by Michael Matthews, Investment Director – Investec Wealth & Investment UK
Investec Wealth & Investment works with entrepreneurs to grow their businesses and meet their financial goals in a way that reflects their values. Here, Investment Director Michael Matthews explains why sustainability is more important to founders and family businesses than ever before.
The global pandemic has highlighted social inequalities and the need for resilience and this has increased the motivation for businesses to contribute to cleaner and fairer communities.
However, sustainability has been on the agenda for a number of years. In 2016, the UN set out 17 goals that it believes will create a greener, fairer future for all. These include aims such as responsible consumption and production; affordable and clean energy; and quality education.
Because of the link between sustainable operations and long-term financial resilience, investors are increasingly embedding non-financial factors into their evaluation of company performance and valuations too. In response, businesses are including Economic, Social and Governance (ESG) targets into their strategies.
However, founder and family-led businesses often have a number of unique attributes and motivations that set them apart from other firms.
Firstly, their businesses are nurtured for future generations and there is a personal commitment to ensuring long-term viability.
Secondly, the companies are often regarded as a reflection of the values of the people behind them. Many founder or family-led businesses have close connections to their surrounding communities and the desire to support the people and areas that drive their operations is genuine.
When changes are needed, family and founder-led businesses are well-placed to make them because there is likely to be a greater degree of control over the decision-making process: owners may be able to act more quickly and decisively.
The desire for change might be motivated by successors.
A number have studies have highlighted that young people place a high value on sustainability and that future generations of business leaders will want to operate within companies that have a positive purpose.
Finally, given that entrepreneurial and family companies are the most common type of business in the UK, the impact of their actions cannot be underestimated.
Entrepreneurs and families who can define and articulate their goals, and express their values give their businesses a strong foundation for long-term competitive advantage and sustainability. To achieve this, it’s important to work with business partners who understand your motivations and personal goals.
At Investec Wealth & Investment we work with a number of entrepreneurs to help them plan for the future and we do this by understanding their values and risk appetites. If we can help you with your personal or business needs, please get in touch today.
The value of your investments can go down as well as up and you may not get back the full amount invested. Your capital is at risk. The information contained in this publication does not constitute a personal recommendation.
To find out more about how Investec can help, please contact
Michael Matthews, Investment Director, Birmingham