Originally published on LinkedIn. Jonathan Flack is PwC’s US Family Enterprises Leader and Sheri Wyatt is the company’s Trust Solutions Diversity and Inclusion Leader and ESG Partner. PwC is a Hall of Fame company.
Family businesses are ahead of the game on ESG, but there is more opportunity to enhance their longtime reputation for putting their community first. PwC’s Jonathan Flack, Family Enterprises Leader and Sheri Wyatt, Trust Solutions Diversity and Inclusion Leader and ESG Partner shared four steps to get started.
“ESG might even be viewed as an existential imperative,” Flack and Wyatt wrote on ESG Today. “Family business owners traditionally have prioritized creating an enduring enterprise for future generations. Organizations unable to show their commitment to sustainable practices could be punished by consumers, the media and regulators.”
PwC’s 2021 Family Business Survey found that 93% of family businesses engage in social responsibility activities, and 45% claimed that family businesses have the potential to lead the way on sustainable business practices.
Family businesses should prioritize the following steps to continue being trailblazers in ESG, as Flack and Wyatt shared on ESG Today:
1. Strategize: There’s no one-size-size-fits-all solution. What is the business case for your particular organization around ESG?
Gaining ESG buy-in across the enterprise requires that you clearly articulate the business case for your family business and align your approach to your corporate values. Which ESG strategies are your company pursuing now, and how will they affect functional areas? By taking a holistic approach, informed by a thorough inside view of needs, and being intentional and strategic around their priorities, leaders can develop an ESG program that reflects the values of the family business while also being responsive to ongoing external pressures.
2. Assess: What’s most important to your stakeholders?
Use one-on-one conversations, listening sessions, surveys and other methods to engage with stakeholders — employees, customers, vendors and family shareholders — in order to understand their priorities. Focus your questions on the ESG reporting frameworks that are likely driving inquiries from those stakeholders. It’s impossible to address every major issue, so dive deep to discover shared concerns. Look for opportunities to embed ESG objectives into your existing family business strategy. And determine which ESG reporting infrastructure is in place. Lastly, confirm you seek feedback from the future family members in order to have long-term orientation to your assessment.
3. Prioritize: Which areas should you focus on that will really drive organizational change?
You can’t conquer all ESG challenges at once. Acknowledge where you are on the journey. Then prioritize the key ESG areas with short-, medium- and long-term goals. Consider which issues your stakeholders bring up most frequently: How do those align to your mission and values and overall family business strategy? Which data is available for your use to begin reporting on progress? Which resources will be needed to establish achievable goals?
4. Evaluate: Which of your existing policies and priorities will help you achieve your ESG goals?
When establishing your ESG goals, evaluate your current policies and determine whether they need to be reexamined or enhanced to ensure they don’t get in the way of achieving your goals. An assessment of the family’s overall governance system for making decisions should be included in the evaluation process. As ESG challenges tend to involve major shifts in policies and practices, families need an effective and efficient decision-making system.