Shifting Priorities: Millennial Business Heirs Drive Sustainable Investments
Second- and third-generation family businesses in Asia are increasingly embracing greener and more sustainable investments, driven by millennial business heirs. These young entrepreneurs are charting a different path from their forefathers, prioritizing social and environmental impact alongside profitability. They recognize that their family’s wealth can serve as a catalyst for positive transformation and address societal needs beyond government aid. By incorporating environmental, social, and governance factors into their investment decisions, they advocate for driving positive change while ensuring financial viability for their businesses.
Conflict and Collaboration: Generation Gap in Family Businesses
The shift towards sustainable investments has not come without its challenges. The gap between the comfortable lives of millennial heirs and their parents’ experiences of growing up poor has led to conflicts within family businesses. Traditional profit-focused models clash with the younger generation’s desire to prioritize social and environmental impact. However, it shouldn’t be assumed that there is always a conflict between old and new ways of thinking. In some cases, the previous generations are the ones encouraging bolder and more innovative approaches to ensure the ongoing success of their businesses or philanthropic efforts.
Breaking Tradition: Young Entrepreneurs Challenge Profit-Focused Models
For millennial heirs like Abe Lim from Malaysia, their youthful idealism clashes with their parents’ profit-focused business models. Lim wanted to prioritize social and environmental impact over monetary gains, which was a new concept for her father’s generation. Despite suggesting initiatives such as turning plastic waste into biofuels, Lim faced challenges when scientific viability didn’t align with economic feasibility. Eventually, Lim decided to leave her father’s company and start her own venture, Purpose Plastic, which recycles discarded plastic into home decor and other products.
Impact Investing: Driving Positive Change Among Second- and Third-Generation Business Heirs
Millennial business heirs in Asia are reshaping the perceptions of business owners, emphasizing the need for companies to make a positive social impact. They believe that their family’s wealth can be used as a catalyst for positive transformation and go beyond what government aid covers. By integrating environmental, social, and governance factors into their investment decisions, they aim to drive positive change while ensuring the financial viability of their businesses. Through impact investing, they are proving that it is possible to align financial returns with social and environmental goals.
The Power of Dialogue: Communicating Innovative Approaches to Older Generations
Persuading older generations to adopt new ways of thinking requires effective communication and a deep understanding of generational differences and perspectives. Second- and third-generation family businesses encourage their elders to explore new ideas and embrace innovative approaches by engaging in open and respectful dialogue. This approach allows them to bridge the generation gap and convey the benefits and feasibility of socially conscious investing. By translating knowledge about sustainable investments and impact strategies, young entrepreneurs like Fernando Scodro are successful in convincing their families to adopt new approaches to wealth management and business practices.
Analyst comment
Positive news: Shifting Priorities: Millennial Business Heirs Drive Sustainable Investments
Market analysis: The increasing embrace of greener and more sustainable investments by Asian family businesses, driven by millennial heirs, will lead to a shift in investment priorities. By prioritizing social and environmental impact alongside profitability, these businesses will drive positive change and ensure long-term financial viability. This trend aligns with the growing demand for sustainable and socially conscious investments in the market.