The Future of ESG

The big picture: At KPMG, we’re committed to helping companies meet their climate-related compliance requirements with confidence without losing sight of the ways sustainability strategies can drive financial value for the overall business. To do so, we’re building exceptional capabilities that can keep pace with the ever-changing regulatory environment and empower companies to lead the transition to a low-carbon economy.

Diving deeper: In practice, this means we’re investing in the tools, talent and teaming capabilities that will best support our clients on their sustainability journeys:

• Tools that connect audit insights to ESG: Up until recently, companies had their own rubric and could grade their own papers when it came to ESG. That’s changing rapidly, and we’re seeing more companies seek assurance to enhance the degree of confidence in their reported information. At KPMG, we’ve embedded our new global assurance manual into KPMG Clara, our global smart audit platform. And we’ve launched a proprietary tool – KPMG’s Emissions Calculator – to standardize and automate our testing of greenhouse gas emissions with built-in analytics to track changes in the data over time. Our auditors know the ins and outs of the strategy, operations and risks of the businesses we audit. By connecting our ESG methodology to our audit platform, our auditors can drive quality ESG attestations that deliver a better audit experience.
• Training that empowers the next generation of ESG talent: Our professionals are the heart of our work, and we’re committed to providing an industry-leading ESG learning experience. In FY23, our professionals completed nearly 60,000 hours of ESG-related trainings. We also made five hours of basic greenhouse gas emissions training available and will offer six hours of EU CSRD training for all Audit professionals. These trainings supplement our existing ESG curriculum roadmap, which includes web-based trainings, in-person and virtual courses, micro learning videos, podcasts and more. A few years ago, we announced an investment of $1.5B globally to expand our ESG capabilities. This includes collaborations with NYU Stern’s Center for Sustainable Business and University of Cambridge’s Judge Business School, which are still going strong today.
• Teaming across the firm: ESG is, by nature, a cross-functional subject area, and we know this can be a sticking point for many organizations. In fact, 41% of respondents to our 2024 ESG Organization Study cited internal silos and limited communication between departments as key impediments to integrating sustainability strategy into broader business goals. At KPMG, partners and professionals leverage our multidisciplinary model to help connect the dots on top-of-mind ESG issues. For example, we bring in our colleagues in our Global Decarbonization HUB for analysis of complex greenhouse gas calculations and assessment of climate risks, and our Tax colleagues to help companies think through considerations from the Inflation Reduction Act. Within Audit specifically, we have our ESG Center of Excellence, a collection of partners and professionals who sit at the nexus of sustainability and finance, serving as translators for teams across the firm.

Engaging the ecosystem: We are committed to engaging the c-suite, board, investors and other stakeholders to enhance our capital markets. In the past year, KPMG Audit, including our Department of Professional Practice, issued 261 insights, garnering more than 20 million touchpoints. From an ESG perspective, we produced handbooks, webinars, podcasts and other collateral. And our Board Leadership Center, which includes our Audit Committee Institute, developed and released 48 publications, podcasts and webcasts, and held approximately 80 board-level conversations.

The bottom line: The ESG landscape is quickly evolving, and so is KPMG. We're keeping a strong pulse on how regulations and reporting demands are expanding. But more importantly, as we enhance our capabilities to best support companies on their ESG journeys, we’re dedicated to keeping financial value creation and business strategy front and center.