The Institute of Entrepreneurship and Private Capital at the London Business School recently hosted a Family Office Conference, focusing on climate change and its impacts. Renowned experts discussed various strategies for mitigating climate change, including sustainable investment, divestment from fossil fuels, and supporting pro-environmental policies.
Family offices’ business risk concerning climate change was also discussed, and early action was identified as a potential competitive advantage. The growing role of Environmental, Social, Governance (ESG) factors in family offices was also highlighted.
Dr. Ioannis Ioannou from the London Business School emphasized the crucial role that family offices play in promoting sustainable practices. He indicated that family-run businesses contribute significantly to the world economy and that their long-term investment perspectives put them at the forefront of understanding global economic dynamics.
According to an EY & University of St. Gallen study, family offices’ investment strategies are closely linked with their values, contributing not just to financial impact but also to a more sustainable future. Family offices, due to their multigenerational and long-term-oriented approach, play a vital role in driving global transition towards sustainability.
Dr. Ioannou encourages further research and dialogue on the role of family offices in promoting sustainability-focused business strategies. Greater awareness and endorsement of sustainable practices can drive future global economic growth.
More than 75% of multinational corporations now incorporate sustainability tracking and reporting within their frameworks. Family offices and businesses have a unique opportunity to lead the transition toward environmental and social sustainability. Most are setting and meeting sustainability goals across all business dimensions.
Family Offices, as private wealth management advisors, are key in this shift towards sustainability. They manage investments with an increasing emphasis on sustainability, educating family members about responsible investment, and directly influencing market trends towards sustainability.
Dr. Ioannou underscored the urgency of addressing the climate crisis, advocating for swift, enforceable measures to curb carbon emissions. He stressed collective responsibility and urged nations to uphold their commitments to the Paris Agreement.
Beyond immediate climate risks, other critical issues like biodiversity loss need serious attention. The concept of ‘planetary boundaries’ highlights these problems. Developed nations, as major contributors, must provide support to developing nations to combat these overwhelming challenges.
Family Offices are increasingly aligning with responsible investment practices, investing sustainably to yield both financial returns and positive impacts. A recent report noted that over 60% of Family Offices now integrate ESG factors into their decision-making, signaling a shift in traditional investment approaches and a transformation within the industry.
Some Family Offices are developing in-house models for assessing prospective investments’ environmental and social performance, and global standards are being developed for sustainable investment. Family offices recognize the potential to make a substantial societal impact while delivering solid returns.
