At the heart of the notion of sustainable development lies the very big idea of justice between generations.
What makes economic development either sustainable or unsustainable is the degree to which it not only produces substantive economic benefits for people alive today (in terms of jobs, improved infrastructure, investment in skills, plus all sorts of indirect economic multipliers), but does so in a way that does not undermine the prospects of future generations to do the same for themselves in the future. As the eminent German theologian, Dietrich Bonhoeffer, once said:
“The ultimate test of a moral society is the kind of world that it leaves to its children.”
I’ve been thinking a lot about that since taking part in a fascinating event organised by Forum for the Future with the Business Families Institute of the Singapore Management University (BFI @ SMU) at the beginning of May. Its focus was on succession in family businesses between one generation and the next, and what the relevance of sustainability might be in terms of influencing that succession process.
At one rather obvious level, sustainability should come much more easily to family businesses than to those businesses, big or small, where there is no family involvement. Parents focus instinctively on what their legacy is going to be for their children (and for their children’s children), and have a deep emotional interest in ensuring that any business interest in that legacy should be as resilient and potentially long-lived as possible. This is not so much a question of intergenerational justice as intergenerational self-interest!
Nothing wrong with that. I was very struck by the number of comments at the event which celebrated the fact that family businesses are not as vulnerable to the kind of chronic short-termism that dominates both today’s corporate practice and the way capital markets operate. Maximising short-term profit for face-less and often care-less investors may be the way mainstream capitalism operates today, but that makes little sense for a family business seeking to optimise economic wealth over generations.
This comes across loud and clear in the article that my colleague Anna Simpson wrote for our magazine, Green Futures, which highlights a number of specific examples of how sustainability is influencing that delicate process of ‘hand-over’ from one generation to the next.
A bit of history here. One of the most interesting projects that Forum for the Future did back in the 1990s was to work with a handful of large estate owners here in the UK to help them develop a new approach to ‘integrated asset management’ – looking at all the sources of wealth available to them (natural, social, human and manufactured, as well as financial) that underpin such long-lived enterprises. One of those partners was the Grosvenor Estate, which has been managed on a more or less continuous basis for centuries! As the Duke of Westminster pointed out to us at the time: “I think we can legitimately claim to know a thing or two about sustainability in practice.”
Which provides a telling contrast with Singapore, where the majority of family businesses are still into the second (or possibly the third) generation – at exactly the point where the pressures of a world struggling to cope with the challenge of creating wealth more sustainably are bearing down upon them.
I was hugely heartened by the readiness of all those present at the event (and of the dynamic BFI @ SMU itself) to face up to those pressures so creatively and with a real sense of purpose.