Adopting responsible banking practices – How KPMG can help
Pressure grows on the finance sector to operate more sustainably. Read about how KPMG's sustainable finance experts can support banks with the challenges and opportunities at hand.
1. Identify ESG risks and opportunities
Assess your readiness to comply with regulation: KPMG professionals help banks understand how new ESG-related regulation is likely to affect the organization. They help to assess regulatory risks and opportunities and ensure you are ready to comply.
Assess your current ESG maturity level: KPMG professionals analyze your bank’s current approach to responsible banking and ESG. This covers aspects including your ESG governance structure, investment policies, research processes, products and services, credit risk processes and disclosures.
Benchmark your organization against your peers: KPMG professionals help you understand how other banks and financial sector actors are approaching responsible banking and sustainable finance. By taking a detailed look at what your peers are doing, they can identify where you lead and where you lag.
Understand what your stakeholders expect from you: As banks come under increasing pressure to act responsibly, different stakeholders expect different things. KPMG member firms help you engage internal and external stakeholders – from regulators to risk managers, clients to portfolio companies. They help you make sense of the differing views and develop the right strategies to respond.
2. Develop your strategic ESG approach and roadmap
Define principles: KPMG professionals help you define the right responsible banking principles for your organization and integrate them into your bank’s policies, practices and mandates.
Set goals and targets: KPMG professionals help you set the right goals and targets to adapt to the new regulatory environment and realize opportunities in the transition to sustainable finance.
Develop an implementable roadmap: KPMG professionals help you draw the roadmap from your bank’s current maturity level to achieving your responsible banking goals and targets.
3. Implement responsible banking across businesses and functions
Implement ESG in risk management: KPMG advisers help you integrate ESG into your governance and compliance processes including Know-Your-Customer (KYC), credit reviews, client advice and risk management.
Monitor ESG in your investments and loans: KPMG member firms help you measure the ESG performance of your investment funds, managed assets and credit portfolio to help you assess risk exposure and engage with portfolio companies.
Develop innovative products and services: KPMG professionals help you develop innovative financial products and services such as green loans, ESG-integrated investment funds and green and social bonds.
Build capability and align your people with your ESG approach: KPMG member firms help to make responsible banking part of your bank’s culture and DNA through team education, training and communications.
Showcase the impact of responsible banking: KPMG professionals can help you strengthen the business case for responsible banking within your organization by showcasing the impact it has on your business, your clients and society.
4. Monitor, review and report
Monitor and steer performance: KPMG professionals help you measure and report your progress in implementing responsible banking.
Stress testing of portfolios: KPMG member firms help you stress test your portfolios to understand how they are likely to perform under a wide variety of regulatory, economic and climate scenarios.
Review processes and goals: KPMG member firms can be a sparring partner in your implementation of responsible banking and ESG. They implement internal audit processes, independent reviews and controls to make sure your approaches and targets are up-to-date and fit-for-purpose.
Report ESG performance: KPMG can help you improve your external ESG reporting to align with frameworks such as the UN Principles for Responsible Banking/Investment and the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD).
Assure green loans and green bonds: KPMG professionals can verify that your management of green loans and green bonds is in accordance with international standards such as the Green Loan Principles and the Climate Bonds Standards.