In this edition of Frontiers in Finance, we focus on an area of rapidly growing importance to the financial services sector — the ESG (environmental, social and governance) agenda. The topic is only gaining in relevance and significance to the way firms operate in today’s world.
However, in the intervening period since work on planning and compiling the publication began, another truly momentous issue has confronted all of us globally: the COVID-19 coronavirus pandemic.
We have decided to retain our focus on ESG as it is an area that cannot — and should not — be ignored. In fact, the COVID-19 crisis exemplifies the interdependent relationship a company has with the community it serves, and highlights the prominent role that impact and key ESG factors have in contributing to the resilience of a business.
The biggest challenges facing the industry today
We hope that the virus will be contained and economies will overcome, and then bounce back from, the shocks. In the same vein of positivity, we focus in this issue on the ‘upside’ of the ESG agenda for financial services firms. We highlight opportunities, explore exciting new trends and dig deep into new and emerging growth areas.
We talked to the leaders in the field — like Goldman Sachs, profiled on page 8 — to find out how they are turning the ESG agenda to their advantage, sending a strong signal to the market. And we spotlight encouraging global and regional efforts aimed at helping smooth the transition to an ESG-aware financial system.
Yet we are certainly not ignoring the risks. Within this publication, we tackle — head on — many of the biggest challenges facing the industry today. We look at the growing demand for standardized approaches to ESG measurement and disclosure. We assess the ever-changing political and regulatory expectation and its influence on the financial services agenda. And we acknowledge the potential for significant financial disruption as the world moves towards a low-carbon economy.
At every step, our authors and contributors focus on illuminating the opportunities. They offer constructive advice for dealing with the challenges. And they use real-world examples to demonstrate that the ESG agenda can drive positive results for those financial services firms willing and able to embed ESG into their strategy and operations.
Purpose and profits combined
At KPMG, our network of financial services professionals is committed to playing a positive role in the discourse around the ESG agenda. We are engaging with clients, governments, financial services authorities, regulators and standard-setting bodies to help reduce the complexity and uncertainty of the transition. And we are taking steps to ensure our own activities are aligned and progressing the global ESG agenda.
We hope that this publication serves as a catalyst to the financial services industry — that it inspires optimism and encourages action — allowing financial services executives to combine both purpose and profits to the greater good of society and shareholders alike.
On behalf of KPMG’s global network of financial services professionals, we would like to thank all of those who contributed to this publication. By sharing your ideas, experiences and insights, you are helping drive forward a more resilient and more successful financial services industry.
To learn more about the issues raised in this edition of Frontiers in Finance — or to discuss your organization’s unique ESG agenda and roadmap, or the impacts of the pandemic — we encourage you to contact us.
Financial Services Audit Partner
KPMG i Sverige