UK family businesses risk falling behind other countries in their commitment to prioritising sustainability in their strategies, according to findings from PwC’s latest Global Family Business Survey.
While more than half (53%) of UK family businesses surveyed believe they have a responsibility to fight climate change and its related consequences, only a third (33%) have developed and communicated a sustainability strategy compared to the global average of 37%. The survey reveals 79% of respondents in mainland China, 78% in Japan and 49% globally report ‘putting sustainability at the heart of everything we do’ compared to 39% in the UK.
Hannah Harris, PwC UK Family Business leader, said: “A commitment to a wider social purpose has always gone hand in hand with family business in the UK, but there is growing societal pressure from employees and business stakeholders to demonstrate more meaningful action around sustainability and wider ESG issues.”
“Listed companies have started to respond, but our survey shows that UK family businesses have a more traditional approach to social contribution such as contributing to the local community or philanthropy. It is on family business to adapt to these expectations or they risk creating a potential business risk.”
With business still feeling the effects of the COVID-19 pandemic, expectations for growth within family businesses is split right down the middle. Out of the UK respondents, only 53% expect to see growth in 2021. However, the outlook for next year is much more positive with 86% expecting to see growth.
Family businesses are known to be agile and embrace change, which is reflected in their key priorities for the next two years. Top of the list is improving digital capabilities (60%), followed by introducing new products and services (53%) and increasing use of new technologies (47%).
Covid impact and succession
Over the past year, UK family businesses went further in comparison to the global average when it came to providing support for staff during the Covid-19 pandemic and the sacrifices family shareholders made.
Eighty-six per cent of respondents retained as many staff as possible and 72% provided emotional/mental health support for staff compared to the global average of 76% (retained staff) and 45% (provided emotional/mental health support) respectively.
More than half (54%) of family shareholders took a reduction of dividends, 44% reduced their bonus and 40% reduced their salary.
The majority of first generation UK family businesses expect that the next generation will become the majority shareholders within five years time. Just over a quarter (26%) say they have a robust, documented and communicated succession plan in place.
Hannah Harris added: “The COVID-19 pandemic has shown UK family businesses remain resilient in the face of a crisis, underlined by the efforts they have made to retain staff, provide extra help for employees and make financial sacrifices.”
“With society slowly moving towards some kind of normality, family businesses will look to build on their digital capabilities, while managing family dynamics and looking to invest in more sustainable business practices.”PwC UK Family Business Outlook