Family Business: A Force for the Greater Good
As countries battle the pandemic and plan ahead for an inclusive, sustainable and prosperous future, the crisis has necessitated a call for an urgent rethinking and transformation in how businesses strive for sustainability and inclusivity.
Now more than ever, there is an evolving interest in corporate boardrooms and among shareholders in advancing Corporate Social Responsibility (CSR) delivery and in instilling sustainability within core business plans and strategies. Leading and influential business leaders, including family business leaders, are more than ever positioning sustainability as an indispensable opportunity to accelerate value creation and drive collective positive impact for the society at large.
According to a groundbreaking KPMG Study on SDG Reporting in 2018, 84% of top and leading companies have identified the Sustainable Development Goals (SDGs) that are most relevant to their core business management and operations. They reported that the SDGs are becoming a dominating consideration for investors, as they represent tangible indicators relating to ESG (Environmental, Social and Governance) which in turn reflect not only on the bottom line but on the community at large. There is a strong business case for investing in companies aligned with the SDGs, which are shown to secure steady returns for investors by creating multiple competitive advantages across their entire portfolio.
This applies to family business firms as well, which constitute the bedrock of the economy of the MENA region, and contribute in critical ways to social and economic development. In fact, some of the largest businesses in the region are run as families through private companies, and their integration of the SDGs and its related ESG indicators will be a tipping point for the advancement of the entire region in relation to the UN 2030 agenda. While this sort of involvement is becoming mainstream, with many family business leaders showing a natural affinity to impactful societal projects, there is more work that lies ahead in way of institutionalizing this sort of involvement and embedding it at the heart of family business governance.
The United Nations 2030 Agenda for the 17 Sustainable Development Goals (SDGs) represents a global collective roadmap and universal framework for business to communicate performance, set concrete targets, engage actively with various stakeholders and tap access to unparalleled market opportunities.
Here is a simple 6-step guide on how businesses can effectively align their business strategies and operations with the SDGs:
- Embrace a profound understanding for the SDGs and link relevant targets to their core business activities
For businesses to be able to kick off their Sustainability and Responsible Leadership journey, they need to adopt a thorough understanding of the SDGs and their relevant targets and key performance indicators (KPIs) and explore how they can relate and synergize those with their business overarching goals and core activities.
- Cleary define priorities
Companies should prioritize SDG targets by considering which will have the biggest impact in terms of risk or opportunity in the medium- to long-term and which goals the company has the ability to contribute to achieving progress and accelerating social impact. It may be that a company is contributing to all of the 17 goals, but when allocating resources and defining the timeline, it is important to start with reasonable targets which create the largest impact aligned with core business activities and strategies.
- Set concrete goals
Once the key SDGs are identified, it is important to link those goals to actual business targets and KPIs to monitor and communicate progress. Quite often, companies may already have existing targets and actions which they can leverage while developing their SDG strategy. A good example of this is Unilever providing a clear linkage and details on how their carbon positive targets align with various initiatives such as RE100, SBT, and contribute to the relevant SDGs.
- Integrate the SDG set targets and goals with core business strategies
In order to make the SDG strategy viable and effective, companies must integrate these targets into the existing strategy, taking into account business models, procurement and R&D processes, and supply chain transformations. By realigning sustainability strategies to achieve both corporate goals and the SDGs, companies can identify areas where they can draw from existing commitments and projects to contribute positively towards the most relevant SDGs.
- Innovate and collaborate
The SDGs provide a framework for innovation, creating business growth opportunities and new business models, products, or services that drive progress toward the goals. Going through this exercise also helps to identify partners within sectors and across different industries which enables organizations to scale up their efforts and ultimately accelerate collective impact for the greater good.
- Report and communicate
Companies need to be ready to communicate their progress in addressing goals linked to the SDGs. It is crucial to integrate the SDGs at the heart of a transparent business reporting process to allow for continuous benchmarking and avoid duplicated efforts while ensuring transparency and accessibility of their performance to various internal and external stakeholders. The Global Reporting Initiative offers a concrete benchmark for the highest standard of global impact reporting.