More than three-quarters (76%) of CEOs surveyed recently by KPMG said that their organisation’s growth will depend on their ability to navigate the shift to a low-carbon, clean-technology economy, says partner and head of KPMG’s Sustainable Futures, Russell Smyth.
Sustainable business practices offer new revenue opportunities driven by strong demand for low emission and sustainable products and services. A sustainable transition for businesses can deliver positive results and create long-term value.
KPMG recently established a dedicated division to deal with the challenges of global warming and climate change - KPMG Sustainable Futures - to support Irish businesses and public sector organisations in meeting the climate change agenda and delivering on sustainability objectives.
“We’ve been working with clients on sustainability considerations for some time now, yet have seen the most remarkable acceleration of focus on sustainability and climate risk in the past 12 months, that eclipses the collective focus over the last 30 years” said Smyth. “Our clients are really keen to embrace this agenda, recognising its importance beyond regulatory requirements, and recognising the real value of embedding sustainability practices in their business. KPMG Sustainable Futures was created to address the need for expertise that reflected the breadth of expertise of the firm, and a deep understanding of the ever-evolving climate and the sustainability agenda in Ireland, Europe and globally.”
Russell Smyth leads KPMG’s Sustainable Futures team. He has over 15 years' experience in renewable energy, low carbon fundraising and project finance transactions. “There are many positives that sustainability can bring to businesses, from encouraging longer-term thinking, identifying market differentiation and revenue opportunities, through to attracting the right talent,” he said.
“KPMG Sustainable Futures will help Irish companies navigate this new normal. The division brings together a broad range of disciplines into a single team, from sustainability professionals, decarbonisation strategists, green financiers, economists and low carbon engineers, allowing us to address the full spectrum of business needs.”
In upheaval and change, businesses that have invested in sustainability early on will be positioned to benefit from new opportunities.
“We have split our business into five key areas,” said Smyth. “We help people look at how to embed sustainability within their corporate strategy. Secondly, we help clients explore sustainable finance. There are whole new avenues of funding options now such as green bonds and green finance products, and companies that embrace sustainability will have access to cheaper capital and more funding options.”
“We also help clients explore decarbonisation and the circular economy. Carbon is getting more expensive so businesses that are carbon intensive will become increasingly uncompetitive. Considerations around independence assurance, and ensuring that sustainability and decarbonisation metrics reported by companies are robust and accurate, is becoming increasingly important in the face of investor and stakeholder scrutiny. Finally, we are the leading advisors to the renewable energy sector here in Ireland, supporting on financing and transactions around renewable assets such as wind and solar energy.”
Why should a business care about sustainability? “Longer term orientated companies are more successful,” said Smyth. “Sustainability is about building resilience and flexibility into your business model. There has been a fundamental shift in the world’s eco system and out of that will come new growth opportunities for businesses. In that upheaval and change, businesses that have invested early on will be positioned to benefit from those new opportunities.”
“Sustainability also opens up new funding opportunities,” said Smyth. “One of the big focuses of the EU is to re-orientate capital and make it harder and more expensive for companies that are not sustainable to access capital. Today’s talent are also looking to align with sustainability agendas and companies that they can feel good working for. Study after study shows that the majority of the millennial group would rather sacrifice salary than work for a company that doesn’t align with their values.”
Sustainability hasn’t been sidelined in the COVID-19 landscape said Smyth. “There is growing consensus that green investment can be used as a stimulus to come out of the economic challenges we are finding ourselves in at the moment. At KPMG, we believe the tipping point has been reached and sustainability is now a must have for businesses.”
A version of this article first appeared in The Sunday Business Post and is reproduced here with their kind permission.