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ESG is a global megatrend. Whether through regulation, changing customer awareness, or the direct effects of climate change, sustainable business is moving into the spotlight. However, companies - just like industries and sectors - are at different stages in transforming their business models. In the English-language study „A road well-traveled“  the experts now analyze the status quo for a group that is particularly relevant not only in Germany: family businesses.

Family-run companies are regarded as an important foundation of the business location, not least because of their focus on long-term planning. One of the questions we are investigating in the study is therefore: Does this focus on the long term and sustainability also ensure that family businesses lead the way for other companies and sectors in the sustainable transformation of their business models?

Study based on interviews and sustainability indicators

The study is the result of cooperation between KPMG and the STEP Project Global Consortium. The study was based on interviews and group discussions with executives from family businesses around the world. On the other hand, the report is based on the analysis of detailed sustainability data from our global survey of 2,439 family business leaders who were represented in the 2022 report "The regenerative power of family businesses".

Long-term focus should lead to stronger integration of non-financial KPIs

For many family businesses in Germany, the cross-generational development of their business model is the most important driver, followed by competition and rising customer expectations. "Due to their long-term focus and responsibility to society, we expect to see even greater integration of financial and non-financial sustainability KPIs into their management models in the future," says Vera Elter, Member of the Executive Board for Human Resources and Family Businesses at KPMG in Germany.According to Elter, executives of family businesses will attach additional importance to sustainability KPIs in reporting, planning and forecasting cycles, decision-making processes and incentives for management.

"Stakeholder capitalism" comes increasingly into focus

The topic of sustainability is also particularly about creating and living shared values - and it is precisely on this strong foundation that many family businesses are built. According to the study, creating shared values for all stakeholders is considered part of their DNA. And this is where family businesses anchor the concept of stakeholder value, i.e. the consideration and appreciation of customers, employees, communities, the environment and various other groups in society.

Sustainability is seen by family businesses as an economic imperative for long-term growth and prosperity. The pursuit of sustainability is part of the values of owning families and in their business models. It is seen as a significant part of the family legacy, as each generation is expected to pass on more than what it has received.

This is also the reason why, according to the authors, family businesses have the opportunity to lead the way for other companies and sectors.

The study also describes eight key factors for the path to a sustainably successful future: