“In the face of a global climate crisis, every country, every company, and even every individual, has an undeniable responsibility. At KPMG China, we continue to regularly review and refine our decarbonisation strategies and initiatives to reduce the environmental impact of our operations and value chain. This is driving KPMG China to advance on the path towards green transformation through strategy, management, policy and employees’ behavioural change.“
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.
Setting an internal carbon price
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.
Greenhouse gas (GHG) emission (tCO2e) in FY2022
Scope 1 emissions
Scope 2 emissions
(net of RECs)
Scope 2 emissions
Scope 3 emissions
% change of GHG emissions
(net of RECs)
FY22 VS FY19
RECs means renewable energy certificates.
Reducing our supply chain emissions
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.
CDP Supply Chain programme
In FY22, we participated in the KPMG global CDP Supply Chain programme for the first time and successfully engaged 23 selected suppliers to submit their environmental data through CDP questionnaires. This programme aims to enable us to derive actionable insights, keep track of progress, inform decisions, and identify risks and opportunities in our supply chain. Our global CDP report was available to us to provide more insights into our supply chain.
Our next plan is to hold a national supplier communication webinar to engage more suppliers to participate in our FY23 CDP programme. This webinar also aims to help our suppliers better understand and align with KPMG’s climate goals and sustainability expectations, setting the tone to foster collaboration for supply chain decarbonisation.
Sustainability supplier check
With the newly launched KPMG digitalised Procure-to-Pay system, we have significantly reduced our carbon footprint and paper consumption, as well as improved our operational efficiency through automated paperless processes.
Decarbonisation initiatives, such as digitalisation or sustainable material selection processes, are being planned to further curb our supply chain emissions.
KPMG digitalised Procure-to-Pay system
We piloted a sustainability supplier check on top sourcing projects during FY22. In this pilot, we engaged 85 suppliers and reviewed the top 45 suppliers’ sustainability performance to inform strategic sourcing decisions. This process will be incorporated into the process for top sourcing projects starting from 2023.
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.
Launch of carbon tracker
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.
Promotion of circularity
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.
Shenzhen Mangrove Wetlands Conservation Foundation
Launched in 2020, our two-year nature conservation programme with Shenzhen Mangrove Wetlands Conservation Foundation (MCF) has successfully created 7,000m2 of habitat for winter migratory birds and restored/maintained at least 5.2 hectares of mangrove wetlands. Over 3,000 public volunteers and more than 400 KPMG colleagues have joined different volunteering activities to help monitor and restore the wetland ecosystem.
In 2021, a total of 16 volunteers participated in a citizen scientist project on plant monitoring in the memorial garden of Futian Mangrove Ecological Park. They helped provide valuable data for MCF to further analyse the plant growth cycle, plant community succession and alien plant invasion.
Looking ahead, we will launch the second phase of the programme with MCF to scale up our efforts to cover more areas in the GBA, inviting more people from different regions to join.
Across the globe, expectations on climate risk management are becoming ever more sophisticated. At a global level, KPMG plays an active role in the Taskforce for Climate-related Financial Disclosures (TCFD) to provide clear recommendations on how organisations should disclose consistent information on climate-related financial risk and the potential impacts.
Globally, KPMG conducted a TCFD-compliant scenario analysis to explore our exposure to transition risk across the largest countries and territories in which KPMG firms (including KPMG China) operate. The assessment financially quantified the risks and opportunities arising from climate change and the low-carbon transition. The outcomes of this assessment will form part of the evaluation of our global climate strategy and performance.
At KPMG China, we help our clients advance their sustainability journey and identify climate risks and opportunities through our professional ESG services. Our ESG team has been using KPMG Climate IQ, a multi-industry risk management tool developed by KPMG in the UK, to provide leading-edge climate economic analysis to deliver a rich set of management information to inform strategy, risk and financial reporting.
In China, our ESG team is working with climate experts from KPMG in the UK and Australia for a smooth implementation. These engagements serve as solid credentials for KPMG China in climate-related risk assessment and disclosure to showcase our capabilities to support clients on their climate change reporting journey.