Environmental, Social and Governance (ESG)

The ESG megatrend has significantly impacted the M&A sector. Globally, sustainability criteria are increasingly influencing deal-making across various industries. Data consistently shows a strong correlation between high ESG performance and enhanced financial and investment returns.

KPMG’s ESG Deals & Value service empowers investors to seamlessly integrate ESG considerations into their investment strategies, optimizing ESG value creation post-deal. We assist financial and corporate investors, as well as asset owners and companies engaged in business sales or fundraising, in developing and implementing effective ESG-centric deal strategies.

Addressing climate change and biodiversity loss, pivotal challenges for businesses and society, necessitates a proactive approach to reduce carbon emissions and foster a low-carbon, nature-positive economy. Decarbonization represents not only a response to policy and regulatory trends but also an opportunity for organizations to lead the transition to a net-zero future.

KPMG’s Decarbonisation services offer specialized climate risk and decarbonization advisory throughout the decarbonisation lifecycle. We cater to a broad range of sectors, including industrial manufacturing and real estate, as well as financial investors like banks, asset managers, and insurers aspiring for carbon neutrality. Our Climate and Nature Risk Consultancy extends beyond risk assessment, delivering comprehensive analysis and management solutions. We support financial institutions impacted by climate and nature-related risks and are expanding our services to high-emission sectors such as real estate and construction.

Social is about how we can make people's lives better and contribute to the overall wellbeing of the communities we operate in. It concerns how we can address social and economic inequality, empower our workforce and communities, and create long-term socio-economic prosperity and wellbeing.

Under the framework of the United Nations Sustainable Development Goals (UNSDGs), public and private sector organisations have come to realise the importance of social sustainability for their workforce, customers, stakeholders as well as the wider communities in which they operate. Pressure is growing on organisations to demonstrate a net positive contribution to society. Social risks and opportunities have direct impacts on business and financial performance as well as on reputation and ‘social license to operate’.

KPMG provides a tailored approach to public and private sector organisations to help them integrate social sustainability practices into their strategy and operations.

Corporate reporting initiatives continue to evolve, with China’s main stock exchanges mandating sustainability disclosures for large listed companies, the European Union’s Corporate Sustainability Reporting Directive (CSRD)-mandated reports coming into effect, and various jurisdictions beginning to adopt ISSB standards. Driven by capital markets’ demand for information that supports better economic and investment decision-making, there is growing emphasis on connecting a company’s sustainability disclosures with its business model and strategy. This provides a consistent narrative that bridges financial and non-financial information.  

To assist clients in adapting to this new era in corporate reporting, KPMG’s ESG reporting services help clients understand their ESG reporting obligations, determine their readiness for ESG reporting, and be confident in complying with ESG reporting requirements. We support clients in delivering a coherent and connected narrative that enables the disclosure of decision-useful and comparable information. 

In today’s business landscape, fostering long-term environmental and social values has become integral to corporate performance, and ensuring transparency and credibility in ESG and other non-financial data is increasingly critical. This shift is particularly evident in rapidly growing economies where sustainable business practices are increasingly tied to market competitiveness and investor confidence. In response to stakeholder demand for a specific sustainability assurance standard, the International Auditing and Assurance Standards Board (IAASB) has issued the International Standard on Sustainability Assurance (ISSA) 5000 framework, which serves as a new global baseline standard for assurance providers to bring further comparability and increased confidence in reported sustainability information.

At KPMG, we are highly conscious of our responsibility in striving to deliver ESG assurance that can serve the public interest. KPMG’s portfolio of ESG Assurance services aims to meet the needs of a variety of organisations, whatever their level of maturity, industry focus or need. 

Globally, governments are increasingly focused on achieving net-zero targets and fostering sustainable economies, with tax policies being a pivotal instrument to reach these objectives. Integrating the implications of these evolving tax measures into business strategies is becoming crucial.

KPMG’s Carbon Services offer specialized, cost-effective solutions to accurately quantify greenhouse gas (GHG) emissions, energy use, and other environmental indicators for compliance. We provide expert advice on climate policies and their business impacts, serving clients across Hong Kong SAR and the Chinese Mainland. We also offer assistance to businesses to obtain incentives and subsidies that are aiming to encourage the undertaking activities which can help achieving good social means (e.g., subsidies for employers who hire underprivileged people).

Investors, research and rating firms, employees, customers, and regulators now critically assess how companies manage climate change, diversity, and other ESG risks. These factors are integral to a business’s sustainability and value creation over the long term. Our ESG Governance services are designed to help clients establish a strong ESG foundation and effectively operationalize ESG principles. We provide tailored support to financial institutions and public companies, where stakeholder expectations for robust ESG governance and transparent disclosure are paramount.

KPMG’s approach encompasses strategic advisory, policy development, and implementation guidance, ensuring that ESG governance becomes an integral part of our clients’ corporate ethos and decision-making processes.

In today’s competitive business landscape, sustainability in supply chains represents not just a potential risk, but also a key competitive differentiator.

KPMG’s Sustainable Supply Chain Services deliver an all-encompassing approach to help companies integrate sustainability within their supply chains, fulfilling their ESG goals, managing risks, and boosting resilience. We cater to companies from various industries with intricate, globally dispersed supply chains, offering strategic insights and practical solutions to transform their supply chain into a sustainable, efficient, and ethically responsible operation.

The Circular Economy is increasingly pivotal in corporate strategy, driven by challenges like stringent regulatory demands, resource scarcity, fluctuating commodity prices, and evolving consumer preferences.

KPMG’s Circular Economy services are dedicated to assisting clients in identifying and leveraging opportunities to minimize waste and optimize reuse and recycling processes. We specialize in helping medium to large-scale clients in the real economy sector, particularly those heavily reliant on natural resources, to develop innovative circular strategies and business models. Our services focus on reimagining and reinventing existing products and services, paving the way for more sustainable and efficient business practices.