KPMG Study: Corporations Leverage Inflation Reduction Act to Finance Sustainability Initiatives

New York, September 12, 2024 – Today, KPMG LLP, the US audit, tax, and advisory firm, released its 2024 Inflation Reduction Act (IRA) Study, "Funding a Sustainable Future: How organizations are leveraging the Inflation Reduction Act (IRA)" which provides insights into how organizations are capitalizing on the IRA to drive their sustainability initiatives and gain competitive advantage.

"The IRA offers a unique opportunity to fund sustainability while boosting profits, but its complexity requires expert guidance," said Rob Fisher, KPMG U.S. Sustainability Leader.

The study, based on responses from 300 senior executives across various industries, reveals that 98% of organizations view the IRA as a source of competitive advantage, with 61% having extensive plans to leverage it in the long term.

Key findings from the study include:

1. Strategic Influence: The IRA is reshaping corporate planning, 50% cite extensive influence on future strategy and project development, while the other half acknowledge moderate effects.
2. Sustainability Funding: 99% of organizations are leveraging the IRA to fund their sustainable strategy and decarbonization plans.
3. Popular Provisions: Renewable energy, energy efficiency, and transportation are the most widely adopted environmentally focused IRA provisions.
4. Financial Benefits: 86% of organizations see the IRA as a way to reduce taxes, while 50% anticipate cost savings beyond tax reduction.
5. Tax Credit Market: 57% of organizations are interested in participating in the new tax credit transfer market, with more organizations looking to sell credits than buy them.

Despite the enthusiasm, the study also highlights challenges in leveraging the IRA fully. The absence of clear governmental guidelines on IRA provisions is cited as the top barrier by 59% of respondents.

“Clients are feeling a heightened sense of urgency to capitalize on IRA benefits now before they potentially are affected by a change in administration and political uncertainty,” said David Spector, KPMG U.S. Advisory Managing Director.

The study suggests that organizations are investing in internal upskilling and data analytics capabilities to maximize IRA benefits, with 72% increasing training to build expertise.

To learn more about our study visit our website here.