PMG today sported $1.5 billion in ESG investments for the white-hot market, committing itself to “at least” the same environmental and social standards it intends to establish in its global client portfolio. Is.
Big Four auditors in training their 227,000 employees to set and assess sustainability goals, buy specialist firms, and open regional centers around the world to help companies clean up their carbon footprint, supply chain and labor practices will invest.
Richard Threlfall, KPMG’s global head of ESG, said: “We are seeing, as everyone else, that the entire business environment is changing because of society’s expectations around the way business is conducted.
“We have a responsibility to support our customers in meeting that expectation, not only on climate and decarbonisation, but also in areas such as human rights, ethical supply chains, inclusion and diversity.”
The sustainability boom has seen total assets in ESG funds more than double to $2.2 trillion since the first quarter of 2020.
Investor pressure is forcing boards to re-evaluate their strategies based on what they sell and how it is sourced to account for the working conditions of employees and the wider impact of operations on local communities.
McDonald’s this week became the latest multinational to announce a net-zero target. BHP, the world’s largest miner, is facing rebellion over the scale and reach of its transition plan.
KPMG is working with companies ranging from healthcare tech firm Philips and drugmaker Sanofi to Ikea and the government of New South Wales to meet sustainability goals with the same rigor as financial targets.
Threlfall said: “We are being inundated with requests for help from our customers around the world, primarily around climate and decarbonisation, sometimes more broadly on their ESG strategy.
“It’s a lot of pull from the business but it’s one that we’re happy to answer because we think it’s the right thing to do and we want to do our job.”
The central criticism of ESG so far has been that the concept is woolly and open to claims of ‘greenwashing’, with no universal benchmark.
Threlfall believes this will change “definitely before the end of this decade, and possibly much faster” as IFRS prepares to unveil its International Sustainability Standards – a universal framework for ESG performance – At the COP 26 conference in Glasgow.
This would mean the target could and should be measured, creating a vast new market for auditors.
PwC has launched a $12 billion investment plan by launching “trust institutions” to teach ethics, while Deloitte is launching a “climate learning program” for its 330,000 employees.
KPMG has already set a target for 29% of its partners and directors to come from working class backgrounds by 2030.
This renewed focus on trust, diversity and climate change could help take the spotlight off the list of scandals in the accountancy sector.
KPMG faces scrutiny by the Financial Reporting Council in its audit of dismantled outsourcer Carillion. Earlier this year it was fined £13 million for its role in the sale of mattress company Silentnight.
Threlfall acknowledged that the area must keep its house in order, adding: “We have to hold ourselves at least to the standard that we’re asking other businesses to follow. We believe we need to Everything doesn’t get right all the time.
“Our commitment is to be as transparent as we are asking other businesses to be. And where we are not yet performing to the level that we want, we will transparently say how it is, our That’ll determine what the objective is, and the steps we’re going to take to get there.
He continued: “We’re really aware that in this space it’s easy for a business to make a big announcement about some sort of money and how many people they recruit, and so on.. we absolutely don’t want that. , so we’ve taken our time to come up with a really detailed strategy.
“It is not about KPMG establishing a new niche ESG business, it is about finding new opportunities in the ESG assurance space, decarbonization and human rights alongside every single service we provide It’s going to run like a watermark through everything KPMG does.”
KPMG CEO Bill Thomas said: “How do you escalate matters and what worked for us and other businesses in the past will not work in the future.” The world is facing a crisis on many fronts, which is why That we keep the ESG agenda at the center of everything we do.
“KPMG has the global scale, expertise, technology and relationships to provide solutions and services to address the challenges facing our planet and society.”