Planet

Climate change is an imminent threat to human well-being and the health of the planet, with extreme weather events such as heatwaves, droughts and floods happening frequently both in China and across the globe.

To address the climate crisis, China has emphasised its strong commitment to promoting green, circular and low-carbon development, as highlighted at the 20th National Congress of the Communist Party of China. The transition towards a green economy and sustainable development is essential for reaching China’s 'dual carbon' goals, and this requires every individual and organisation to be actively involved.

KPMG China is committed to being part of this change and has a key role to play in the country’s decarbonisation journey. Our climate commitments encourage us to take proactive and innovative steps to decarbonise within our operations and along our value chain.

As part of our commitment to become a net-zero carbon organisation, KPMG has a series of climate actions:

• Set a 1.5°C science-based target (SBT) which will focus on achieving a 50% reduction of KPMG’s direct and indirect greenhouse gas (GHG) emissions by 2030
• Source 100% renewable electricity across the global organisation by 2030

To support this climate goal, we set out an environmental policy in 2021, which outlines our commitment to reducing our environmental impact through policy implementation, stakeholder engagement and education. The policy sets out the principles and requirements as to how we should manage different key environmental areas such as energy, greenhouse gas emissions, waste, water and our supply chain, among others.

In addition, we have obtained the ISO 14001:2015 certification for environmental management systems. This demonstrates our commitment to managing the environmental impact of our business activities and operations, helping us meet clients' rising expectations of our environmental performance.

Starting from 1 October 2022 (FY23), KPMG China implemented an internal carbon price (ICP), which is seen as an enabler to help us reach our net-zero climate target. The ICP applies the ‘polluter pays’ principle and is a fee charged to responsible departments based on business travel emissions from air travel, rail travel and hotel accommodation.

With business travel making up 38 percent of net carbon emissions in FY22, the ICP aims to drive behavioural change and decrease emissions by reducing non-essential travel, encouraging low-carbon options and ensuring carbon emissions are factored into our decision-making.

The funds generated through the ICP will be used for decarbonisation projects to avoid, reduce and/or offset our carbon emissions. We will select and support suitable decarbonisation initiatives ranging from energy-saving, green travel initiatives and nature-based solutions to carbon removal projects.

Every year we collect data from all our offices, in line with the Greenhouse Gas Protocol (GHG Protocol) guidelines, to determine the firm's carbon emissions. Key climate performance indicators are reviewed and reported to our stakeholders through this report annually.

In FY22, our overall carbon emissions (net of RECs) amounted to 46,318 tCO₂e, up by 5.5% compared to FY21, and down by 24.3% against our FY19 baseline. It is important to note that with our headcount growth of 15.3%, our per capita net emissions have dropped from 3.51 tCO₂e in FY21 to 3.19 tCO₂e in FY22.

With over 42% of our net carbon emissions coming from the 'purchased goods and services' category, working closely with our suppliers is critical for our decarbonisation strategy and sustainable procurement management.

In FY22, KPMG China continued to purchase 100% renewable electricity through buying renewable energy certificates (RECs). This is a commitment that we have fulfilled since FY21. All of our renewable electricity in FY22 was sourced through approved renewable energy certificates (I-RECs), which support renewable energy projects in China.

We understand that there is more we can do. We will continue to work with our Workplace department to lease offices in green buildings that can potentially provide direct sources of renewable electricity supply, as well as with our building management to improve the energy efficiency of buildings.

While sourcing renewable electricity is vital, we believe saving energy is also key. In FY22, KPMG China implemented energy-saving measures across our firm, for example, switching off office lights earlier (if not in use), installing and replacing LED lights, and installing timers and motion sensors. All new offices opened in FY22 have a timers control system and/or motion sensor system in place to help save energy.

To help our people learn more about their carbon footprint in their daily life, KPMG China launched a carbon tracker developed by our technology team at the KPMG Digital Ignition Centre (KDi). The carbon tracker, which is available on our KPMG Wellbeing App, allows our people to calculate their carbon emissions from transport, food, utilities and clothing, encouraging them to adopt a more sustainable lifestyle.

A transition towards a circular economy is essential to achieve net-zero emissions. As KPMG is a professional services firm and does not produce physical products, a large part of our impact originates from our business operations, which is associated with three main areas - information technology, offices and property services, and events and catering.

Launched in 2021, our Green Corner concept is an iconic project to promote circularity. They offer space for our people to exchange and donate unwanted items in good condition, including second-hand books, clothes, toys and stationery. As at 30 September 2022, a total of eight Green Corners have been set up in our offices in Hong Kong, Chengdu, Xiamen, Dongguan and others.

Nature and business are interdependent and interconnected. We believe it is important for us to collaborate with non-profit organisations (NPOs), as their technical expertise helps us gain a deeper understanding of how our actions affect the natural environment. Over the years, we have supported nature conservation projects and collaborated with NPOs to help restore and improve freshwater, wetland, forest and ocean ecosystems.

On a global level, KPMG is proud to join the Taskforce for Nature-related Financial Disclosures (TNFD). Over the next few years, our global team will help the TNFD develop a risk management and disclosure framework for financial institutions to report and respond to evolving nature-related risks. This will help enhance the services we deliver for clients.

Following the success of our first artificial wetland in Xiadong village, we are planning to deploy a second community-based freshwater project in collaboration with Conservation International in Shuiku village in Guangdong province.

These projects aim to protect water resources and improve the water quality in the Dongjiang Basin, which serves as a major water source for the GBA. More importantly, the projects can contribute to rural revitalisation by creating local employment opportunities through ecotourism.