Majority of family businesses set climate goals

10 July 2023, Munich. The major German family businesses have climate goals on their agenda. A total of 66 per cent are in the process of setting a climate goal for themselves. Only just under 16 per cent have not yet set themselves a climate goal. This figure stands at 29 per cent for large non-family businesses.

Those who generally have a climate goal in the works usually strive for complete climate neutrality or at least carbon neutrality, especially in their own plant and for purchased energy, and less frequently for upstream and downstream supply chains. In particular, industrial companies in energy-intensive sectors have embarked on this journey. The amount of planning, personnel and time required is considerable. As a rule, the companies aim to achieve their goals by 2030.

The Fraunhofer Institute for Industrial Engineering in Stuttgart determined these results for the Foundation for Family Businesses by surveying 600 companies of various sizes and sectors, half of which were family businesses.

Many are just getting started

At first glance, the results when considering all respondents are sobering. This is because only 20 per cent of all companies have set themselves a clearly defined climate goal. However, a further 30 per cent state that they are currently in the process. They are motivated to do so by higher energy and carbon prices, social pressure, regulatory requirements and their own values. First and foremost, however, they are struggling to find a sustainable business model.

However, family businesses in particular consider the risks on the path to climate neutrality to be high. The level of investment necessary, the question of profitability and the uncertain legislative and regulatory frameworks are challenging them.

Concerns about competitiveness

As a result, family businesses face extreme uncertainty when it comes to planning while at the same time worrying about their own competitiveness. Family businesses choose offsetting for a lower proportion of greenhouse gas emissions (23 per cent compared to 34 per cent for non-family businesses). The intrinsic motivation of management and the more frequent use of employee initiatives stand out.

The Fraunhofer Institute’s research team recommends the following sequence when devising a strategy: track, reduce, substitute, offset. 63 per cent of family businesses with a climate goal state that they systematically track their emissions; this is 14 percentage points more than non-family businesses.

Recommendation: structures close to senior management

The study’s recommendations also emphasise the importance of establishing structures close to senior management in order to achieve a high level of acceptance among employees. Clear communication to the public and politicians regarding the support required also plays an important role. “The researchers and I both call on politicians to create clear and stable frameworks to enable safe and sustainable investments in renewable energies and infrastructure”, says Rainer Kirchdörfer, Chairman of the Foundation for Family Businesses.