The Sustainability Indicators for Family Business (SIFB)
Measurable, comparable, transparent
The joint global initiative FBSD offers family businesses ways and means to integrate sustainability into their conventional business models and to evidence their contribution to the Sustainable Development Goals (SDGs). This includes the Family Business Sustainability Pledge, which advocates an environmental, social and governance (ESG) roadmap that signatories engage to act upon. The Sustainability Indicators for Family Business (SIFB) provide a template to guide and assess the implementation of and reporting on actions by individual companies, help spur sustainability considerations among business owning families and serve as a benchmark for overall assessment of the results and impact of the global initiative. SIFB helps commit signatories to champion a more transparent sustainability path that can be measured and reported.
What are the indicators?
The Sustainability Indicators for Family Business (SIFB) build upon UNCTAD’s Guidance on core indicators (GCI) for entity reporting on contribution towards the implementation of the SDGs. The core indicators were developed through extensive consultations and consensus building among key experts and endorsed by UNCTAD’s Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). The 33 core indicators outline the base-line reporting that companies would need to provide to enable governments and other stakeholders to evaluate the contribution of the private sector to the implementation of the SDGs.
To complement the reporting framework of the core indicators, FBN elaborated additional disclosure elements to capture and recognize family business’ efforts in contributing to the implementation of SDGs.
Family businesses have distinctive governance structures, ownership norms and family dynamics that have an impact on performance. As such it is critical that sustainability indicators for family businesses recognise the unique attributes of family business models and consider measurements that guide, further advance sustainability practices, and facilitate contributions to the SDGs.
The Polaris Indicators for Family Business examine a family business’ performance on specific sustainability practices and are designed to complement the UNCTAD Core Indicators. They explore the company’s culture, policies and practices on specific governance, supply chain, environmental and community practices, and aim to measure their impact on the wider ecosystem. The Polaris Indicators are developed by FBN and leverage the Polaris Impact Assessment, B Corp’s B Impact Assessment and the CISL Rewiring the Economy framework.
The indicators are grouped into four areas – governance, supply chain, environmental performance and community impact. The Polaris Indicators provide a suggested mapping of the SDGs to a company’s products, services and operations. The mapping is by no means exhaustive and companies may identify additional or alternate SDGs that are more relevant to the enterprise.
Collectively the Polaris Indicators and UNCTAD Global Core Indicators (GCI) inform the Sustainability Indicators for Family Businesses (SIFB).
Several family firms have already reviewed and applied the SIFB and the findings are being documented in a series of case studies. The reporting framework is a living document and will be periodically reviewed considering its applicability for family firm entities.
How to apply the indicators?
Several FBN members are currently piloting the SIFB framework within their family firms. Their case studies will provide input to the development of a reporting platform. Family businesses wishing to review the SIFB, may download them here and commence their own internal process.
How can family business benefit from the SIFB?
The SIFB will enable family businesses to identify areas of action, as well as measure and track their progress on key ESG (Environmental, Social and Governance) metrics that are aligned to the SDGs. Reporting on these indicators highlight potential areas of risk and opportunity and foster transparency.
How will information be gathered and used?
The SIFB metric sets represent minimum disclosures that companies need to provide to enable governments to evaluate and recognize the contribution of the private sector to the implementation of the SDGs. UNCTAD and FBN are developing an online platform to facilitate SIFB reporting by family business entities and to gain an indication of their sustainability performance. Hence it is anticipated that the responses will help inform relevant stakeholders of the contributions of family businesses to the SDGs. Please note that the family business information from the platform will be anonymous and aggregated. Individual responses will not be shared, unless specifically authorized by the participating family business.