowing for non-family involvement – governance structures are important. According to KPMG, firms which were run by boards or family councils – rather than simply lone figures – were able to make better progress defining sustainability goals, and implementing plans to reach them.

Charismatic or transformational leadership style

This is not to say that business leaders simply have to ‘get out of the way’ when it comes to sustainability, though. Leaders have an important role to play in securing buy-in from the broader firm – leading from the top to influence the basic values and beliefs of staff and management. KPMG noted that charismatic leaders have a power of persuasion which can highlight a sense of shared identity, and help the broader firm understand the importance of challenges ahead.

Gender diversity on the board

KPMG also found that diversity is a notable contributor to sustainability performance – particularly in correlation to the number of female board members. According to the firm, previous research suggests women directors have more diverse backgrounds and education which can add ‘new thinking’ to a board – helping push forward discussions on sustainability. Similarly, many top-performing family businesses are increasingly adopting new hiring practices focused on minority groups, persons with disabilities and in achieving greater gender balance in senior management roles.

Forward-looking orientation

Perhaps most obviously, for a matter aimed largely at offsetting negative climate outcomes in the next 50 years, a future-oriented approach to business is important. Firms with long-term visions therefore tend to have a better sense of urgency when it comes to tackling sustainability today – being aware that a failure to act may jeopardise things like their supply chains, or international investments.

Strong entrepreneurial mindset

This forward-thinking attitude will also flag up opportunities for firms to take advantage, in both the short and long-term. An entrepreneurial mindset helps family businesses to recognise those opportunities, and how they can make the most of them – making sustainability targets more attractive to them in the process.


Finally, family businesses need to understand that sustainability and digitalization are interconnected. Digital technologies can be enablers of sustainability policies, monitoring energy use and resource waste, and helping identify areas where efficiency can be increased and costs cut. Family businesses which implement digital technologies in this way are typically faster and more agile than their competitors, with the ability to respond to change more rapidly, and better meet sustainability and business goals as a result.