We live in a world that is rapidly changing. From climate change to increasing urbanization, our cities are facing several challenges. Currently, 56% of the world's population lives in urban areas1, but by 2050, two-thirds of the world's population is expected to live in cities.2 More than 75% percent of world emissions3 originate from cities and more than 75 percent+ of the world's natural resources4 are consumed by them. Cities have a crucial role to play in the net zero transition. It is where public actors, the private sector and the finance sector shape future markets and well-being, and demonstrate leadership and responsibility.
The KPMG Net Zero Urban Program (NZUP) is a replicable and measurable approach for accelerating and scaling the speed at which cities can achieve net zero.
Cities on track towards Net Zero
Solutions scaled implemented
The cities challenge
Cities make up only three percent of the Earth’s landmass,5 but they are where the effects of climate change become visible early on. They serve both as early warning beacons for climate tipping points and an entry point for an integrated portfolio approach that can simultaneously address multiple sectors and different actors.
Cities play a crucial role in fostering resilience to climate change and in the net zero transition. They represent the largest portfolio of assets and investments. In addition to creating jobs and wealth, cities drive climate breakthroughs as they are hotbeds for innovation and creativity.
In our view, the historical focus has been on sustaining financial gains at the expense of sustainable land use, local community needs and well-being. We need innovative, ambitious solutions that scale and speed up the transition to net zero to bridge the missing middle.
Amid a prevailing public perception that ‘there is time’ to enact solutions, and that technology can save the day, the troubling reality is that pivotal systemic changes are needed now. And make no mistake – there are no quick fixes to this historic global challenge.
Investing in cities involves embracing complexity.6 With better data and tools, it is possible to further understand implementation scenarios, investment priorities and collaboration models between public actors, the private sector and the finance sector.
The Net Zero Urban Program seeks to address the missing middle between high-level ambitions and promising small-scale initiatives by bringing together public and private actors, innovators and investors to deliver impactful solutions linked to key sectors including the built environment, mobility, energy and industry infrastructure, water, and waste.
Net Zero Urban Program & Decarbonization Innovation Exchange Lead,
Global Decarbonization Center, KPMG International and Senior Manager, KPMG in Belgium
The NZUP advantage
The NZUP’s mission is to bridge the missing middle between sustainable technological solutions and capital through technology and partnerships. The program can match digital solutions with capital to advance solutions. We aim to be enablers that connect the right actors. By 2030, we hope to reach 10,000 cities, scale up 100 digital prototypes, and raise US$ 25bn in capital.
Visualizing challenges and digital solutions at city scale can be challenging for investors and decision-makers. To help map intensity, scale, and correlation between challenges, a progressive digital twin will be used by the NZUP to create an easy-to-understand data layer on a 3D model of an urban environment.
A digital twin is a tool designed to help make better decisions in a faster, quicker, and more economical way. In addressing systemic challenges like climate change, they can be essential tools. The use of digital twins can help urban and business leaders analyze challenges, identify options, and offer interventions that can improve people's and nature's lives. They help simulate return on investment on both the short and the long term.
Without unprecedented technology and business innovation, there may not be a net zero world in 2050. Climate and sustainable energy innovations and transitions are becoming increasingly urgent, given the global focus on energy security. Yet, innovators face numerous challenges in commercializing their innovations, including a lack of funding and finding industrial partners.
To help address these challenges, KPMG is establishing the Decarbonization Innovation Exchange (Exchange). The Exchange is designed to include the creation of a digital innovation marketplace where innovation projects, whether they are business services, digital solutions, or cutting-edge technologies, can be profiled once they have reached a level of technology readiness. Through the exchange platform, investors can connect with global green technology innovators. Innovators and investors can enter into bilateral agreements on a case-by-case basis to provide equity funding and various other forms of support.
In order for net zero to be achieved, action is necessary, and it is not feasible for one actor to overcome the challenges. As the global population grows, and as more people live in urban districts, the decarbonization of cities represents the most promising opportunity for accelerating a net zero transition. Collaboration between the public and private sector is critical to success.
KPMG firms can act as interpreters and matchmakers for the establishment of scale-up initiatives, relieve organizations of the burden of translating regulatory requirements into compliance and assist in developing new market and policy opportunities through the design of policy, finance, tax, and legal models. The professionals at KPMG are passionate about accelerating climate action. We believe that we have an important societal role to convene, connect, and work with others who share a similar commitment.
Roadmap to a better urban future
Buildings and housing ›
The building sector is responsible for nearly 40% of global energy-related carbon dioxide emissions, and home sector accounts for almost 20% of those emissions.7
Energy infrastructure ›
Over the next decade, approximately 70% of clean energy investment will be driven by private developers, consumers, and financiers responding to market signals.8
Mobility and connectivity ›
The mobility and transportation sector are responsible for around 20% of global carbon dioxide emissions.9 Depending on where you live, transportation can be one of the largest carbon footprint segments for an individual.
Waste and sanitation ›
The world generates US$ 2 billion tons of municipal solid waste each year.10 Reducing waste through a circular economy could create US$ 4.5 trillion dollars in economic value.11
The demand for water worldwide is expected to increase by 55% by 2050, primarily due to manufacturing and thermal electricity generation.12
1 World Bank, Urban Development, October 2022.
2 United Nations, 2018 Revision of World Urbanization Prospects
3 Inter-Governmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change
4 United National Environment Programmer, Resource efficiency & green economy
5 Socioeconomic Data and Applications Center (sedac), Gridded Population of the World and the Global Rural-Urban Mapping project.
6 Devex, Why cities are vital to unlocking net-zero success
7 Economist, The construction industry remains horribly climate-unfriendly, June 2022.
8 IEA, World Energy Outlook 2021: Mobilising investment and finance, 2021.
9 Our World in Data, Cars, planes, trains: where do CO2 emissions from transport come from?, October 2020.
10 World Bank. “What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050.”
11 World Economic Forum, It's time for the circular economy to go global - and you can help, January 2019.
12 OECD. “OECD Environmental Outlook to 2050: The Consequences of Inaction – Key Facts and Figures.”