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Is your business clear on ESG communication?

According to Grant Thornton's Family Business Survey Report, 31 per cent of respondents revealed there is a lack of clarity and understanding when it comes to ESG, with misconceptions hindering the adoption of sustainability frameworks.  

However, family enterprises are at the forefront of implementing sustainable practices; the key lies in effectively communicating these initiatives to both internal and external stakeholders.

ESG frameworks and plans encompass various subcategories and areas where businesses can focus their commitment. Some of these areas include carbons emissions, waste management, biodiversity, water management, diversity equity and inclusion, data protection, modern slavery, cyber security, regulatory compliance and risk, ethical business practices, board composition, and tax governance.

While the survey revealed a misunderstanding of corporate jargon could be the reason for not comprehending the importance of implementing ESG frameworks within a business (31 per cent), it also found just under a quarter of family businesses think the lack of resourcing, skills and experiences of staff are areas holding them back from implementing an effective sustainable strategy (23 per cent).

Michaela Pogson, Private Business Tax & Advisory Partner at Grant Thornton said: “I’m passionate about partnering with family-owned and mid-sized businesses to shape their ESG and sustainability strategies. To me, working toward a sustainable future is crucial – now more than ever. As an advisor, my role is incredibly dynamic – I’m constantly engaged with owners and finance teams and see first-hand the amazing work they are doing in the environmental and social space. It’s critical their message, vision, and initiatives are communicated in an effective way for external stakeholders.

“With the rise of ESG reporting requirements and trends, I see family businesses leading the way. It’s all about taking those small steps, setting measurable goals, and rallying employees and stakeholders on the sustainability journey. Family businesses often have an advantage – they operate from a core of strong values that guide every business decision they make – and they have a golden opportunity to be showcasing that,” Michaela Pogson continued.

The survey also revealed over half (59 per cent) of family businesses expecting notable revenue growth are acting on their ESG and sustainability strategies, demonstrating their willingness to embrace strategies for long-term success. A successful sustainability strategy can mitigate risks and create opportunities for innovation and growth, improve brand reputation, and retain talent. There are significant financial advantages to having a sustainable supply chain and prioritising sustainable decision-making to encourage a more loyal customer base.

The Family Business Survey Report was released on 19 September 2023 in celebration of Family Business Australia Day revealing the key challenges and focal areas for Australian Family Businesses. On 7 March 2024, Grant Thornton will be hosting an in-person event to discuss navigating and communicating ESG strategies in mid-sized and family businesses.

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