Governance Chapter - Our Impact Report 2022

We always set the highest standards of integrity, quality and ethics and want to be the clear choice for our customers. Our values of Integrity, Excellence, Courage, Together and For Better, which are anchored in the KPMG network worldwide, are undertaken at a national and international level. These five values are at the heart of our daily actions and form our canon of values. They form the basis for KPMG’s inclusive and diverse culture. They are therefore an obligation for us in our personal and professional behaviour.

As an auditing company, we are subject to special national and international statutory and professional regulations. They relate to the organisation of operational practice as well as the implementation and handling of our services. In order to comply with these regulations, we see one of our main tasks in further promoting the quality approach shared by all global KPMG member firms. In this way, we want to comply with our promise not to tolerate any illegal or unethical business practices. In addition, as a multidisciplinary audit and advisory firm, it is our top priority to provide the highest quality services. The fundamental basis for this is the integrity and independence of our employees.

To this end, we are continuously working on already established measures and standards in our quality and risk management: Our quality management system creates the reliable framework for our daily activities in a highly complex working environment. When it comes to data protection, we have implemented a variety of measures that guarantee the protection of confidential information against misuse and loss in accordance with the legal requirements. Our supplier management has also established multiple measures to ensure that our standards also apply to our suppliers.

In this way, there is also the Supply Chain Due Diligence Act (LkSG), which has required companies based in Germany since 1 January 2023 to fulfil their responsibility in the supply and value chains. We have also already implemented the new related requirements for us as a company.

The national and the global KPMG Code of Conduct are representative of our corporate values. They set out the most important guidelines and principles for our actions and behaviour in our daily work processes and our corporate culture. All employees are responsible for meeting the corresponding legal, professional and ethical requirements within their respective role and position.

As early as 2002, KPMG International signed the United Nations Global Compact, the world’s largest initiative for responsible corporate management. KPMG in Germany is a member of the global KPMG organisation of independent member companies affiliated with KPMG International. Through this membership, we at KPMG in Germany are also committed to the ten principles of this alliance towards a sustainable global economy. For more information, as well as the United Nations Global Compact’s latest progress report, please visit the link below.

In order to comply with the extensive statutory rules and regulations as well as our commitment to high quality, we are continuously working on the development, compliance and monitoring of our quality management system.

Effective quality and risk management is essential for KPMG to prevent breaches of professional law, loss of independence, liability issues and economic risks. We also combat risks such as reputational damage, loss of mandate and threats to continued existence.

The topic of data protection is becoming increasingly important due to the rapid developments in information and communication technology. At the same time, the European General Data Protection Regulation (EU GDPR), in force since 2018, sets high standards for companies in data protection law. As an auditing company, we are also subject to mandatory legal requirements to maintain confidentiality and professional supervision. Continuously monitoring compliance with data protection laws and maintaining confidentiality are essential for the provision of our services.

An important goal for us is therefore to protect the personal data of third parties, in particular clients, service companies and cooperation partners, as well as our own employees, from loss and misuse in accordance with legal requirements.

Compliance with social and environmental standards is not only part of our own corporate culture and our sustainability strategy. We also expect our suppliers to meet these standards. This principle has now also been reinforced by legislation in Germany: In order to improve the protection of human rights in global supply chains, the German Bundestag adopted the Supply Chain Due Diligence Act (LkSG) in June 2021. The requirements are based on the due diligence standard of the Guiding Principles on Business and Human Rights developed by the United Nations.

Of course, KPMG also implements the requirements of the LkSG in its own business areas and with our suppliers. The introduction of the LkSG poses a new challenge for KPMG to perform comprehensive monitoring of suppliers and service providers along the entire supply chain and to check whether the LkSG requirements are strictly complied with. We have implemented the necessary measures for this.

In addition, KPMG’s supplier management aims to make a significant contribution towards the Paris Climate Agreement: With regard to the measures for CO₂ reduction, the Procurement division has a lot of influence. This applies, for example, to the selection of strategic suppliers who, like KPMG, have committed themselves to complying with the specifications of the Science Based Target Initiative.