Responsible for more than 70 per cent of the world’s annual carbon emissions, cities must lead the way if we are to win the fight against climate change, finds a new in-depth Net-Zero Readiness Spotlight report by KPMG International.

“The way we design, build and operate our cities will determine whether we win or lose the climate change battle,” says Eric Wolfe, Infrastructure Partner and Cities Lead, KPMG in Canada. “Cities have a greater capacity than they even realize to accelerate the transition to a greener and more sustainable future. The key is to look beyond simple measures that they directly control and understand how their decisions drive all emissions produced within their communities. This will require mayors and councils to be bold, resolute, and think differently.”

The KPMG report, in collaboration with United Cities, evaluates the status and progress of 50 cities in the reduction of greenhouse gases (GHG) across the five biggest emission sectors – energy, mobility and connectivity, built environment, industry, and waste and sanitation. Over half of the cities are capitals and include coastal, landlocked, and small island urban areas.

Using a rigorous, weighted methodology, KPMG assessed each city on 48 key “green” globally recognized indicators, such as per capita GHG emissions, greenspace per capita, green building ratings, electric vehicle transport, circular economy incentives, food waste, public transportation, and use of smart water meters.

The cities were grouped into “pacesetters” and “followers”. Pacesetter cities have been able to move towards net zero by taking steps to decarbonize in each of the five sectors. Some of the followers are megacities with very large and growing populations, rampant urban sprawl, and limited public transport. They typically rely on policies that are counterproductive to fighting climate change, such as low-density suburban developments and fossil fuel subsidies.

In Canada, Montreal, Toronto, Quebec City, and Vancouver were among the pacesetting cities, although each are at various stages of their net-zero transition journey with much still to accomplish, says Mr. Wolfe.

Buildings and homes are the third-largest source of GHG emissions in Canada behind the oil and gas and transportation sectors, according to Environment and Climate Change Canada.

“Achieving net zero at a neighbourhood or community scale is as important as top-down approaches that cities have in place,” says Stephen Beatty, Global Head of Infrastructure and Head, Global Cities Centre of Excellence, KPMG International, and Partner, KPMG in Canada. “Policies, projects, and initiatives can be tested at the local level and used to trial innovative approaches to mitigate climate change risks, engage participation of citizens, and create a sense of collaborative ownership in the transition to net zero.”

“It’s about embedding net zero in how cities decide on everything from density, public transport, energy sources, new buildings, retrofitting old buildings and green spaces to waste and water management,” he says. “With carbon emissions in the Greater Toronto and Hamilton Area, for example, on track to reach pre-pandemic levels of carbon emissions, it’s imperative that cities review, consider, and implement policies from a sustainability lens.”

The KPMG report notes that some cities, like Barcelona, are leveraging digital twin technologies to test, measure and track the impact of their decarbonization plans and strategies. Using digital twins, KPMG can create virtual versions of the urban environment and leverage artificial intelligence to help cities visualize the impact of climate change and identify options and inform their climate actions.

“We hope to spur the kind of dialogue and debate cities should be having about climate finance, climate equity, and a just transition towards net zero,” says Mr. Beatty. “The more cities can assess, monitor, and evaluate the impact of their climate action plans, the more likely they are to access climate finance and win public support.”

The full report is available below.

About KPMG in Canada

KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country.

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For media inquiries:

Caroline Van Hasselt
National Communications and Media Relations
KPMG in Canada
(416) 777-3328