This series provides an overview of the concept of sustainability, why family businesses need to think differently about it, the powerful benefits of corporate sustainability, and some concrete steps that family businesses and rising generation leaders can take.
Corporate sustainability is a topic of great interest to rising next generation family members, specifically Millennials and Generation Z. Next gens are beginning to assume roles in their family enterprise, such as business family leaders, shareholders, board members, and executives, among other roles. In large part, this new generation of leaders does not see corporate sustainability as separate from business performance. Studies show that next gen leaders are drawn to working in purpose-driven organizations.[1] Their leadership in corporate sustainability is proving to be a motivating challenge that can help rising leaders achieve the long-term viability in their family businesses.
What is sustainability?
Originating from several United Nations Conferences, the term “sustainable development” was coined in 1987 by the Brundtland Commission:
“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”[2]
A business adaptation of the Brundtland definition by the International Institute for Sustainable Development (IISD) explains that sustainability is: “Adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future.”[3]
In 1992 at the UN “Earth Summit,” business leaders further advanced the role of the private sector in sustainable development. Following this summit, a group of global business leaders formed the World Business Council for Sustainable Development (WBCSD), whose mission is to: “accelerate the transition to a sustainable world by making more sustainable businesses more successful.”[4] This CEO-led organization is comprised of over 200 leading global businesses, of which about 20% are family businesses.
In 2012, at the twenty-year anniversary of the UN Earth Summit, businesses agreed that the way the private sector manages opportunity, scarcity, and risk would determine the enduring value companies build for stakeholders and society. The business community could advance sustainable growth through partnerships that would drive innovation. Sustainability, a concept that in the past was viewed as a cost to companies, is now considered a value-increasing strategy for business.[5]
Implementing a corporate sustainability strategy involves certain short-term costs; however, the benefits far outweigh the costs.
The Costs and Benefits of Implementing a Corporate Sustainability Strategy
[1] “Polaris – Building a Flourishing Family Business: Volume 2 – Ideas, Innovations & Inspiration from our Network & Beyond,” Family Business Network, p. 6, November 2016, https://www.fbn-i.org/sites/default/files/2019-05/FBN-2016_FA_210x285mm_Single-Pages_HR.pdf. [2] William Blackburn, The Sustainability Handbook: The Complete Management Guide to Achieving Social, Economic, and Environmental Responsibility (New York: Earthscan, 2007), 3. [3] Ibid, 18. [4] “About us,” World Business Council for Sustainable Development, accessed May 17, 2020, https://www.wbcsd.org/Overview/About-us. [5]“Sustainability Report 2012,” Firmenich, 2012, p.9, https://www.firmenich.com/uploads/files/sustainability_reports/Firmenich_Sustainability_Report_2012.pdf.
An international champion of a low-carbon future and a net zero economy, Ana Tavares Leary is a published expert in climate change, international business, and sustainable development. For over 10 years, she has made a significant impact as a consultant managing over 60+ international projects for family-owned businesses, biotech, and environmental sciences.
