New initiative harnesses the power of family-owned businesses to be a force for good, investing in and promoting a business model that looks after people and the planet for generations to come.
UNCTAD and the Family Business Network (FBN) have joined forces to mobilize and support family firms to embrace sustainability in their business strategies.
The joint Family Business for Sustainable Development (FBSD) initiative is a first-of-its-kind partnership between the UN and the global family business community.
Two-thirds of businesses worldwide are owned or managed by families, employing 60% of the world’s workforce and contributing over 70% of global GDP.
“Family firms can make a huge difference in global efforts towards sustainable development,” said James Zhan, UNCTAD's director of investment and enterprise.
He said family businesses need to be empowered to maximize their potential and seize the untapped opportunities associated with embracing the sustainability agenda.
To deliver on the UN Sustainable Development Goals (SDGs) by 2030, an ambitious global effort is required over the next decade to accelerate sustainable solutions to the world’s economic, environmental, social and governance challenges.
Family businesses are critical partners
Family businesses are key to building a transformative and sustainable future.
“Collectively, they have immense financial resources to invest in the SDGs and help plug the trillion-dollar financing gap,” Mr. Zhan said.
“Family firms invest their own resources and can take quick action to put their businesses and investments on a sustainable track,” he added.
Also, family businesses are locally minded and long-term by nature. They think in generations.
However, many family businesses have traditionally been private and kept a low profile, with limited public disclosure and reporting on sustainability.
How the initiative will benefit family firms
The FBSD initiative gives them the opportunity to transparently report and clearly demonstrate their contribution to improving lives.
It also allows them to better understand why the SDGs matter to their businesses and where they can make an impact, while allowing them to benchmark their sustainability performance against other similar businesses.
The initiative aims to mobilize and support family businesses to commit to concrete and measurable contributions towards the SDGs. It offers them ways and means to integrate sustainability into their conventional business models and to provide evidence of their contributions to the SDGs.
Harnessing global expertise
UNCTAD and FBN will share expertise and best practices derived from their global network of investment and development stakeholders and offer the family business community an international platform to facilitate their contributions to sustainable development.
FBN is a vibrant community of enterprising business owners that brings together over 4,000 families with 16,000 firms from 65 countries.
“We’re excited to partner with UNCTAD in this ground-breaking initiative to create shared prosperity for all, mobilize investment in sustainable development and define success across generations,” said Alfonso Libano, co-chair of the FBSD executive board and vice chairman of COBEGA SA, Spain.
“Our current focus is on expanding our capabilities on sustainability reporting and encouraging higher levels of transparency for all family businesses, no matter where they are on their sustainability journey,” he added.
Components of the initiative
Key components of the initiative include the family business sustainability pledge, which advocates an environmental, social and governance roadmap that signatories agree to act upon.
FBSD provides family firms with a template, the UNCTAD-FBN sustainability indicators for family business, to guide and assess the implementation of and reporting on actions by individual companies in a measurable, comparable and transparent manner.
It seeks to inculcate sustainability considerations among business-owning families and serves as a benchmark for the overall assessment of the results and impact of the global initiative.
The reporting framework builds upon UNCTAD’s guidance on core indicators for entity reporting on contribution towards the implementation of the SDGs.
To complement the framework, the initiative elaborated additional disclosure elements to capture and recognize family businesses’ efforts in contributing to sustainable development.
Also, the initiative will include capacity-building activities for family firms, allowing them to participate in global multistakeholder discussions on boosting sustainable development efforts, in the context of the World Investment Forum.
The initiative will be guided by an advisory council co-chaired by sustainability luminaries Prof. Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, and Dame Polly Courtice, founder and director of the Cambridge Institute for Sustainability Leadership.
“I am particularly excited by this initiative because it taps into the inter-generational power of families and family wealth as a means of delivering the SDGs and addressing some of the existential risks that we face,” said Dame Courtice at the official launch of the initiative on 25 February.
Doing good while doing well
“The SDG framework challenges us to question whether we are doing enough and focusing on the right themes. Signing the pledge sends out a strong message to our stakeholders: now is the time to act and together we can achieve more,” said Marc du Bois, chief executive officer of the Spadel Group, which produces natural mineral water and beverages.
“There’s no question that sustainability policies are crucial to Spadel’s business success. The purity of our natural mineral water depends on a clean and healthy natural environment,” said Mr. du Bois, who is from the third generation of the family running the firm.
He said the SDGs are a fitting blueprint for fostering sustainability among family businesses because they consider not only the current situation, but future generations too.