Decarbonisation, Climate & Nature

Addressing climate change and biodiversity loss, pivotal challenges for businesses and society, necessitates a proactive approach to reduce carbon emissions and foster a low-carbon, nature-positive economy. Decarbonization represents not only a response to policy and regulatory trends but also an opportunity for organizations to lead the transition to a net-zero future.

KPMG’s Decarbonisation services offer specialized climate risk and decarbonization advisory throughout the decarbonisation lifecycle. We cater to a broad range of sectors, including industrial manufacturing and real estate, as well as financial investors like banks, asset managers, and insurers aspiring for carbon neutrality. Our Climate and Nature Risk Consultancy extends beyond risk assessment, delivering comprehensive analysis and management solutions. We support financial institutions impacted by climate and nature-related risks and are expanding our services to high-emission sectors such as real estate and construction.

KPMG’s Decarbonisation team of multidisciplinary professionals offer the following services:

• Climate risk advisory, to measure, quantify and assess climate risks and opportunities under a range of climate scenarios, including the impact on business performance
• GHG baseline monitoring, performance evaluation and target-setting
• Decarbonisation strategy and action planning
• Decarbonisation performance disclosures and reporting
• Risk assessment of clients’ exposures to climate change and nature-related risks, including physical and transition risks, using localised risk assessment tools and models
• Risk and scenario analysis of the potential financial impacts of climate change and nature-related risks on clients’ investment portfolios, enabling them to make informed decisions about how to manage these risks
• Risk management strategy design, tailored to clients’ specific needs and investment portfolios, incorporating transitional risk management approaches and innovative solutions
• Reporting and disclosure on climate change and nature-related risks in compliance with relevant regulatory requirements

Our client, a major global shipping port operator, aimed to achieve net zero across their value chain by 2050. Faced with challenges in emissions data collection and significant scope 3 data gaps, they sought to validate their decarbonization target through the Science Based Targets Initiative (SBTi). We conducted emissions baselining aligned with GHG Protocol and SBTi standards and developed a customized emissions reduction model. This model enabled the client to assess the effectiveness of various reduction measures and adopt low-emission technologies.

We crafted a strategic net zero roadmap tailored to the client’s throughput expectations, investment willingness in low-emission equipment, and growth plans. Collaborating closely with the client’s stakeholders, we ensured their input and buy-in for the emissions reduction strategy. Our comprehensive approach resulted in a clear, actionable net zero roadmap, a robust emissions data integrity and collection methodology, and a customized modelling tool for informed decision-making. This effort culminated in the successful engagement of stakeholders essential for the implementation of the client’s decarbonization strategy.

Our client, a leading banking regulator in Asia, aimed to integrate climate risk into banking supervisory practices, with a focus on developing an online platform for climate risk data and analytical tools. This platform would enable banks to assess physical risks, particularly on real estate. We formed a cross-functional team of financial services, climate risk, ESG, and technology experts, and collaborated with external climate risk specialists, modeling vendors, and database service providers.

Our in-depth understanding of banking regulations guided the creation of a user-friendly platform, offering access to a comprehensive database and analytical tools for evaluating physical risks on residential and commercial properties. We leveraged our extensive experience in regulatory compliance within the banking sector to address implementation challenges, successfully deploying the solution to over 180 regulated financial institutions. This initiative significantly advanced the banking sector’s ability to manage and understand climate risks.