KPMG unveiled a new program, KPMG Impact, to provide its clients with assistance in improving performance and reporting in environmental, social, and governance areas. The new unit will help clients improve their ESG performance while also carrying out KPMG’s own ESG commitments. The program builds off efforts from last year, in which KPMG U.S. worked with other businesses and organizations at the World Economic Forum to create 21 core metrics for companies to benchmark their progress in ESG areas.
The Big Four accounting firm has been working to help companies improve sustainability disclosures for years, but its efforts have accelerated given the heightened attention environmental reporting has received lately, particularly from regulators. The SEC, for example, released a statement welcoming public input on climate change disclosures in March. In a comment letter responding to the SEC call for input, KPMG voiced its strong support for a global framework, pointing to the importance of consistency.
“Without a global framework, disclosures will be less consistent and comparable; registrants operating across jurisdictions (not least through their supply chains and customer bases) will have less clarity as to what is expected of them; and achieving reliability will be more costly because of the lack of standardization. Building on a global baseline, we encourage the Commission to consider whether additional disclosures are necessary in the context of the U.S. environment,” KPMG stated in the letter.
“At the highest level for us, the backdrop for the rise of ESG is it’s all about trust,” said KPMG Impact leader Rob Fisher. “You see people looking to business as an ethical and effective leader to bring ESG aspirations to life, and the recent decline in trust that we see across institutions like government and media and so on affects our ability to come together and solve problems. That’s why a focus on organizations doing well across environmental, social and governance dimensions can really build trust with customers, employees, investors, regulators and really all stakeholders. We think ESG engagement will make businesses better by unlocking new value, building resilience and driving profitable and measurable growth both today and tomorrow.”
Every business has a unique approach to ESG reporting that reflects its stakeholders, challenges, and opportunities. Fish noted that even though many of KPMG’s clients are leaders in their industry, they still turn to KPMG Impact to figure out areas that could be improved.
KPMG is not alone in its increased focus on ESG reporting. Other U.S. agencies, including the Federal Reserve and Treasury Department, have been paying more attention to climate change reporting, and the Biden Administration has promised to use the whole U.S. government to combat climate change. That focus is likely to influence other audit firms to enter the conversation and aid clients when it comes to ESG disclosures and reporting. KPMG’s introduction of KPMG Impact is clear indication that the emphasis on improving ESG reporting is here to stay and not a passing phase. 