Good Business Charter: A Practical and Accessible ESG Solution for Family Firms
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By Jacqueline You, Jenny Herrera, Nicholas Pleace, and Bob Doherty
The report, ESG in Family Firms, provides an informative and comprehensive analysis of the environmental, social, and governance (ESG) landscape for UK family businesses. It highlights key challenges, opportunities, and frameworks to guide family firms in improving their ESG practices. One of the challenges highlighted in the report is that future UK (and EU) ESG standards and reporting requirements could place a significant administrative burden on SMEs, particularly due to their limited resources, workforce, and data management capacity. Currently, ESG frameworks are primarily designed for and better suited to large organisations, leaving uncertainty around future ESG requirements for UK SMEs, including family-owned businesses.
One potential solution is the Good Business Charter (GBC) – a simple, cost-effective accreditation designed to promote responsible and sustainable business practices in the UK across ten key areas:
Similar to the Wates Principles, the GBC provides a strategic and practical governance framework that helps businesses articulate their purpose and engage meaningfully with stakeholders. However, it differentiates itself by offering a mechanism that can capture and showcase their values to customers, employees, investors and other stakeholders through its accreditation system in an organic and sustainable manner. This makes the GBC particularly relevant in today’s business environment, where transparency, ethical leadership and social impact are increasingly influencing consumer and investor decisions.
Family Businesses, the Good Business Charter and ESG
Family businesses and the GBC share a strong alignment in Environmental, Social, and Governance (ESG) principles, as both emphasise long-term sustainability, ethical business practices, and community engagement. Family-owned firms often adopt a multi-generational outlook, prioritising sustainable operations, employee well-being, and responsible governance, which closely aligns with the GBC’s commitment to fair employment, ethical supply chains, and environmental responsibility, and corporate transparency. Their deep-rooted connections to local communities and commitment to trust, integrity and accountability make them well-suited to the GBC’s structured framework, strengthening their ESG credentials with stakeholders.
In November 2024, the School of Business and Society at the University of York published an Insight Report: Tracking Success for the Good Business Charter (GBC): Developing an effective approach, which highlighted the effectiveness of the GBC in supporting businesses and organisations. As highlighted by Professor Kiran Trehan, Pro-Vice-Chancellor for Enterprises, Partnerships and Engagement, University of York,
“The GBC is unique in its ability to fuse ethical values with business success, proving that companies can thrive without compromising their principles. It empowers businesses to align with social and environmental responsibilities while staying competitive, demonstrating that sustainable growth and profitability can go hand in hand.”
As sustainability and regulatory expectations continue to evolve, the GBC has the potential to further support businesses – particularly family businesses – by adapting to emerging ESG requirements and addressing the growing needs of responsible business conduct. The Insight Report also provides a comprehensive evaluation of how the GBC aligns with four key frameworks:
the voluntary Sustainable Development Goals[1];
regulatory ESG frameworks[2];
the regulatory Corporate Sustainability Reporting Directive[3] ;
and the voluntary United Nations Global Compact[4].
This assessment places the GBC within the ongoing discourse on responsible and sustainable business practices, highlighting its role in complementing these broader global and regulatory frameworks while also identifying opportunities for improvement.
The GBC and the SDGs
Several of the areas covered in the GBC such as environmental responsibility and ethical sourcing are strongly aligned with the Sustainable Development Goals (SDGs); over 40 per cent of the SDGs directly map onto the GBC. Conversely, specific SDGs such as those relating to ‘Decent Work and Economic Growth’ and ‘Peace, Justice and Strong Institutions’ display an even stronger alignment with GBC areas with over 60 per cent of their targets directly corresponding with the GBC components.
The GBC and ESG
In the current climate, it's strategically important to underscore the business advantages of ethical conduct, particularly its ability to attract affluent consumers who are increasingly driven by ESG factors. A mapping of the GBC onto the three ESG factors (environment, social and governance), first introduced in the 2004 report ‘Who Cares Wins: Connecting Financial Markets to a Changing World’, shows 90 per cent of the areas covered in the GBC have either strong or moderate alignment with the social and governance aspects of ESG, whilst also encompassing environmental considerations through its ‘Environmental Responsibility’ component.
The GBC and the Corporate Sustainability Reporting Directive
The Corporate Sustainability Reporting Directive (CSRD) is a regulatory framework introduced by the European Union that came into effect on 5 January 2023. It requires a wide range of large companies, including listed small and medium-sized enterprises (SMEs) and certain non-EU companies with revenue exceeding EUR 150 million on the EU market to report on their social and environmental impacts. The CSRD aims to provide investors and stakeholders with transparent and standardised information on companies’ sustainability practices, enabling them to assess the financial risks and opportunities associated with sustainability issues.
The Insight Report highlights that the GBC demonstrates a strong focus on social elements, with over 90 per cent alignment with the social component of the European Sustainability Reporting Standards (ESRS), which businesses must comply with under the CSRD. Additionally, the Insight Report identifies areas for improvement, including enhancing environmental criteria and incorporating reporting mechanisms to strengthen the GBC’s role in supporting the national ESG framework as it continues to evolve.
The GBC and the UN Global Compact
The Insight Report also mapped the GBC onto the UN Global Compact, an international voluntary initiative based on commitments from CEOs to adopt sustainable practices and support UN goals. The mapping analysis found that just over half of the areas covered in the GBC are not aligned with the UN Global Compact principles with the most significant gaps in the environmental and anti-corruption areas. This disparity highlights key differences between the two frameworks. While both are frameworks designed to promote ethical and sustainable business practices, the GBC offers a formal certification process for businesses that meet its criteria, allowing them to be recognised as Good Business Charter members. This accreditation signals to customers, employees, suppliers and stakeholders that the company is committed to operating responsibly and ethically. In contrast, the UN Global Compact is a voluntary framework with broadly defined principles and no formal certification process. While it encourages businesses to align with its ten principles, it does not offer the same level of structured accountability or recognition as the GBC. This distinction underscores the GBC’s value as a practical and measurable tool for businesses, particularly those seeking tangible ways to demonstrate their commitment to responsible practices.
Concluding Thoughts
As highlighted in the Insight Report, the Good Business Charter plays a critical role in promoting ethical business and practices and responsible governance across diverse organisations. It serves as both a pragmatic framework for ethical practice and a benchmark for responsible business operations, helping businesses embed tangible values that enhance credibility, strengthen governance, and drive long-term sustainability.
For family businesses, these principles are particularly relevant and impactful, as they align closely with their emphasis on legacy, long-term sustainability and ethical commitments. The GBC offers a structured yet adaptable framework that enables family firms – whether small and medium-sized enterprises or large, multi-generational businesses – to integrate their traditional values with evolving regulatory and sustainability expectations. As the GBC framework continues to evolve, it presents an opportunity for family businesses to actively engage in shaping a more sustainable future while reinforcing their core values and leadership in responsible business practices.
The GBC evaluation report, ‘Tracking Success for the Good Business Charter (GBC): Developing an effective approach’, can be accessed here.
FBRF’s report, ‘ESG in Family Firms: A Review of Research, Regulations, and Practice Guidance’, can be downloaded here.
Sources
[1] UN SDGs: https://www.un.org/sustainabledevelopment/news/communications-material
[2] ESG principles: Adapted from https://doi.org/10.3390/su132111663
[3] https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:32023R2772
[4] UN Global Compact: https://unglobalcompact.org
About the Authors
Dr. Jacqueline You, Assistant Professor in International Business, Entrepreneurship and Strategy, School for Business and Society, University of York
Professor Nicholas Pleace, Associate Dean for Research and Impact, School for Business and Society, University of York
Professor Bob Doherty, Dean of the School for Business and Society, University of York
Jenny Herrera, CEO of Good Business Charter