Executive understanding of sustainability, and its related risks and opportunities, is on the rise — in large part due to increasing regulation and mandatory reporting requirements.
While some sectors have made more progress than others, sustainability risks and opportunities are not yet factored consistently into financial models and decision making in credible ways. As a result, sustainability programs can fail the business case test despite delivering a commercial return on investment when all factors are taken into account.
Why is sustainability not yet integrated into financial models in a meaningful way? At KPMG, we believe it is because a commonly-accepted approach to translating the risks and opportunities into financial planning and enterprise value remains lacking. Quantification techniques, where they exist, are often fragmented and inconsistent.
