With environmental, social and governance (ESG) factors becoming pivotal for business growth, the next generation of family business leaders need to take a lead in building an ESG strategy and reimagining their family business’ success, according to a new study.
NextGens should prepare themselves to be the future leaders who will fortify and develop the family legacy and support responsible business growth, PwC’s NextGen Survey 2022 – Asia-Pacific and Asean says.
The survey finds that NextGens in APAC (56%) and Asean (55%) are only slightly more likely than the current generation (52%) to see the opportunity for their business to lead the way in sustainable business practices.
However, when posed the question of whether the family business has a responsibility to fight climate change, the contrast is greater, with 48% of the current generation saying yes compared with 67% of NextGens in APAC and 69% of NextGens in Asean supporting climate action.
There is also a significant gap in the answers to whether there should be an increase in focus and efforts towards sustainable business practices with NextGens in APAC and Asean (57% and 61% respectively) agreeing, and only 49% of the current generation concurring.
NextGen family business leaders should take a more proactive approach in addressing climate change, especially through responsible business practices. The study suggests several ways of doing this, including applying an ESG lens to business strategy and operations, and enabling management to adopt new perspectives and upskill.
For NextGens who want to invest or engage in ESG in the region face several issues, including the absence of standardized reporting criteria to benchmark against and a lack of a ready pipeline of experienced ESG professional talent, both of which show no sign of being remedied in the short term.
About a third of the 1,036 NextGens who participated in the global survey are from the Asia-Pacific and Asean region.