Can Australian Family Businesses Achieve High Levels of Sustainability?
Dr. M.A. Farjoo – intellcert Australia / New Zealand
#AustralianBusiness #FamilyBusiness #Sustainability #GreenBusiness #BusinessGrowth #EcoFriendly #SustainableFuture #CorporateResponsibility #SmallBusiness #BusinessInnovation #AustraliaEconomy #ESG #SustainableDevelopment #BusinessSuccess
Small and family-owned businesses power Australia’s economy. In fact, over 93% of businesses in Australia employ fewer than 20 employees [1]. This unique composition gives our economy its resilience but also presents some real challenges when it comes to innovation and sustainability.
At MH Inspires, as the ANZ arm of intellcert GmbH, we understand the potential and passion that drives family enterprises. We also recognise the structural and cultural barriers that prevent them from reaching their full sustainability potential. Drawing on recent academic and policy research, this article explores the path forward.
Understanding the Nature of Family Businesses
Family businesses are often guided by more than just profit. They carry a legacy built over generations, where values, relationships, and long-term thinking are deeply embedded in decision-making. This outlook aligns naturally with the principles of sustainable development, which calls for a balance between economic success, environmental responsibility, and social impact.
However, this strength can also present internal challenges. Many family businesses are characterised by informal governance, overlapping roles between family members, and decision-making driven by emotion or tradition rather than data and structure. These unique dynamics can make it challenging to implement systematic sustainability strategies.
Succession planning is another well-known challenge. As businesses transition from one generation to the next, unclear roles, resistance to change, or lack of preparation can disrupt continuity and innovation. Without robust structures, the long-term vision can get lost in the day-to-day operations.
Sustainability: A Natural Fit but a Challenging Journey
Sustainability in business isn’t just a trend, it’s an imperative. John Elkington’s Triple Bottom Line framework emphasises that businesses must be accountable for economic, social, and environmental outcomes.
The recent study by Werner-Lewandowska, Wiecek-Janka, and Pawlowski [2] reveals that family businesses embrace sustainability in principle, especially given their focus on long-term impact. Many already engage in practices like community investment, clean technology adoption, or environmental education initiatives.
However, the study also found that most family businesses struggle to translate these values into high levels of sustainability maturity. While they may know sustainability goals, implementation often lacks structure, continuity, or measurement. As a result, many family firms remain in the early stages of sustainability adoption, described in the study as “Laggards” or “Followers” [2]:
- ML1 – Laggards: Minimal or no sustainable practices,
- ML2 – Followers: Sporadic or informal practices,
- ML3 – Innovators: Structured but limited sustainability efforts,
- ML4 – Potentials: Embedded sustainability in operations,
- ML5 – Champions: Leaders in sustainability, ready for circular economy practices.
The Sustainability Maturity Model (SM4FB)
The researchers developed a five-level Sustainability Maturity Model for Family Businesses (SM4FB) to better understand where family businesses stand and how they can grow. This model provides a roadmap from minimal sustainability efforts (Level 1) to fully integrated, circular economy-ready businesses (Level 5).
The study found that reaching the highest level of sustainability maturity is rare. Only businesses with long histories (30+ years), larger workforces, manufacturing profiles, and experienced decision-makers consistently reach Levels 4 or 5. Most others remain in Levels 1–2, often due to limited resources, experience, and structured processes.
Australia’s Structural Challenges: Small Businesses, Big Hurdles
This brings us to the Australian context. According to the recent Barriers to Collaboration and Commercialisation report by Industry Innovation and Science Australia (IISA) [1], the structure of our business environment makes achieving sustainability maturity especially difficult.
Australia’s economy is heavily skewed towards micro and small businesses. These businesses are often run by owner-operators with limited time, cash flow, and capacity to implement new systems or take on risk. Many operate as lifestyle ventures without a strong desire for aggressive growth or innovation. The IISA report notes that only 5–15% of SME leaders aim to grow into multinational businesses.
This lack of scale, combined with limited access to capital and skills, weakens businesses‘ ability to adopt or scale sustainability practices. It also leaves them vulnerable to being left behind in an increasingly sustainability-driven global economy.
The Missing Link: Quality Management Systems (QMS)
So, how can family businesses overcome these challenges and move toward higher sustainability maturity?
One key solution is the adoption of Quality Management Systems, particularly frameworks like EN ISO 9004:2000, which go beyond compliance and focus on performance improvement and long-term success. ISO 9004 guides positioning your entire organisation for excellence. It encourages businesses to formalise processes, develop clear leadership strategies, and continuously improve. In the context of sustainability, a QMS can:
- Help measure and manage sustainability indicators,
- Systematise environmental and social goals,
- Foster innovation through structured decision-making,
- And build trust with customers, investors, and partners.
Implementing a QMS does require investment. However, the return is significant, especially when tied to increased efficiency, better risk management, improved reputation, and greater resilience in the face of market change.
The Way Forward: Building Sustainable Legacies
It’s time to ask how we can ensure that family businesses – the heart of the Australian economy – aren’t left behind in the global shift toward sustainability.
At MH Inspires, we believe the answer lies in:
- Building awareness of sustainability maturity and why it matters,
- Offering practical training and coaching on QMS implementation,
- Helping businesses benchmark their current practices and develop a roadmap forward,
- And connecting family businesses with the certification, tools, and support they need to innovate and grow sustainably.
Let’s Talk About Your Business
Whether you’re a second-generation family firm looking to strengthen your legacy or a growing business wanting to align with global sustainability standards, we’re here to help. MH Inspires Pty Ltd as a partner of intellcert GmbH, a certification body headquartered in Berlin, offers consultation and training to support:
- Sustainability strategy development,
- Quality Management System implementation,
- Certification readiness (ISO 9001, ISO 14001, ISO 45001),
- And long-term performance improvement.
Reach out today for a discovery session, and let’s explore how to future-proof your business through sustainability and quality.
References:
- https://www.industry.gov.au/publications/barriers-collaboration-and-commercialisation
- K. Werner-Lewandowska, E. Wiecek-Janka, and G. Pawlowski, “Determinants of Sustainability Maturity in Family Businesses,” Sustainability, vol. 17, no. 5, pp. 1818-, 2025, doi: 10.3390/su17051818.
