Our firm
Sustainable procurement
We support our suppliers to accelerate environmental, social and governance action.
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Working with key suppliers as part of our Sustainable Procurement Programme, we are driving change in their organisations and beyond.
With 1,800 active suppliers, the impact and reach we can have if we harness our influence is vast. Our Sustainable Procurement Programme is ESG-focused and backed by science-based targets. It drives improvements in areas such as sustainability and inclusion, diversity and equity, by encouraging our supplier organisations to become more transparent on their ESG performance and to make commitments to improving this performance. To support our suppliers on this journey, we share our own insights on best-practice and run training sessions too.
Environment
When setting our own science-based targets, we made a bold commitment to significantly reduce the carbon impact of our supply chain. Our supply chain accounts for a significant proportion of our firm’s environmental footprint and we know we have a responsibility to help our suppliers on their journey and work collaboratively with them to share best-practice.
We ask our suppliers to report their carbon data, helping us to measure, and encourage, progress. In 2022, there was a 14% increase in supplier responses to the annual CDP disclosure.
To help share best-practice, we facilitate roundtables, workshops and webinars for organisations in our supply chain. These cover topics such as: the importance of reducing emissions; what good reporting looks like; and the approach to setting science-based targets. We also facilitate events for suppliers and industries that need extra support.
100 / of our suppliers reported their carbon data to CDP this year
FY22 (2021: 88)
76 / of these suppliers have an emissions reduction initiative
FY22 (2021: 68)
52 / of these suppliers have reduced their emissions this year
FY22 (2021: 62)
45 / of these suppliers have set, or have committed to set, a science-based target
FY22 (2021: 43)
Social
Living Wage
We encourage our suppliers to pay a Living Wage salary and pursue accreditation and we are proud to have one of our colleagues as the Chair of the Living Wage Foundation Advisory Council. As an accredited Living Wage Employer, we require that sub-contracted and supplier staff working in KPMG offices are paid the applicable Living Wage or London Living Wage by their employers. Since the increase in Living Wage in November 2021, KPMG has been engaging with suppliers who provide personnel to work in our offices to confirm salaries have been increased in line with the update.
Inclusion, Diversity and Equity
We work with our strategic suppliers to create and promote inclusive environments. Our Sustainable Procurement tender questions and Supplier Code of Conduct reiterate our expectation on suppliers to promote inclusion, diversity and equity within their businesses.
Modern Slavery
As a professional services firm, our most significant risks in relation to modern slavery are in our supply chain.
99.4% of our procurement spend resides in the UK and the US. According to the Global Slavery Index, these geographies have a lower prevalence ranking for modern slavery, however we are acutely aware that slavery-like practices can and do occur in the UK and US in certain higher risk categories.
Of our six major categories of procurement facilities, technology and travel are exposed to the highest risks of modern slavery. The labour in these procurement categories tends to be base-skilled, manual labour and the workers tend to be vulnerable populations including migrant workers. These risks have been identified through our risk assessment processes and are managed through our rigorous due diligence procedures.
Suppliers that are rated as high and medium risk in the risk assessment process are subject to additional due diligence through a self-assessment questionnaire (SAQ). The SAQ is biannual and is based on the Modern Slavery Assessment Tool (MSAT) produced by the UK Government. The SAQ focuses on the key policies and procedures that suppliers have in place to identify, assess, and address modern slavery risk in their operations and supply chains. Of the 59 SAQ’s completed by our suppliers as part of our enhanced due diligence processes:
Suppliers with a Modern Slavery Statement (if required) / 100% *
FY21
Suppliers with an Employee Code of Conduct / 81%
FY21
Suppliers with a Supplier Code of Conduct / 73%
FY21
Suppliers with Whistle-Blowing Mechanisms / 70%
FY21
* Not all of our suppliers are required by law to produce a Modern Slavery Statement. Of those that are required to produce one, 100% confirmed they have met these legal obligations.
We are engaging with our suppliers who scored poorly in the SAQ to discuss their approach to modern slavery risk management further. Where necessary, we will provide these suppliers with recommendations on how to improve their modern slavery control environment.
Governance
Our policies Our Supplier Code of Conduct, which is underpinned by the United Nations Global Compact, describes the expectations we have of our suppliers to conduct business in a responsible manner. It is incorporated in our standard supplier terms and purchase orders. Suppliers are required to align their guidelines, policies, and practices with these expectations and to communicate and enforce the Code of Conduct provisions throughout their organisations and supply chains. If a supplier falls short of our standards, we will engage with them and provide recommendations on how they can improve their policies and processes. If a supplier fails to implement remediation processes within an acceptable timeframe, we will consider terminating the relationship.
Risk assessment and due diligence At the supplier selection stage, suppliers with estimated spend greater than £100k are requested to complete the Sustainable Procurement Questionnaire. Suppliers’ responses are reviewed and scored to assess the controls they have in place to mitigate potential risk, including of modern slavery. All suppliers also undergo adverse media screening at the on-boarding stage. Our suppliers, across all categories of spend, are risk-assessed into high, medium or low risk categories. Suppliers that are rated as high and medium risk are subject to additional due diligence through a biannual self-assessment questionnaire.
Training All members of our Procurement team receive Sustainable Procurement Practices training. This helps colleagues to understand the alignment of our sustainable procurement approach with our business strategy and our ESG commitments (Our Impact), and how their role within the Procurement team supports the achievement of these. The training covers our current sustainable procurement policies and processes, and our plans for evolving these in the future.
Internal governance The Sustainable Procurement Programme is led by our Chief Procurement Officer. Our Sustainable Procurement Steering Group, which comprises representatives from our Procurement, Corporate Responsibility and Inclusion, Diversity and Equity teams, oversees the implementation of the Programme. These members also represent the Programme on Working Groups, such as the Modern Slavery Working Group, which reviews the effectiveness of KPMG’s Modern Slavery Programme and drives forward our approach to tackling modern slavery.