KPMG empowers SMEs to enhance business strategy with four-step ESG value creation approach

KPMG's four-step ESG approach enhances SMEs' business strategy.

KPMG's four-step ESG approach enhances SMEs' business strategy.


Bangkok, 28 April 2023 – KPMG in Thailand introduces a four-step environment, social and governance (ESG) value creation approach for small and medium-sized enterprises (SMEs) to drive business success as ESG factors become increasingly important to the success and resilience of businesses across all sectors.

As stakeholder expectations continue to evolve, customers, employees, shareholders, creditors, suppliers, and public authorities are demanding that businesses consider their impact on society and the environment. Investing in environmentally responsible business practices can provide a host of benefits such as lower operational costs, higher customer satisfaction, better access to capital sources on favorable conditions, access to top talent, and improved reputation.

KPMG has outlined a four-step value creation approach for SMEs to integrate ESG into their organization:

Step 1: ESG Discovery

Ensure your teams understand the motivations, benefits, and specifics of an ESG approach and secure management buy-in. Engage the leadership of various functions to create a seamless ESG vision for all staff.

Step 2: Development of an ESG framework

Gather and analyze market, peer, and stakeholder information to help prioritize the ESG topics important to your organization. Getting a handle on ESG can be challenging, as it embraces a wide range of topics, such as biodiversity, climate change, diversity, equity, inclusion, employee health and safety, and cybersecurity. To ensure your ESG action plan is feasible, it is critical to narrow down your ESG topics to what is most relevant to your business and your stakeholders.  

Organizations need to conduct market and peer reviews, a diagnostic of their “current state” or “target state” internal practices, and an in-depth consultation of internal and external stakeholders to home in on their strategic ESG priorities. 

Step 3: Design and implementation of ESG programs

Develop an enterprise-wide ESG action plan and implement initiatives tied to material ESG topics to effectively mitigate risks and leverage opportunities.

3 trends guiding the 2023 ESG agenda: 

Climate change:  SMEs should gauge their climate footprint to facilitate adopting climate targets, such as net zero, and cut down greenhouse gas (GHG) emissions, particularly with climate change posing financial risks to operations: increased physical impacts, potentially involving assets and/or the supply chain, and regulatory compliance costs. Climate expectations of regulators, clients, creditors, employees and other stakeholders continue to evolve, such that GHG disclosure and management are becoming mandatory for some SMEs.  

Circular economy: In an environment in which resources are limited and supply chains are under strain, the circular economy offers many advantages such as cutting down on residual waste, improving the environmental balance, finding potential new income streams and growing profitability. At the same time, the circular economy is an effective tool to combat climate change, particularly for achieving GHG emission reduction targets. 

Diversity and inclusion: In a full-employment market, a business’s employer brand is a key differentiator. Businesses with inclusive, equitable, and diversity-minded workplaces enjoy a competitive edge not only in driving innovation, operational efficiency and growth, but also in attracting new talent, while keeping their teams engaged. 

Step 4: Measure and disclose ESG

Measure outcomes for each material ESG topic and monitor and disclose performance.

“You can’t manage what you do not measure.” Implementing an ESG performance monitoring system will help identify improvement opportunities, address effective solutions and demonstrate continuous progress in your ESG program rollout. Disclosing your ESG performance externally garners the opportunity to gain credibility and recognition for your ESG initiatives with internal and external stakeholders.  

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively.

KPMG firms operate in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.

KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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About KPMG in Thailand

KPMG in Thailand, with more than 2,000 professionals offering Audit and Assurance, Legal, Tax, and Advisory services, is a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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