Planet

We also look beyond our own footprint toward ways that we can make a difference through our client work, with third parties and through what the Science-Based Targets initiative (SBTi) refers to as “beyond value chain mitigation.” This includes investing in carbon credits and nature initiatives to support the global effort to reach net-zero. For KPMG, our current approach includes an investment of more than US$1 million across a number of our firms in WWF conservation and nature restoration projects, as well as buying credits from voluntary carbon markets.

Our main priority, however, remains our own internal decarbonization. In FY23, we had a 4 percent increase in gross emissions from the prior year due to the reintroduction of business travel following COVID-19 lockdowns. However, this still represents a 22 percent reduction against our FY19 baseline year, and we also managed a reduction in emissions intensity across several key indicators.

Our Scope 1 and 2 net emissions continued to decrease: a 12 percent reduction compared to FY22. The reductions we achieved in Scope 1 and 2 emissions are due to the continuation of hybrid working and the initiatives KPMG firms have been implementing to improve energy efficiency. These are funded in some KPMG firms by the implementation of an Internal Carbon Price (ICP), a monetary value on greenhouse gas emissions which businesses can then factor into investment decisions and business operations. Reporting KPMG Firms have implemented ICPs ranging from US$15 to US$85 per tCO2e, in line with their decarbonization priorities and national economic circumstances — with KPMG firms planning increases in line with their future decarbonization investment plans and focusing on managing emissions such as air travel.

Our total electricity usage decreased slightly despite our growth, with the proportion of renewable energy across our global organization increasing from 79 percent in FY22 to 81 percent in FY23. With all our Reporting KPMG Firms having now transitioned to renewable electricity, the challenge is to ensure that the remaining KPMG firms can also transition in a just, fair and equitable manner. KPMG firms that are yet to source renewable electricity are typically located in countries and regions where availability of supply and prohibitive prices are potential obstacles. Despite this, we remain committed to our goal of using 100 percent renewable electricity across our global organization by 2030 as we recognize that our commitment helps drive wider energy transition goals. 

While overall we saw a modest increase in Scope 3 of 3 percent, business travel emissions increased significantly, primarily due to increased air travel emissions. While air travel emissions increased by approximately 77 percent compared to FY22, this total remains 40 percent lower than our FY19 baseline. The rise in air travel is principally due to our people beginning to reconnect with client and team members following post-COVID-19 travel restrictions as well as organizational growth and a change in emissions factors. Importantly, due to proactive travel management, the implementation of sustainable travel guidelines across KPMG firms, and the behavior-changing influence of our ICP, this ‘rebound’ in air travel has not brought us back to pre-pandemic levels.

We remain vigilant in collectively managing business travel across the organization, as it remains a vital component to achieving our 2030 target and our overall ambition to decouple emissions from growth.  

The accepted standards to calculate emissions factors for air travel emissions have also changed due to passenger loads changing as a result of the COVID-19 pandemic — meaning that, in FY23, those who flew needed to account for a greater proportion of emissions¹, which accounts for a proportion of our air travel emissions growth.

We have completed our second supply chain engagement cycle with CDP (formerly the Carbon Disclosure Project), which is foundational to our supply chain decarbonization program, covering the supply chains for KPMG International and 10 of the Reporting KPMG Firms that, collectively, have the largest emissions footprint. 

Taking lessons learned from our first CDP supply chain cycle, our focus for 2023 was improving supplier response rates as well as data quality, particularly around emissions allocated to KPMG. Using CDP offers a consistent and methodological approach to obtaining accurate data on PGS emissions. This has enabled us to further refine our methodology for estimating our Scope 3 Category 1 emissions, which in turn will improve our emissions data for our mandatory re-baselining exercise for our Science Based Target in FY25.

We have developed Key Performance Indicators that help us track supplier performance against our priority areas. We have also developed a supplier performance roadmap to help benchmark suppliers’ carbon performance and to provide more meaningful feedback to them on potential areas for improvement. As our disclosure program is maturing, we are looking to increase our engagement with suppliers and collaborate further to reduce our collective footprint.

KPMG recognizes that entities should consider whether environmental and climate-related matters are material to the financial statements, including potential impacts arising from the risks associated with the transition to a lower-carbon economy.

To further support the transition to a net-zero global economy, KPMG monitors four quality metrics relating to the planning and performance of financial statement audits. The metrics were monitored at a selection of KPMG clients from carbon-intensive industries (‘in-scope engagements’) for the most recently completed audit prior to 30 September 2023. Procedures and activities performed at the in-scope engagements were used as a basis for measurement. The quality metrics and monitoring results are:

Looking ahead, we will support investor efforts to connect financial and sustainability disclosures. We will also call for robust sustainability assurance standards to help drive confidence in climate-related disclosures by enabling a level of quality in such disclosures that mirrors the same level required in financial statements.

In 2023, a multi-disciplinary team from across the organization collaborated on a number of key events and initiatives in support of the 28th Conference of the Parties (COP28) and its goals. They came together to focus on amplifying the program themes of COP28 and collaborating with clients to expand the reach and increase awareness of the conference and its goals.

Launched as part of our COP28 program of work, KPMG’s 2023 Net-Zero Readiness Report examined the possible barriers to meeting net-zero by 2050, such as global public debt, domestic tensions, increased opposition to decarbonization plans, and the need to guarantee energy supply.

Leveraging our global scale, reach and breadth of service offerings, KPMG continues to play an active role in driving conversations that help to address the challenges being faced by our clients and the planet.

See the PDF for additional data on our operational GHG footprint (ktCO2e).

To play our part, we have developed a circularity strategy and roadmap for our operations, including our supply chain. This has involved taking a holistic view and approach that focuses on circular procurement, avoiding waste, optimizing material use and enhancing products' end-of-life treatment.

We began the process by identifying where these circular principles can be applied within our organization, followed by analyzing our current performance and spotting opportunities for improvement. The scope of our circular strategy is focused on three key areas:

•  Information and communications technology

•  Offices and real estate

•  Catering and hospitality

For each of these themes, we’ve developed a roadmap that outlines the actions that could move the organization toward a more circular model — such as offering repaired, recycled or refurbished IT equipment and sourcing circular furniture — and implementing strategies to help optimize material use and lifetime.

Through ongoing engagement with KPMG firms, we’re helping colleagues better understand the concept of a circular economy and identify where waste is generated across our value chain, while also providing a framework for implementation and reporting.

We want to help clients in this key area too — and recently launched the KPMG Circularity Tracker, using Microsoft Cloud for Sustainability, which measures and tracks circularity at every level of an enterprise, from products and locations to materials. This exciting and innovative solution provides comparisons across products, as well as advice on how to reduce primary resource use and waste generation.

See the PDF for additional data on our climate change performance and our renewable energy performance.