Shaping the debate
We convene and collaborate to shape practical ESG solutions for our stakeholders.
We convene and collaborate with stakeholders across industry, not-for-profit and government to shape practical ESG solutions for our clients, our people, our communities and our planet.
Environmental risks have quickly risen to become a Board-level concern. And for businesses across the globe, managing and addressing these risks is a major challenge. Organisations of all sizes are having to reassess their business models to ensure the impact they make on the world is a positive one – it’s the commitment they make to future generations. But this is not something they can do alone. Collaboration is key to ensuring real change is made. And we’re playing our part.
We’re founding partners of the Sustainable Markets Initiative – a network of global CEOs, led by His Royal Highness The Prince of Wales, who work together to accelerate progress towards a sustainable future.
In collaboration with the Confederation of British Industry (CBI), our Future of Commuting series – which includes Connecting Communities, Commuting beyond the Coronavirus and Greener Miles: Delivering on a net-zero vision for commuting – highlights the need to improve commuter infrastructure across the UK and provides recommendations for how to make commuting greener, more affordable and more reliable for communities across the country.
Environmental behaviour change charity Hubbub took their first step into sustainable home-working in collaboration with KPMG. We piloted Hubbub’s Live Savvy Championship with 260 of our colleagues. The five-week series of challenges saw our colleagues take practical action to live more sustainably. We’ve also collaborated with Hubbub on our HomeHQ research, which gave colleagues the opportunity to share their views on living and working more sustainably, helping to shape the future of our environment strategy.
Our vice chair, Simon Virley reflects on COP26 and how we’re acting on it as a firm.
“As Tony Danker, Head of the CBI, put it during one of our ‘Voices for a Sustainable Future’ sessions, COP26 was the moment that businesses got real about climate change, and climate change became real business.
Business and Finance came to the fore in Glasgow like no other COP held to date. That was evident throughout the many events that we hosted as KPMG, with clients like SSE, Natwest and British Gas.
As a firm, we are committed to reach Net Zero ourselves by 2030. We have launched a range of initiatives to support this, including moving all our operations to renewable power, improving the energy efficiency of our buildings, changing our company car scheme, cutting down waste and launching our sustainability challenge, to give colleagues the tools and ideas they need to reduce their carbon footprint.
We have also been learning from others through our ‘Voices for a Sustainable Future’ series, where we spoke to business leaders. We have also hosted ‘Sustainability Unplugged’ sessions with some incredible guests working in this space.
How you grow matters, and at KPMG we’re committed to sustainable growth with purpose. That is why we’re working with young people across the UK to develop ‘green skills for life’, as well as creating more sustainability-focused volunteering programmes for our people.”
KPMG is a founding partner, and integral part of the secretariat, of the Sustainable Markets Initiative – a network of global CEOs, led by His Royal Highness The Prince of Wales. Working together to accelerate progress towards a sustainable future, our UK Chair Bina Mehta sponsors our strategic relationship that enables growth and scale, and facilitates impact, in support of this vision.
Our Global CEO, Bill Thomas, is a member of His Royal Highness The Prince of Wales’ Sustainable Markets Council – a global advisory body of public-private-philanthropic leaders, which aims to demonstrate the potential of sustainable market creation.
In support of the Terra Carta – a charter that puts sustainability at the heart of the private sector – we leverage: our market presence, to bring industries together; our tools, such as Dynamic Risk Assessment, to create new ways of thinking; and our deep expertise in reporting and assurance, to provide insight and guidance on how responsible business can be measured. This enables us to support industries and businesses in their transition to: achieving net zero greenhouse gas emissions; creating a nature-positive future; and scaling sustainability-focused investment.
The impact of the COVID-19 pandemic has been a stark reminder to businesses of their responsibility to their people and to their communities. It has shone a spotlight on social inequalities, on a global scale. Movements such as Black Lives Matter and Me Too have sent powerful messages to the world of the need for change. Collaboration is key to ensuring real change is made. And we're playing our part.
We've committed to taking collaborative action to drive greater inclusion, diversity and equity in our industry. We've publicly demonstrated this commitment by signing up to, and taking practical actions toward, the following charters and initiatives:
We're committed to boosting social mobility. In 2006, we became one of the very first businesses to pay the real Living Wage to its employees and contracted staff. We went on to become a founding member of the Living Wage Foundation and have continued to provide financial and strategic support ever since. Our Head of Inclusion, Diversity and Equity currently acts as Chair of the Living Wage Advisory Council. We've also signed up to the Social Mobility Pledge and play a key role in the Access Accountancy Patron Group, City of London socio-economic diversity taskforce, and Patchwork Foundation. We recognise that numeracy, literacy and lifelong learning skills are building blocks for social mobility, and that's why we work with external organisations to tackle these issues too. In 2021, we became one of the first organisations to report our socio-economic background pay gaps, working with social mobility experts, The Bridge Group.
As a firm, we have a longstanding commitment to improving social mobility, and fair pay is a key component of that. In 2006, we became one of the very first businesses to pay the real Living Wage to its employees and contracted staff. We went on to become a founding member of the Living Wage Foundation and have continued to provide financial and strategic support ever since. Our Head of Inclusion, Diversity and Equity, Jenny Baskerville, was appointed Chair of the Living Wage Advisory Council in June 2021, “It was a real honour to be asked to chair this group. There are a whole range of organisations from all different sectors playing their part on this movement” says Jenny.
“Our partnership with the Living Wage Foundation has helped to grow this initiative into a movement of over 9,000 accredited Living Wage employers, 3,500 of which signed up since the COVID-19 pandemic. It’s critically important that we raise the profile of in-work poverty, particularly off the back of the pandemic and the challenges many people are facing.”
Since its inception, the Living Wage campaign has put back more than £1.6bn into the pockets of over 300,000 low-paid workers. “Collaboration is key in driving change, and that's why we're supporting our suppliers and our clients, where they can, to implement the real Living Wage across their businesses too.”
Supported by Pro Bono Economics and in collaboration with the National Literacy Trust and BBC Tiny Happy People, we commissioned research seeking to understand the impact of poor literacy skills on the UK economy. The findings were staggering. 14% of three-year-olds are at risk of starting school with "vulnerable" levels of language skills. This will equate to a £1.2 billion cost to the UK economy, across all pre-school children alive today who are, or may become, "at risk of vulnerable language skills".
"The education and development of children in their early years shapes their prospects in later life and, as our latest research makes clear, cumulatively it has a material impact on our economy. The pandemic has exacerbated the number of children showing poor early language skills, with those from disadvantaged backgrounds likely to have been disproportionately affected. If businesses are serious about improving social mobility and boosting our economy, then supporting early years education and development is a critical place to start. By doing so we can lay the foundation for a more prosperous and fairer economy."
Bina Mehta / Chair, KPMG in the UK
To help tackle the nation's literacy gap, we're a lead business signatory of the Vision for Literacy Business Pledge – a public commitment from 83 businesses to drive change. In support of the Pledge, we've collaborated with the National Literacy Trust on the Reading the Future campaign, to provide Instant Libraries to 150 schools in areas with the worst social mobility outcomes.
From investors and regulators, to employees, customers and the public – corporate stakeholders are becoming increasingly aligned on their expectation of businesses to provide an accurate picture of their ESG performance – one that demonstrates an organisation’s clear understanding of its risks and opportunities and one that is credible, verifiable and comparable.
One of the ways we are supporting organisations to better understand the strategic implications of their climate-related risks and opportunities specifically, is through our work in co-designing a new online climate scenario analysis training course, hosted on the TCFD Knowledge Hub. Read more in our case study below.
Just as important as having a clear understanding an organisation’s risks and opportunities, is reporting on their ESG performance against these. We recognise the ESG reporting landscape is complex – the range of metrics and disclosure frameworks used is vast and varies by sector and size of business, as well as global location. With transparency and data being critical to building stakeholder trust, we're committed to helping drive increased consistency and comparability across the corporate reporting landscape.
We've worked in collaboration with the World Economic Forum, the Bank of America and other Big Four accounting firms to identify a set of universal and material ESG reporting requirements, that can be adopted as part of businesses' mainstream annual reporting. Known as the WEF IBC Metrics, the framework helps businesses to demonstrate how sustainable they are, how they create long-term value for society and how they ensure they are future-fit. Read more in our case study below.
We’ve also worked in collaboration with the International Regulatory Strategy Group (ISRG), to publish the report: Accelerating the S in ESG: a roadmap for global progress on social standards. Using insights from International standard setters (including GRI, SASB) and other institutional bodies (including UN PRI, OECD, IMP) the report identifies key market trends and challenges that the financial services sector must tackle in order to achieve better social standards.
Our global colleagues are also supporting the Global Reporting Initiative (GRI) on the development of an updated and revised biodiversity Standard for sustainability reporting. The aim of this standard is to support more businesses to address their biodiversity impact, and meet stakeholder expectations for transparency.
Climate scenario analysis supports organisations to become sustainable and resilient. It helps them to mitigate their risks and unlock opportunities in the transition to a lower carbon economy.
Despite its benefits, uptake is currently limited – the 2021 Status Report published by the Task Force on Climate-related Financial Disclosures (TCFD) – whose aim is to improve and increase reporting of climate-related financial information – found that only 13% of companies disclosed information on the resilience of their strategies under different climate-related scenarios in 2020, making this the least reported recommended disclosure1.
We want to support organisations to navigate the challenges and complexities of climate scenario analysis. That’s why, in collaboration with the Climate Disclosure Standards Board (CDSB), we’ve co-designed a new online climate scenario analysis training course. Hosted on the TCFD Knowledge Hub, which received nearly 200,000 unique visitors from over 180 countries and jurisdictions last year1, the training is available free of charge and references KPMG Climate IQ – our integrated climate scenario analysis tool that enables companies to identify, quantify and manage their physical and transition risks due to climate change. The training has already received widespread interest and according to the CDSB, has been one of the most sought after courses.
With TCFD reporting becoming mandatory in the UK and other countries, we are seeing an increase in demand for climate scenario analysis and TCFD reporting services. With Climate IQ, our team of specialists and strong industry relationships with the CDSB and more, we are ready to support our clients on their TCFD journey.
Whilst businesses have been reporting on ESG for a number of years, what has been lacking is a consistent approach and the ability to compare across industry sectors and geographies. We've worked in collaboration with the World Economic Forum, the Bank of America and other Big Four accounting firms to tackle this problem.
Together, we've identified a set of universal and material ESG reporting requirements, that can be adopted as part of businesses' mainstream annual reporting. Known as the WEF IBC Metrics, the framework helps businesses to demonstrate how sustainable they are, how they create long-term value for society and how they ensure they are future-fit.
The metrics have received widespread support and have contributed to the considerable movement of standard setters and regulators to work intensively together toward convergence. This convergence, amongst others, now involves the International Financial Reporting Standards (IFRS) Foundation which is consulting on broadening its mandate to include sustainability issues. In addition, the five leading voluntary standard-setters have committed to working towards a joint vision with Sustainability Accounting Standards Board (SASB) and International Integrated Reporting Council (IIRC).
We're educating and encouraging businesses and clients to incorporate these metrics in their own reporting, to help bring consistency and comparability across industry sectors and geographies. And, we're leading by example by aligning our own reporting to these metrics too.