2024 Climate Risk Report

Climate
Risk Report
Aligned with Task Force on
Climate-Related Financial
Disclosure Recommendations
March 2024
KPMG International
kpmg.com
KPMG’s ESG reporting suite
ESG is at the heart of how we operate as a business. Alongside this Climate Risk Report, you can find out
more on KPMG’s ESG strategy and performance in the following reports and disclosures:
The KPMG 2023 CEO Outlook draws on the Learn more in the KPMG: Our Impact Plan KPMG is committed to quality and service
perspectives of more than 1,300 global CEOs about the progress we’ve made in each of our excellence in all that we do. Learn about
on the role of ESG in adapting to shifting four priority areas: Governance, People, the the KPMG Code of Conduct and our Values
business and economic landscapes. Planet and Prosperity, read KPMG: Our Impact in the KPMG International Transparency
Plan 2024 update. Report 2023.
Notes:
KPMG is a global organization of professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International” or “KPMGI”) operate and provide professional
services. Throughout this document, “we”, “KPMG”, “us” and “our” refers to the global organization, to KPMG International Limited (“KPMG International”) or to one or more of the member firms of KPMG International Limited, each of which is a separate legal
entity. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.
The data set out in this report represents combined information of the independent KPMG firms affiliated with KPMG International Limited that perform professional services for clients. Reported emissions reflects data for FY23, the period from 1 October 2022 to
30 September 2023. The information is combined here solely for presentation purposes.
Climate change performance data reflects the data from approximately 75 KPMG firms including the Reporting KPMG Firms that have been used to estimate total emissions on a global basis. Scenario analysis — physical risk assessment was conducted on the
majority of KPMG firm offices and real estate assets around the world. Scenario analysis — transition risk assessment data relates to 10 KPMG firms representing approximately 70 percent of the KPMG’s global revenue.
KPMG International Limited is an English company limited by guarantee that does not provide client services. Professional services to clients are exclusively provided by KPMG firms who remain solely responsible and liable in respect of these services. For more
detail on our structure visit kpmg/governance.
“Reporting KPMG Firms” means KPMG firms in 20 large countries and territories, including firms whose senior partner is also a Global Board member. These countries and territories are Australia, Brazil, Canada, China, France, Germany, India, Ireland, Italy, Japan,
Mexico, the Netherlands, Poland, Singapore, South Africa, South Korea, Spain, Switzerland, the UK and the US.
Climate change performance data for FY23 has been collected from 75 KPMG firms including Reporting KPMG Firms. Although KPMG International has not obtained third-party verification of the emissions data in this report, a number of the KPMG firms have had
their underlying data independently verified. To estimate total emissions on a global basis on the basis of the data collected from the relevant KPMG firms, KPMG International’s methodology for relevant emissions and/or carbon claims is in accordance with the
globally recognized Greenhouse Gas Protocol (GHG Protocol), developed by the World Business Council for Sustainable Development and the World Resources Institute. The GHG Protocol provides standards and guidance for companies and other organizations
preparing a GHG emissions inventory, also known as a carbon footprint. For more information please see Our Impact Plan 2024 update, Planet section.
© 2024 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Climate Risk Report I 2
Contents
Introduction 5
Governance 12
Strategy and scenario analysis 19
Metrics and targets 40
Continuing our climate journey 44
Appendix 45
Message from our Introduction
Global Chairman and CEO Governance
On behalf of everyone at KPMG, I am pleased to present to you our 2024 • Embedding ESG and Climate Risk into our Enterprise Risk Management Strategy and
Climate Risk Report, aligned with the Task Force on Climate-related Financial process scenario analysis
Disclosures (TCFD) recommendations.
• Making tangible progress through our validated science-based
The effects of climate change can be witnessed on a near daily basis with decarbonisation target
increased extreme weather events such as wildfires, droughts and flooding. These Metrics and targets
With this report, we have a better understanding of where we are today, and
events have led to climate impacts being widely recognised as a key business
know that we can and will do more. But importantly, we also recognize that our
issue. No business is immune. With more than 270,000 people across the world
largest impact is through the work we do for our clients. That is why we are
working together in 140+ countries and territories, we’ve directly experienced the
embedding ESG into everything we do, investing billions to utilize our scale, Continuing our
impacts of climate change where KPMG and our clients operate.
talent, and innovation to progress a more sustainable future. climate journey
We believe that what gets measured, gets done. Measuring the total impact
Our world is evolving at a speed and scale once unimaginable. Now more than
of businesses across the world will help align resources at the scale and speed
ever — especially as it relates to climate change — collaboration and cooperation
necessary to overcome the challenges presented by climate change. That is why
across disciplines and geography is critical. Only together, working side-by-side Appendix
KPMG has proudly worked with the TCFD since 2017 and has been an active
with clients and alliance partners, can we meet our shared responsibilities and
proponent of sustainable metrics since the beginning.
overcome these challenges.
It is encouraging that a major milestone for the consolidation and standardization of
Thank you for taking the time to read more about KPMG. We look forward to
climate risk reporting has recently been achieved. TCFD recommendations are now
building a more resilient and sustainable future with you.
integrated into the ISSB’s requirements for climate-related disclosures, which will
hopefully spur increased action from businesses.
Solutions to the risks and challenges posed by climate change will take time
and commitment, and we believe every business has a role to play. Publishing
this Climate Risk Report is an important step in our own journey to meet that
responsibility. We have made good progress toward many of our goals detailed
within this report, including:
Bill Thomas
• Utilizing our Climate IQ methodology to run a comprehensive transition Global Chairman and CEO
scenario analysis KPMG International
Introduction
Introduction
Governance
Strategy and
scenario analysis
Metrics and targets
Continuing our
climate journey
Appendix
Our climate journey Introduction
Introduction
KPMG is committed to being a market leader in ESG and driving the global transition to a greener and fairer economy, while ensuring we manage our own environmental
impact in doing so. Since the 2008 launch of our Global Climate Response (GCR) — KPMG’s internal decarbonization initiative — we’ve actively pursued ways to reduce our
environmental impact globally while delivering services to clients. We have taken steps to identify and address our climate impacts through efforts that include: Governance
Making internal changes to

Working towards targets Assessing our net-zero Investing in decarbonization
01 aligned with leading standards; 02 readiness; 03 initiatives; and 04 consider climate impacts
within our business. Strategy and
scenario analysis
Publishing robust and transparent climate disclosures is a vital part of achieving our objective — both in terms of sustaining progress toward our commitments and
demonstrating the importance we place upon climate change mitigation.
This is our first Climate Risk Report in line with the recommendations of the TCFD and is made by KPMG International on behalf of the global organization. Metrics and targets
2020 2021 2022 2023

Continuing our
climate journey
Started working towards a 1.5°C Published first Net-Zero Readiness Index to The majority of Reporting KPMG Firms ESG integrated into KPMG International’s
Science-Based Target (SBT) which focusses analyze the progress of countries and their reached the target of 100 percent Enterprise Risk Management framework
on achieving a 50 percent reduction of ability to achieve net-zero by 2050. renewable energy procurement. as a principal risk.
KPMG's direct and indirect greenhouse gas Appendix
Established an Internal Carbon Price to A 25 percent reduction in emissions
(GHG) emissions by 2030 in comparison to
cover KPMG International’s and the majority achieved against the 2019 baseline.
a 2019 baseline.
of our Reporting KPMG Firms business
KPMG International awarded a ‘B’ grade
Started working towards 100 percent travel and business operations globally.
for its CDP response.
renewable energy by 2030.
KPMG International awarded a ‘B’ grade for
its CDP response.
Developed a nature and circularity strategy
and roadmap for our operations, including
our supply chain.
KPMG created in-house Climate IQ tool to
help companies identify, quantify and
manage their climate-related risks.
Conducted our first TCFD compliant
scenario analysis utilizing Climate IQ.
Figure 1 — Our climate journey
Our global impact Introduction
Introduction
We believe environmental, social and governance

(ESG) considerations should be at the core of our
business to ensure that we have a thriving network Governance
Other organizations we support or work closely with include:
of firms that makes a positive, lasting impact on the
world. The KPMG global organization aims to grow
sustainably by managing its own climate impacts and Alliance for a Just Energy Transition The Carbon Call
leading by example while supporting KPMG firms’ Strategy and
clients’ ability to do the same. That means identifying CDP (formerly the Carbon Disclosure UN Global Compact scenario analysis
the trends affecting clients, communities and wider Project)
society, and anticipating the impact of our work and UNFCC Race to Zero
our influence on the organizations we support. We International Sustainability Standards Metrics and targets
are bringing the expertise of KPMG’s professionals,
Board (ISSB) World Business Council for Sustainable
globally, to understand climate impacts, reduce
greenhouse gas (GHG) emissions, scale renewable Development (WBCSD)
energy, and integrate climate risk into corporate Net Zero Urban Program
Continuing our
strategies both within our organization and for clients World Economic Forum climate journey
worldwide. We’ve also advised extensively on green RE100 (The Climate Group)
finance and are working with civil society partners World Wildlife Fund for Nature
to drive systemic change and accelerate the energy Science Based Targets Network (SBTN)
transition journey without delay. Appendix
Sustainable Markets Initiative

As part of our commitment, KPMG is a member or
supporter of leading taskforces, standard‑setting
bodies and other organizations supporting the
global economy’s transition to net-zero, including
the TCFD, the Taskforce for Nature‑related Financial
Disclosure (TNFD), the Global Reporting Initiative
and the Glasgow Financial Alliance for Net Zero
(GFANZ).
What is the Task Force on Climate-related
Financial Disclosures?
Introduction
Introduction
Governance
The Financial Stability Board (FSB) created the Task the Companies Act and guidance on climate-related The TCFD has served as a market-
Force on Climate-related Financial Disclosures (TCFD) financial disclosures. Further, with the adoption
in 2015 to enhance climate-related financial risk of TCFD recommendations in the International
leading standard for climate-related
Strategy and
disclosures. Prior to the framework’s introduction, Sustainability Standards Board’s climate-related and disclosures. Many countries and scenario analysis
stakeholders lacked publicly available and transparent general sustainability-related disclosure standards, governing bodies have adopted its
information on the plans and capabilities of climate risk reporting is coming of age.
businesses to transition to a low-carbon economy
recommendations and encouraged
and adapt to a warming planet. The TCFD has served The ISSB was set up in 2021 at the UN Climate business participation and action. Metrics and targets
as a market-leading standard for climate-related Change Conference (COP26) to develop globally
disclosures. Many countries and governing bodies comparable sustainability information for the capital
have adopted its recommendations and encouraged markets. COP28 in 2023 marked the completion
Continuing our
business participation and action. of the TCFD’s work and the formal disbandment
climate journey
of the Task Force, with its recommendations being
TCFD aligned disclosures are becoming a integrated into the ISSB standards, and the IFRS
requirement in a number of jurisdictions, such as the taking over the monitoring of progress on companies’
European Union’s Corporate Sustainability Reporting climate-related disclosures. Appendix
Directive (CSRD) and the UK Government’s update to
Elements of the TCFD Introduction
Introduction
The TCFD structured its recommendations around four key pillars for integrating climate into an organization — Governance, Strategy, Risk Management, and Metrics and
targets, as illustrated below:
Governance
Core elements of TCFD

Strategy and
scenario analysis
Governance
Metrics and targets
Integrating climate-related considerations across all levels of governance, establishing a clear link
between the business’ long term growth and performance.
Strategy
Continuing our
Strengthening strategic resilience to climate change, embedding scenario planning approaches climate journey
and climate-related considerations into all key decision making processes.
Risk management
Appendix
Establishing robust climate risk management procedures, and integrating them into existing processes.
Metrics and
targets
Implementing and measuring more encompassing climate-related targets, moving beyond carbon
emissions towards the overarching environmental performance of its entire operations.
Figure 2 — Structure of the TCFD
TCFD index Introduction
Introduction
Our report has been structured around the four pillars of the TCFD, aligned with its 33 recommendations. These recommendations are contained within 11 disclosure
areas, outlined in the table below:
Governance
Pillars Disclosure area Report Section
3. Governance: ‘Global Management Team
Strategy and
Governance a) Describe board oversight of climate-related risks and opportunities. support of climate-related risks and
scenario analysis
Disclose the organization’s opportunities’
governance around climate-related 3. G
overnance: ‘Global Management Team
b) Describe management’s role in assessing and managing climate-related
issues and opportunities. support of climate-related risks and
risks and opportunities.
opportunities’ Metrics and targets
Strategy a) Describe the climate-related risks and opportunities the organization has 4. S
trategy and scenario analysis: ‘Climate-
identified over the short, medium and long term. related risks and opportunities’
Disclose the actual and potential
impacts of climate-related risks and 4. S
trategy and scenario analysis: ‘Integrating Continuing our
b) Describe the impact of climate-related risks and opportunities on the
opportunities on the organization’s the findings of scenario analysis into risk climate journey
organization’s businesses, strategy and financial planning.
business, strategy and financial management and business planning’
planning where such information is c) Describe the resilience of the organization’s strategy, taking into consideration 4. S
trategy and scenario analysis: Scenario
material. different climate-related scenarios, including a 2°C or lower scenario. analysis
Appendix
a) Describe the organization’s processes for identifying and assessing climate-
5. Risk management
Risk Management related risk.
Disclose how the organization 5. Risk management: ‘Managing climate
b) Describe the organization’s processes for managing climate-related risk.
identifies, assesses and manages risks’
climate-related risks. c) Describe how processes for identifying, assessing and managing climate- 5. R
isk management: ‘Integrating climate into
related risks are integrated into the organization’s overall risk management. Enterprise Risk Management’
a) Disclose metrics used by the organization to assess climate-related risks
Metrics and targets 6. Metrics and targets
and opportunities in line with its strategy and risk-management process.
Disclose the metrics and targets b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas 6. Metrics
and targets: KPMG’s greenhouse gas
used to assess and manage (GHG) emissions and related risks. footprint
relevant climate-related risks and
c) Describe the targets used to manage climate-related risks and opportunities
opportunities. 6. Metrics and targets
and performance against targets.
Table 1 — TCFD index
Climate risk disclosure self-assessment Introduction
Introduction
We believe that managing our ESG impacts is • The Head of Global ESG who co-ordinates the Climate-related considerations are also factors in
fundamental to our success and managing our development of a global approach to ESG client established enterprise risks related to our business
climate‑related risks and opportunities is an important strategy, and supports KPMG firms in their model and business resilience. Governance
part of this. Our approach to ESG, laid out in our implementation of that strategy.
Global Code of Conduct, includes a commitment Metrics and targets
to “act as responsible corporate citizens, playing KPMG International’s Global Board is periodically
KPMG firms, as a whole, are working towards a
an active role in global initiatives relating to climate updated on both KPMG’s Our Impact Plan and our Strategy and
50-percent decarbonization target that has been
change” and to “manage our environmental impacts strategy regarding ESG client services. scenario analysis
validated by the Science Based Targets initiative (SBTi),
so as to limit them.” We believe that a fundamental
with the GCR being our long‑established process for
part of this commitment is publishing climate-related Strategy
measuring and monitoring decarbonization progress, in
disclosures that address the climate impacts we
Utilizing scenario analysis, we have identified climate line with the Greenhouse Gas Protocol. Metrics and targets
face as a global organization, the work we’ve done to
risks and opportunities that we expect to have an
address them and our ambition for the future. As part
impact on our global organization as we adjust Our development areas
of our first step on this journey, we have assessed our
to a warming climate and transitioning economy.
disclosure against best practice, including the TCFD Continuing our
The insight from this exercise is helping shape our
recommendations and ISSB standards. This review has To ensure we preserve long-term resilience and climate journey
business strategy, which supports our efforts to
highlighted areas where we are currently making good business value, we need to continue to improve the
decarbonize. The scenario analysis is also helping
progress and where there is still work to do. integration of climate risk into our business. Governance
shape our approach to opportunities and investments
in client services amid the transition to a net-zero is key to supporting this path forward — we need
Appendix
Our progress to date global economy. Climate considerations are also to ensure that existing governance structures are
being applied to our supplier engagement to support underpinned by understanding, reporting lines and
the decarbonization of our supply chain. Strategic responsibilities regarding climate issues.
Governance
investment is being made in ESG research and
The management of ESG — KPMG’s Our Impact Plan By expanding and improving the breadth of data
development to ensure our ongoing support of KPMG
(KPMG International’s approach for mitigating its ESG available to better inform modelling and assumptions,
firms’ clients on their ESG journeys.
operational impacts across the global organization) we see opportunities to expand our scenario analysis
and our ESG client strategy — is integrated across Risk Management and identify additional emerging risks to our global
the leadership of KPMG International, specifically: organization. We will also need to build upon our
In 2023, we introduced ESG (including climate process for prioritizing climate risks and opportunities,
• The Global Head of Corporate Affairs who is change) as a principal risk in KPMG International’s and assessing materiality, and ensure that these
accountable for Our Impact Plan Enterprise Risk Management (ERM) framework — a discussions are aligned within our business strategy,
significant change that will help shape the way ESG financial planning and risk-management processes.
risks are considered across the global organization.
Governance
Introduction
Governance
Strategy and
scenario analysis
Metrics and targets
Continuing our
climate journey
Appendix
KPMG International structure and governance Introduction
KPMG is a global organization of professional services

firms providing Audit, Tax and Advisory services. Global Council
KPMG is the brand under which the member firms of All KPMG firms (without sub-licensees) Governance
Governance
KPMG International operate and provide professional
services. KPMG firms are independent legal entities
and, together they form the KPMG global organization.
Climate risks and opportunities are independently Global Board Strategy and
managed by KPMG firms, with KPMG International Global Chairman, 3 Regional Chairmen and other members (maximum 28 members) scenario analysis
acting as the co‑ordinating entity for the overall benefit
of the KPMG global organization. KPMG International
facilitates service quality across the organization
Metrics and targets
by establishing common policies, processes and
standards to be applied across KPMG firms. KPMG
International’s governance bodies comprise the
Quality and Risk
Global Council, the Global Board and its committees, Executive Governance Audit Quality Continuing our
Management
the Global Management Team (GMT) and the Global Committee Committee Committee climate journey
Committee
Steering Groups, a certain number of which have
climate oversight responsibilities, as illustrated below.
KPMG firms are generally managed locally and each Appendix

is responsible for its own obligations and liabilities. Global Management Team
A number of firms have also established their own
Global Chairman; Heads of Audit, Tax and Advisory; Quality, Risk and Regulatory;
leadership and governance structures to manage
People; Clients and Markets; Global Chief Administrative Officer;
climate-related issues. More information on the Global COO; Global Chief Digital Officer; General Counsel; Global Head of Corporate Affairs
legal structure and relationship between KPMG
International and the KPMG firms can be found in our
KPMG International Transparency Report 2023 and Figure 3 — KPMG International structure and governance
KPMG: Our Impact Plan 2024 update.
The Global Board is the principal governance and individuals who are also KPMG firm senior partners. KPMG brand and reputation, overseeing the Global
oversight body of KPMG International and meets at The list of Global Board members as of 1 October, 2023 Management Team, and approving policies with which
least four times a year. The Global Board is led by the is set out on the Leadership page of our website. The KPMG firms have agreed to comply. The Global Board
Global Chairman and CEO, Bill Thomas, and includes Global Board’s key responsibilities include approving is periodically updated on both KPMG’s Our Impact
the Chairman of each of the regions and a number of global strategy as well as protecting and enhancing the Plan and our strategy regarding ESG client services.
Global Management Team support of climate-
related risks and opportunities
Introduction
Governance
Governance
The Global Board has delegated certain responsibilities • Developing the global strategy: this covers our The Global Head of Corporate
to the GMT, including the development of global clients and markets strategy, which includes the
strategy, on which the GMT works together with the integration of climate considerations and ESG
Affairs, a member of the GMT who
Strategy and
Executive Committee of the Global Board. The GMT more broadly into our service offerings; and where reports directly to the KPMG Global scenario analysis
supports KPMG firms in their execution of the global appropriate, the alignment of investments across Chairman and CEO, has oversight of
strategy and policies and holds them accountable to the KPMG global organization.
their commitments. The GMT, along with their teams
KPMG’s Our Impact Plan (including
and steering groups, also works with the KPMG firms • Developing KPMG’s Our Impact Plan: this in relation to climate change). The Metrics and targets
outlines KPMG International’s operational strategic
to drive progress against key KPMG International
ESG strategies (including in relation to climate
Global Head of Corporate Affairs
initiatives such as Our Impact Plan (including Climate
commitments) and the related targets. change). leads the Global Corporate Affairs
Steering Group and reports to the Continuing our
• Recommending global targets, metrics or climate journey
The Global Head of Corporate Affairs, a member of Global Board on any significant
ambitions: considering and, where appropriate
the GMT who reports directly to the KPMG Global
Chairman and CEO, has oversight of KPMG’s Our
recommending targets, metrics or ambitions to changes to that strategy. With
support our progress in achieving our climate and
Impact Plan (including in relation to climate change).
broader ESG commitments.
regards to client services, KPMG Appendix
The Global Head of Corporate Affairs leads the International’s Head of Global ESG
Global Corporate Affairs Steering Group and reports • Monitoring progress toward Our Impact Plan
to the Global Board on any significant changes to co-ordinates the development of
commitments: reviewing KPMG’s annual Our
that strategy. With regards to client services, KPMG Impact Plan update, which includes KPMG’s a global approach to ESG client
International’s Head of Global ESG co-ordinates decarbonization and climate risk reporting. strategy and supports KPMG firms
the development of a global approach to ESG
client strategy and supports KPMG firms in their • Risk oversight: reviewing on a quarterly basis in their implementation of that
implementation of that strategy. The activity the enterprise-level risks, including ESG and other strategy.
GMT drive in relation to climate-related issues and enterprise risks where ESG and climate intersect.
strategy covers both KPMG’s Our Impact Plan and
• Budgets and forecasting: reviewing budgets and
our strategy regarding ESG client services including:
forecasts, including elements related to ESG client
services and other climate-related activity.
KPMG International’s climate strategy, is focused on both our operational impact on the planet, and how we help KPMG firms’ clients understand and manage their own
impact on the planet. As such, management responsibilities relating to climate considerations are typically split between internal-facing (i.e. KPMG’s Our Impact Plan) and
external-facing (i.e. the global approach to ESG client-service strategy) roles. The key climate-related management roles are set out below.
Introduction
Governance
Governance
CEO Global Board
Strategy for ESG Our Impact Plan Strategy and

client services Strategy scenario analysis
COO Steering Group + Global COO + Global Head of Global Head of Corporate Affairs Metrics and targets
Clients and Markets Clients and Markets Corporate Affairs Steering Group
Steering Group
Continuing our
climate journey
ESG Working Head of Global Head of Global Sustainability Our Impact Plan
Group ESG (Our Impact Plan) Working Group
Appendix
Figure 4 — Executive roles and responsibilities on climate
Here are detailed descriptions of individuals and committees with management responsibility over climate-related risks and opportunities:
C-Suite Responsibilities Reporting line to Board Process for being informed

representative on climate-related about climate-related Introduction
issues issues
Chief Executive The CEO has responsibility for the development of KPMG’s Our Impact Plan and the ESG Has oversight of ESG Informed of KPMG firms’
Officer (CEO) client-service strategy. The CEO is also the Chairman of the Global Board and therefore matters brought to the climate-related issues via COO
Governance
Governance
has oversight of ESG matters brought to the Board. Global Board. (ESG client-service strategy
climate considerations) and
by Global Head of Corporate
Affairs (operational climate
Strategy and
considerations).
scenario analysis
Global Head of The Global Head of Corporate Affairs is responsible for KPMG’s Our Impact Plan (KPMG Yes — twice yearly. Global Head of Corporate Affairs
Corporate Affairs International’s operational ESG strategy) and has oversight and accountability for these is informed of climate-related
areas. Day-to-day responsibility is delegated to the Head of Global Sustainability (Our issues via the Corporate Affairs
Metrics and targets
Impact Plan). Steering Group and Head of
Global Sustainability (Our Impact
The Global Head of Corporate Affairs monitors climate-related issues through oversight
Plan).
of the day-to-day support and monitoring of KPMG firms’ ESG activities provided by the
Head of Global Sustainability (Our Impact Plan) and the Our Impact Plan Working Group. Continuing our
Corporate Affairs Steering Group climate journey
The Corporate Affairs Steering Group, consisting of the Heads of Corporate Affairs
from a number of the largest KPMG firms and regions, supports the Global Head of
Corporate Affairs in shaping and testing the OIP (operational ESG) strategy prior to it Appendix
being escalated to the GMT and the Global Board.
Head of Global The Head of Global Sustainability (Our Impact Plan) has day-to-day responsibility for Via Global Head of The Head of Global Sustainability
Sustainability supporting KPMG firms implementing their operational ESG strategy locally, and reports Corporate Affairs. (Our Impact Plan) is supported
(Our Impact to the Global Head of Corporate Affairs. The Head of Global Sustainability (Our Impact by the Our Impact Plan Working
Plan) Plan) leads the Our Impact Plan Working Group. Group, ensuring information
on OIP progress by the KPMG
Our Impact Plan Working Group
largest firms and each region
The Our Impact Plan Working Group is informed on climate-related issues by the KPMG KPMG operates is understood.
Planet Council, a group of decarbonization and climate risk subject-matter experts
from KPMG International and the largest KPMG firms and regions. Periodically, other
subject-matter experts, including colleagues responsible for KPMG’s Enterprise Risk
Management Process, advise the Planet Council.
The Planet Council is led by KPMG International’s Global Planet, Decarbonization and
Climate Risk lead, who reports into the Head of Global Sustainability (Our Impact Plan)
and works with KPMG firms to support the development of their climate strategies.
C-Suite Responsibilities Reporting line to Board Process for being informed
representative on climate-related about climate-related
issues issues
Introduction
Chief Operating The Global Chief Operating Officer is responsible for assisting in the development of the Via CEO. Informed of climate-related
Officer (COO) global strategy and the global strategy execution roadmap for KPMG firms. issues via the COO Steering
Group and Global Head of Clients
COO Steering Group and Markets.
Governance
Governance
The COO Steering Group — consisting of the Chief Operating Officers (COOs) from
several of the largest KPMG firms and regions — supports the Global Chief Operating
Officer in shaping and testing the global strategy and is accountable for implementation
(including ESG client-service strategy) and budgets among respective KPMG firms. Strategy and
scenario analysis
Global Head The Global Head of Clients and Markets is responsible for supporting KPMG firms with Yes — twice yearly. Informed of climate-related issues
of Clients and their management of transition risks and opportunities, including sector strategy and via the GCM Steering Group and
Markets service offerings. In addition, this role includes oversight of ESG impacts to KPMG’s Head of Global ESG.
revenue. Metrics and targets
GCM Steering Group
The GCM Steering Group — consisting of the Heads of Clients and Markets from a
number of the largest KPMG firms and regions — supports the Global Head of Clients Continuing our
and Markets in identifying risk and opportunities in industries and service offerings. This
climate journey
includes those relating to climate change and ESG, in addition to shaping, testing and
managing implementation of the global strategy and strategic investments to capitalize
on revenue opportunities.
Head of Global Head of Global ESG is responsible for assisting in the development and operationalizing Via Global Head of Clients The Head of Global ESG is Appendix
ESG of KPMG’s global ESG client-service strategy, including support to manage transition and Markets. supported by our Global ESG
risk in respect to KPMG firms’ clients and revenues. Functional Leads (Audit, Tax
and Legal and Advisory) and
ESG Steering Group
our Global Solutions Leads
The ESG Steering Group, consisting of ESG leaders from a number of the largest KPMG (including Assurance, Reporting,
firms and regions, as well as the Head of ESG for each function, supports the Head of Sustainable Supply Chain, Circular
Global ESG in shaping and testing the global ESG strategy, provides strategic oversight Economy etc.).
to the delivery of the ESG strategy, and manages risks escalated to the group.
Table 2 — Detailed description of responsibility for climate-related risks and opportunities
ESG remuneration Introduction
Within KPMG International, reward-based

remuneration and bonuses are linked to appraisal
outcomes which reflect the expectations of the role Governance
Governance
and, therefore for roles with specific responsibilities
for ESG matters, the reward-based remuneration
is linked to the successful performance of those
responsibilities. KPMG firms manage remuneration Strategy and
and bonuses locally and therefore details are not scenario analysis
included here.
Metrics and targets
Continuing our
climate journey
Appendix
Strategy and
Introduction
Governance
scenario analysis Strategy and

scenario analysis
Metrics and targets
Continuing our
climate journey
Appendix
Our ambition Introduction
KPMG is committed to being a responsible global citizen, and supporting the global economy, our global organization, our clients, and communities in which we operate,
transition to net-zero in a fair and equitable manner. We are committed to being a sustainable, resilient business providing careers for colleagues around the world,
and to being a market leader in ESG, climate and net-zero transition-related services. It is essential for KPMG to build a detailed understanding of our climate risks and Governance
opportunities profile across our whole value chain.
Strategyand
Strategy and
What are climate-related risks Physical risk

scenario analysis
scenario analysis
and opportunities?
Metrics and targets
Exposure of an organization’s assets and/or
value chain to climate-changes, including rising
temperatures, adverse weather events such as
flooding, drought and rising sea levels, and the Continuing our
human impact these events have on our staff, climate journey
KPMG understands climate risk to be the potential for The transition to a low-carbon economy also presents value chain and wider society. Physical risks
climate change to create adverse consequences for opportunity as capital is diverted from carbon-intensive can be acute or chronic.
human or ecological systems that undermine financial activities to low-carbon alternatives. Understanding
stability. This includes negative impacts on lives, where and when this opportunity will emerge — Appendix
livelihoods, health and wellbeing, economic, social and and how KPMG can support clients to secure that
cultural assets, as well as investments, infrastructure,
services provision, ecosystems and species.
opportunity — is critical to long-term success.
KPMG assesses climate risks over short, medium-

Transition risk
Climate risks are typically categorized as either physical and long-term horizons, defined as 0–1 year, 2–3 Exposure amid the transition to a low-carbon
or transition risks. years, and 4–10 years, respectively, as part of KPMG economy that may manifest across existing
International’s ERM program. More information on this risk types, including heightened regulatory,
can be found in the Risk Management section. reputational, policy, legal, technology and
market risks.
Climate-related
risks and
Introduction
opportunities Governance
Strategyand
Strategy and
scenario analysis
scenario analysis
To achieve our ambition of being a resilient,
sustainable business and being a market leader
in ESG, it’s imperative that we have a robust
and thorough approach to identifying, assessing Metrics and targets
and mitigating our climate risks and capturing
our climate opportunities. That’s why we have
integrated ESG risk (including climate) as a principal
risk in the KPMG International ERM framework, Continuing our
and used KPMG’s climate scenario analysis tool climate journey
Climate IQ, to help us understand our climate
risk and opportunity exposures. The results of our
climate risk and opportunity analysis are set out Appendix
in the following sections, with details on our risk
and opportunity identification processes and our
assessment of materiality of identified risks in the
Risk Management section.
Key climate-related risks faced by KPMG Introduction
Risk Category Description Time Likelihood Impact KPMG approach

horizon
Governance
Acute/ Physical Extreme Medium Acute — Extreme weather could cause KPMG firms to suffer Mitigation
chronic risk weather to long virtually direct or indirect financial loss due to the impact
KPMG firms have well-established operational
physical risk1 having a term certain on offices or other business support locations,
climate resilience processes that are guided by Strategyand
Strategy and
temporary our people, suppliers, clients and communities
Chronic — available international standards and embedded in scenario analysis
scenario analysis
or long-term we operate in. While KPMG currently experiences
virtually policy where possible.
impact on periodic disruption from extreme weather events,
a localized certain we anticipate that the frequency and severity of Location-related disruption
region or these events will increase in the medium to long
• Remote working arrangements allow KPMG Metrics and targets
business term, potentially resulting in:
firms to pivot operations amid climate-related
sector
• Increased insurance premiums or lease costs on disruption.
buildings previously damaged.
• KPMG offices and other support locations are
• Lost revenue due to business/travel disruption. mainly leased and our property strategy factors
Continuing our
in operational resilience including climate climate journey
• Lost revenue due to client business disruption.
factors.
• Lost revenue/increased costs due to critical
supplier disruption. Travel and other supply-chain disruption
Appendix
• Loss of revenue due to wider disruption in the • KPMG supplier and procurement processes
communities we operate in. include operational resilience requirements,
with climate risk considerations being integrated
• Health and wellbeing issues with our people due into these. Remote working arrangements
to extreme weather events. allow KPMG firms to pivot operations amid
climate‑related disruption.
In the case of severe long-term impacts such as
flooding or significant temperature increases. Client and wider socio-economic-related disruption
impacts could also include:
• The KPMG global organization is well diversified
• Costs incurred and/or revenue lost as our by sector and geography, which limits the
business, clients and/or critical suppliers need to potential impact of disruption in one particular
withdraw from specific locations or relocate. sector or geographic location.
• Revenue loss from significant disruption in an
individual sector.
1
physical climate risk assessment was completed for the majority of KPMG’s offices globally, using 1.5°C, 2.5°C and 5°C warming pathways across eight different hazards. Results showed that more than 8 percent of offices will
A
be deemed high risk by 2030, with projected increases in subsequent years. More details on how this risk could emerge under different scenarios can be found in Strategy and scenario analysis: Scenario analysis: Physical risk.
horizon
Market/ Transition Contraction Medium Very likely KPMG firms’ portfolio of clients includes sectors Mitigation Introduction
financial risk risk or failure to long which have a greater exposure to transition risk and
Portfolio business model
of specific term greater impacts in case of failure to transition. The
industry potential impact to KPMG of businesses failing to • KPMG has a portfolio-based business model
sectors transition include: and we are well diversified by sector and
Governance
with high geography, which helps mitigate the potential
• Revenue loss due to reduced demand as clients’
exposure to impact of a single sector contracting. It also
businesses contract or fail.
transition means we are well placed to adapt to changes
risk • Revenue loss due to reduced demand from across the portfolio.
Strategyand
Strategy and
clients incurring increased costs amid failure to scenario analysis
scenario analysis
Services and product offering
decarbonize.
• Within our multi-disciplinary model, our core
• Failure of KPMG firms to adapt their services
client product and service offerings have a
and products to client needs as they transition to
range of ESG and climate-related products and Metrics and targets
a net-zero economy, including supporting them
services that are designed to support clients on
with decarbonization and climate transition.
their decarbonization journey.
Scenario analysis highlighted key client sectors that
ESG training
may be impacted by climate-related risks. More Continuing our
detail on how this risk could emerge under different • We will continue to upskill our people with climate journey
scenarios can be found in Strategy and scenario training on ESG, climate risk and transition
analysis: Scenario analysis: Transition risk scenario services, including collaboration with leading
analysis findings. academic institutions such as the University of
Cambridge Judge Business School, New York Appendix
University, and the European Business School
(EBS).
horizon
Market/ Transition Failure to Medium Likely The direct financial impact of failing to appropriately Mitigation Introduction
financial risk risk appropriately term decarbonize our own operations and our supply
• KPMG has set a 2030 SBT and will continue to
decarbonize chain could result in:
refine our decarbonization plan, including travel
our
• Increased overhead costs due to the increased management and supplier engagement.
operations,
cost of carbon, both directly through taxation and Governance
supply chain • We will set an appropriate long-term 2050
indirectly via our supply chain.
and property decarbonization and net-zero target.
portfolio • Increased supplier costs amid more-stringent
climate requirements. • We will continue to demonstrate progress on
Strategyand
Strategy and
climate commitments through transparent
scenario analysis
scenario analysis
• Increased recruitment costs. reporting.
Scenario analysis highlights the potential impact Further details of these initiatives and our
of increased carbon costs on KPMG’s business. progress to date can be found in the Metrics and
More details on how this risk could emerge under targets section. Metrics and targets
different scenarios can be found in Strategy and
scenario analysis: Scenario analysis: Transition risk
scenario analysis findings.
Continuing our
Reputational Transition Actual or Medium More likely KPMG is seeing increasing expectations from Mitigation climate journey
risk perceived term than not a range of key stakeholders, both internal and
• KPMG firms frequently engage with
failure to external, regarding our approach to climate
stakeholders, including clients, governments,
demonstrate change, climate transition and our progress on
our people, the charitable sector, regulators
the expected commitments. If KPMG fails or is perceived to fail Appendix
and industry bodies and the general public,
commitment to meet stakeholder expectations, the reputational
to understand how their expectations around
to climate damage could result in:
climate change issues are evolving.
change
• Revenue loss as clients or potential clients are
unwilling to engage with us. • KPMG’s Our Impact Plan has been developed
in tandem with our client-facing subject-matter
• Inability to work with leading suppliers in experts, ensuring that best practices and
business-critical areas. client expectations are considered under the
strategy.
• Recruitment costs related to increased employee
turnover and challenges in recruiting talent. • Additionally, we are supporting climate and
ESG initiatives beyond our value chain, such
as the development of industry standards and
grant support for nature initiatives, in line with
our strategic societal net-zero objectives.
horizon
Regulation Transition Failure to Short Virtually KPMG is subject to an increasing number of climate Mitigation Introduction
risk comply with term certain and sustainability-related regulations, including
• This risk is managed by each KPMG firm
current and disclosure standards and carbon taxes. Future
individually as part of business-as-usual
emerging legislation may also require changes to the KPMG
practices. KPMG firms have their own
regulation business model, affecting direct operations as well
governance arrangements and are responsible Governance
as the type of services provided to clients.
for managing their own compliance with
Failure of KPMG International or a KPMG firm to applicable regulations and laws, in line with
meet regulatory requirements may have financial KPMG International policy (with which they
and reputational impacts. must comply), KPMG Code of Conduct and Strategyand
Strategy and
values. scenario analysis
scenario analysis
For example, KPMG’s firm in the UK, and
approximately 18 firms across the EU, will be
required to disclose greenhouse gas emissions and
climate risk data, as per the recommendations of
the TCFD, due to changes to the UK’s Companies Metrics and targets
Act and the EU’s Corporate Sustainability Reporting
Directive (CSRD).
Market/ Transition Decreased Medium Likely Where a KPMG firm has pension or retirement • This risk is managed by each KPMG firm Continuing our
financial risk asset value term funds, and other investments, there is a risk of individually as part of business-as-usual climate journey
or asset asset or investment impairment/devaluation, or practices. KPMG firms have their own
useful life additional costs, due to: governance arrangements and manage assets
leading and liabilities individually.
• An investment’s exposure to transition risk (and Appendix
to write-
failure to transition effectively);
offs, asset
impairment • Failure to comply with emerging regulatory
or early climate reporting.
retirement
of existing
assets in
pension
or other
investments
Table 3 — Key climate-related risks faced by KPMG
Key climate-related opportunities for KPMG Introduction
Opportunity Opportunity Time Likelihood Impact KPMG approach

drivers horizon
Governance
Differentiating Enhancing Medium Very likely Expectations are increasing among Various responses have been implemented to ensure we demonstrate our
ourselves as a reputation term a range of key stakeholders in terms commitments to climate and ESG.
market leader of understanding KPMG’s approach
Increasing KPMG firms frequently engage with key external stakeholders to understand Strategyand
Strategy and
in climate and to climate change and climate
market share how their expectations around climate change issues are evolving. scenario analysis
scenario analysis
ESG transition. There is an opportunity
for KPMG to differentiate itself as a Key focus areas include:
market leader in climate and ESG,
• Proactively responding to emerging regulatory developments and
encompassing internal commitments
supporting the development of frameworks and standards such as the Metrics and targets
and the professional services KPMG
TCFD.
firms provide, ultimately helping to
maintain trust with our clients, the • Setting clear targets and commitments for managing climate risks and
markets and other stakeholders. impact, and providing transparent updates on progress.
Continuing our
Increased trust supports our growth
• Contributing to climate, decarbonization and ESG efforts through thought climate journey
ambition, as this will enhance
our revenue, talent attraction leadership.
and retention, and operational • Maintaining quality and innovation in our climate and ESG-related
efficiencies. services. Appendix
• Identifying areas where KPMG firms could provide pro bono support to
clients.
Opportunity Opportunity Time Likelihood Impact KPMG approach
drivers horizon
Products and New Short to Very likely Increased demand for climate and KPMG’s global strategy has been developed with a focus on the impact Introduction
services — products and medium ESG-related professional services, of ESG across all professional services in order to capitalize on potential
Increased services term if capitalized upon, improves future growth areas amid the global economy’s transition to net-zero. Service and
demand for revenue and financial resilience. product development is based on subject matter expertise, sector insights,
Enhancing
ESG advisory/ Additionally, maintaining quality regional knowledge and alliance partners.
reputation Governance
professional and innovation will further enhance
We have adopted an approach of aligned investment across KPMG’s firms,
services Increasing our reputation and trust in KPMG,
allowing firms to contribute to and benefit from our global delivery assets,
market share enhance employee attraction and
IP, tooling and subject matter experts, while developing local expertise
retention, and potentially support
regarding climate and ESG-related professional services. Strategyand
Strategy and
new partnerships and alliances on
future go-to-market offerings. scenario analysis
scenario analysis
Client opportunities can be categorized into three broad areas:
KPMG recognizes its most- • Regulation and reporting driven — supporting clients regarding
significant lever for positive ESG compliance with emerging ESG regulation, voluntary standards and
impact is through client work by assurance; Metrics and targets
KPMG firms and the role they play in
helping clients respond to a range of • Strategy driven — supporting clients where ESG provides a clear
climate and ESG challenges, driven strategic opportunity.
by regulation, strategy and purpose. Continuing our
• Purpose driven — supporting clients with an approach to business that
climate journey
goes beyond pure commercials.
Sector-related Capacity Medium Very likely KPMG recognizes that as we KPMG’s global strategy has been developed with a focus on the impact
growth building term transition to a low-carbon economy, of ESG across the breadth of our professional services, with KPMG firms Appendix
different client sectors are likely to aligning, expanding and tailoring offerings both to support clients through
New
be impacted by climate opportunities low-carbon transition and capitalize on potential growth areas within the
products and
in different ways. Anticipating the global economy’s transition to net-zero.
services
needs of these sectors and building
By integrating the findings from this analysis into our ESG and business
Increasing our capacity in response can help us
strategy, sector-specific services and solutions being developed are
market share grow revenue and increase market
enabling us to capitalize on growth in these sectors and support our clients
share while supporting these sectors
in maximizing their opportunities, further supported by investments in our
through the transition.
people and technology.
More details on how this opportunity
could emerge under different
scenarios can be found in Strategy
and scenario analysis: Scenario
analysis: Transition risk scenario
analysis findings.
Table 4 — Key climate-related opportunities for KPMG
Scenario analysis Introduction
We conducted quantitative scenario modelling the global organization, therefore giving a broad view of climate policies to limit global warming to 1.5°C
using 4°C and 1.5°C scenario pathways to represent of climate-related risks and opportunities.3 KPMG firms above pre-industrial temperatures. Both scenarios are
a baseline or ‘business-as-usual’ pathway and were selected to serve as good regional proxies for underpinned by the Shared Socio-economic Pathways Governance
a ‘Paris‑aligned’2 trajectory, respectively. These local exposure profiles. (SSPs) published by the International Panel on Climate
scenarios align with the Task Force on Climate-related Change (IPCC).4 The results of the scenario analysis
Financial Disclosures (TCFD) recommendations, The baseline scenario considers how the global help us to understand how key trends and changes to
and utilized our proprietary KPMG Climate IQ tool. economy could look in the absence of new policies the economy may impact our global organization. Strategyand
Strategy and
The transition‑scenario analysis used data from beyond those in place today. The Paris-aligned scenario, scenario analysis
scenario analysis
10 KPMG Reporting firms, representing approximately conversely, simulates a potential future pathway of the Further details on the approach, assumptions and
70 percent of revenues and various regions across world economy, assuming a successful introduction limitations can be found in the Appendix.
Metrics and targets

Global emissions trajectory in 1.5°C and 4°C pathway
Scenario
1.5°C warming 4°C warming
components 60
Continuing our
Moderate global population growth 50 climate journey
Economic which levels off in the second half of
constraints the century. GDP growth in line with 40
Gt CO2/year
historical trends.
Appendix
30
Global climate
No further
Policy policies align
climate policy 20
expectations emissions to
intervention.
1.5°C pathway.
10
Reduced
likelihood Likely increased 0
Physical of severe severity of 2014 2024 2034 2044
impacts climate-related climate-related
weather weather events. 4°C — Global emissions 1.5°C — Global emissions
events.
Figure 5 — Global emissions trajectories under 1.5°C and 4°C warming scenarios
Note: 1 Refer to the Appendix for details of the scenario analysis approach, assumptions and limitations.
2
aris-aligned refers to alignment to the Paris Agreement, which sets out a target to limit global warming to “well below” 2°C and ideally 1.5°C by 2100.
P
3
In-scope KPMG firms: Australia, Brazil, Canada, China, France, Germany, India, Japan, UK and the US.
4
Shared Socio-economic Pathways (SSPs) are paired with Representative Concentration Pathways (RCP).
Transition risk scenario analysis findings Introduction
Client services sectors might improve resilience by adapting their Our greatest transition risks and
businesses to the needs of the transition — for
Our greatest transition risks and opportunities example, diversification and expansion of the opportunities are as a result of
Governance
are as a result of transition impacts — predicted mining industry into metals and minerals needed transition impacts — predicted
contraction and growth — on the sectors to which to facilitate the energy transition. KPMG will
continue to work closely with clients in these
contraction and growth — on
KPMG firms provide services. Given KPMG’s
multi‑disciplinary model, and our exposure to sub-sectors to pursue emerging opportunities as the sectors to which KPMG firms Strategyand
Strategy and
numerous geographies and sectors, transition risks they transition to net-zero and adapt their strategy provide services. Given KPMG’s scenario analysis
scenario analysis
are unlikely to significantly impact our business and resilience efforts.
model and overall revenue ambition. However, the
multi-disciplinary model, and our
scenario analysis highlighted eight key client sectors • Opportunities: The analysis also identified six exposure to numerous geographies
that could experience significant impacts from the sectors which are expected to grow in the 1.5°C Metrics and targets
scenario, presenting opportunities for KPMG
and sectors, transition risks are
transition between now and the year 2050 in the
1.5°C scenario, compared to the baseline scenario. firms. Substantial growth is expected for the unlikely to significantly impact
The following provides an overview of the transition power and utilities sector, driven primarily by our business model and overall
impacts to client sectors: growth of the renewable energy sub-sector, which Continuing our
is fundamental to a low-carbon economy. The revenue ambition. climate journey
• Risk: High transition risk sectors include energy transport and leisure sector is expected to grow
and natural resources sub-sectors, specifically amid increased transportation and leisure services
oil and gas and mining, which may inevitably costs in the period to 2050, despite expected
experience losses if they are unable to adapt declines in demand. The building and construction Appendix
to the net-zero global economy and reduced industry is expected to grow significantly to keep
consumption of fossil fuels. The oil and gas sector pace with increased demand. Additionally, banking
may experience the greatest contraction in a and asset management sectors are expected to
1.5°C scenario, as this will likely feature low- grow, as they may primarily face transition risks
carbon renewable energy sources and higher indirectly via the activities and sectors in which
carbon prices. Risk to the mining industry is, they invest. It is assumed that these sectors may
similarly, driven by an expected reduction in global protect their growth in the period to 2050 through
coal extraction and consumption as part of the diligence and planning regarding exposure of their
transition under the 1.5°C scenario. These sub- investment portfolios.
Note:
1. Refer to the Appendix for details of the scenario analysis approach, assumptions and limitations.
Operational impacts Projected transition impact on cost categories
In addition to identifying priority sectors that may

be impacted by the transition to a low‑carbon
350% Introduction
world, the KPMG Climate IQ tool provides
additional economic insights and corresponding
% Change (Baseline to 1.5 Degrees)

financial impacts under the modelled scenarios. 300%
KPMG’s total operational costs are projected to be
significantly higher by 2050 in the 1.5°C scenario Governance
relative to the 4°C scenario. All cost categories 250%
could increase in a 1.5°C scenario compared to a
4°C scenario due to the policy changes required to
support the transition to a low‑carbon economy. 200% Strategyand
Strategy and
scenario analysis
scenario analysis
Scope 1 carbon costs (CO2e — scope 1) and 150%
renewable electricity costs are expected to exhibit
the most-significant differences by 2050 in terms
of percentage change over the period, the former Metrics and targets
100%
being assumed to grow amid increased carbon
taxation. Similarly, renewable electricity costs are
expected to increase sharply amid the combined 50%
Continuing our
effects of carbon taxation on fossil-fuel-generating
climate journey
technologies and scarcity of low-carbon power
driven by deployment constraints. Following a period 0%
of fluctuation to 2030 for Scope 1 carbon costs — 2020 2025 2030 2035 2040 2045 2050
due to differences in assumed start dates of carbon CO2e costs — scope 1 Fuel costs — electric renewable Other Costs [1] Appendix
taxation across different countries — costs for both
categories are projected to increase through the
remaining period and become most-pronounced Figure 6 — Projected transition impact on cost categories
between scenarios by 2050.
Physical risk scenario analysis findings Introduction
A physical risk assessment5 was performed to The analysis found that by 2030, under the 5°C warming Number of offices exposed to each hazard:
evaluate the exposure of KPMG offices around the scenario, 8 percent of our offices are deemed to be at
globe to the physical impacts of climate change up high-risk from physical climate change impacts, and the Governance
Number and proportion of
to the year 2100. Climate scenarios including 1.5°C, number is expected to increase to 17 percent by the Hazard offices exposed by 2100
2.5°C and 5°C warming pathways (RCP 2.6, RCP year 2100. The modelling suggests that several areas (5°C warming scenario)
4.5 and RCP 8.5, respectively) were considered will experience an increase in the proportion of their
across eight different hazards: high-risk properties. These climate impacts could not Strategyand
Strategy and
only affect the physical locations and infrastructure, but
also our staff, local communities and the local economy.
Extreme wind
100 percent scenario analysis
scenario analysis
As locations become undesirable for people and

01 Coastal inundation;
84 percent
organizations, they also become undesirable for buyers,
Soil movement Metrics and targets
investors and insurers.
02 Soil movement;
Analysis of exposure by hazard type forecasts that
03
29 percent
Pluvial or surface flooding; extreme wind and soil movement have the potential to Continuing our
Riverine flooding
impact the greatest number of our offices in both the climate journey
short and long term.
04 Riverine flooding;
05 Extreme wind;
Physical risk management
KPMG locations and offices are managed by the local

Surface-water
flooding 10 percent Appendix
06 Forest fire; KPMG firms. This output of the physical risk analysis
07 Freeze-thaw;
has been shared with KPMG International’s Operational
Resilience function and KPMG firms, so they can better
understand how climate change will affect their local
Coastal
inundation 8 percent
offices and people, communities and regions, and to
08 Extreme heat. update and enhance their local business resilience and
continuity arrangements should the world see the worst
effects of climate change.
Forest fire
1 percent
(Please see definitions provided in the Appendices.)
Table 5 — Number of offices exposed to each hazard
5
Physical risk assessment provided by XDI: The Cross Dependency Initiative.
Integrating the findings of scenario analysis into risk
management and business planning
Introduction
Governance
Integration of the outcomes of our climate risk and information) — is continually evolving and improving. As part of integrating these findings, we have
opportunity assessment and scenario analysis into Our progress in these areas also forms part of the identified seven key levers to support us today and
our finance, business planning, risk and other relevant evaluation of our climate strategy and performance, in the future on our journey to achieving net-zero and Strategyand
Strategy and
processes — for instance KPMG International’s which our Global Board reviews annually. embedding climate more deeply into our business scenario analysis
scenario analysis
ERM framework (see Risk Management for more processes long term.
Our route to net-zero

Metrics and targets
Decarbonization Net-zero
Energy Travel Circularity Carbon Continuing our

efficiency Balancing an Embedding removals climate journey
Leads to immediate approach to travel circularity principles, High quality carbon
impact on energy Renewables with delivering Supply chain to minimize Nature positive removals support
consumption and Sourcing 100 percent remotely, As our largest area resource use and Achieving net-zero net-zero through
carbon emissions renewable electricity maintaining of emissions, we waste throughout requires us to both removing emissions
with the goal of is key to decarbonizing operational need to work with the procurement understand and we cannot address Appendix
100 percent while growing, and effectiveness while suppliers who lifecycle, reduces reduce our impacts through emissions
renewable energy. supporting the reducing emissions. share our vision on our emissions. and dependencies reduction activities.
expansion of climate change and on nature, and act
renewable markets. decarbonization. to restore and
protect it.
Internal carbon
Internal price
carbon price
2030 decarbonization levers
2050 decarbonization levers

Figure 7 — Key levers for integrating climate into our business operations
We have integrated climate considerations into 3. Internal carbon price 4. Acquisitions and divestments
our risk management and business planning in the In 2022, an internal carbon price (ICP) was KPMG International made no acquisitions or
following ways: established by KPMG International and is being divestments during the financial year 2023
used by the majority of Reporting KPMG Firms. reporting period. As KPMG firms are locally Introduction
1. Indirect costs and investment expenditure The ICP is designed to help incentivize changes owned and managed, any acquisitions and
KPMG’s indirect costs are linked to our in behaviour and ensure climate is integrated divestments made by KPMG firms are not
emissions and energy consumption. Our Global into our decision-making process, while included in this disclosure. However, these
Climate Response (GCR) program assesses producing an investment budget to support transactions must comply with KPMG’s Global
Governance
the risks and opportunities of direct operations decarbonization initiatives.6 A primary objective Code of Conduct and Global Values, which
associated with climate change, providing for the ICP within KPMG is to support a align with the UN Global Compact. The process
KPMG firms with a framework to identify reduction in corporate air travel — a significant for acquisitions and divestments, and the
and implement emissions and energy-saving contributor to our carbon emissions. KPMG due diligence required in these transactions, Strategyand
Strategy and
measures, including specifying green building International has an ICP floor price which many is evolving with leading practices and our scenario analysis
scenario analysis
standards where practicable. In the long term, KPMG firms’ exceed based on local objectives understanding of ESG and climate change.
this helps manage KPMG’s exposure to an and economic considerations. We recognize the
increased cost of carbon. price will need to increase over time and we 5. ESG investment
will follow leading practices, including guidance ESG client services and the impact of ESG Metrics and targets
2. Decarbonizing our supply chain set out by the High-Level Commission on across the range of professional services
We actively engage our suppliers and other Carbon Prices to ensure KPMG International’s KPMG firms offer are key focus areas for
organizations on climate-related issues. From ICP appropriately integrates the cost of carbon our global strategy. To support this, KPMG’s Continuing our
2021-2023, KPMG International and 10 KPMG into our operations. strategy involves aligned investment across climate journey
firms engaged in the CDP Supply Chain Program. KPMG firms to develop services that meet
This helped us understand the approach of The ICP funds raised will, at the discretion of the future ESG demands of clients in Audit
suppliers, representing approximately 70 percent KPMG firms, be invested in decarbonization and Assurance, Tax and Legal and Advisory.
of procurement spend, to decarbonization, activities considered to be most impactful, This includes developing our people and Appendix
emissions targets and progress. This in turn including direct operations and facilities’ skills, alliances, tools, and data and analytics
enabled us to develop a supplier roadmap efficiency, through to nature-based solutions solutions to support KPMG firms’ clients in
and globally aligned KPIs, and to enhance the supporting societal net-zero. Please see the being aligned to regulatory, strategic and
accuracy of Scope 3 Category 1 reporting KPMG: Our Impact Plan 2024 update for more purpose-led opportunities.
(Purchased Goods and Services). information.
6
The ICP applies to Scope 1, Scope 2 and Scope 3 Business Travel (Category 6) emissions.
Research and development (R&D) aligned, 6. Carbon credits, removals and beyond value
KPMG firms’ investments are being made at the chain mitigation
intersection of ESG and technology, helping our
clients integrate ESG into their core business
metrics, strategy and decision-making processes.
In line with the SBTi Net-Zero Standard 7, KPMG
recognizes that some emissions cannot be abated
through decarbonization alone, therefore carbon
New three-year Introduction
Examples of our strategic investment in R&D

removals will have a key role to play in reaching
net‑zero at an appropriate point in our decarbonization
journey. Additionally, KPMG recognizes the imperative
alliance with WWF
include:
for increased investment in Beyond Value Chain Governance
In 2023, KPMG International formed
• Our global decarbonization hub, which Mitigation (BVCM), both to support efforts toward a three-year alliance with WWF-UK9 to
plays a critical role in coordinating our efforts societal net-zero and the restoration and preservation
support two important nature-based
with professionals across KPMG firms on a of nature and biodiversity. This is especially relevant
projects in Latin America and Africa Strategyand
Strategy and
range of topics, including energy transition, given the reach of our global organization.
over the next three years: scenario analysis
scenario analysis
built environment, climate policy, climate
risk and carbon markets. Our subject matter At the same time, we understand the impact that
experts work collaboratively to bring clients low-quality carbon offsetting could have on our • Securing Colombia’s Protected
new solutions based on global learnings, best reputation and in hindering progress for the global Areas
Metrics and targets
practices and ESG research. economy’s transition. Therefore, we are working • Trillion Trees in East Africa
to define a consistent, credible approach to carbon
• Leveraging technology and helping clients credits and BVCM that is aligned to: guidance The funds for these projects will
assess climate risks under a range of provided by the SBTi; other independent bodies come out of funds raised by KPMG Continuing our
scenarios with KPMG’s Climate IQ — our supporting trust and transparency on the buy- and International’s Internal Carbon Price. climate journey
multi-disciplinary risk-management tool sell-side of carbon credits; and our client-facing
enables companies to identify, quantify and experts. Our emissions reporting currently does
manage their physical and transition risks not include offset emissions and carbon removals.8
due to climate change. The tool was launched Our Decarbonization Hub and KPMG International Appendix
at the end of 2021 and scaled and evolved are working to develop further guidance for KPMG
through 2022 and 2023. firms on best practices and principles that will
inform a unified global approach for carbon credits
• A dedicated budget for low-carbon product and BVCM.
R&D within several KPMG firms, allowing us
to publish cutting-edge research related to a KPMG International, as part of our BVCM strategy
wide range of sustainability issues, including and to facilitate the future use of carbon credits
climate-related risks and opportunities. on our net-zero journey, is currently investing in
projects on the ground, such as our alliance with
WWF (see the call out box). A number of KPMG
firms are also considering external alliances to
support BVCM through nature-based solutions.
7
he Corporate Net-Zero Standard — Science Based Targets.
T
8
This does not include reductions from the purchase of RECs (renewable energy certificates)/EACs, which are considered in our emissions reporting.
9
Executing on KPMG’s OIP Commitments.
Emerging areas of focus Introduction
Although we have made progress integrating climate KPMG International developed a circularity KPMG International has
considerations into our business and working strategy and roadmap supporting member firm
towards targets to achieve our net-zero ambition, operations, including supply chains. This involved
implemented a biodiversity plan
Governance
we know that we can and should do more. We a holistic approach that focuses on circular as part of our ambition to become
are committed to continuing our work toward the procurement, avoiding waste, optimizing material a net-zero business. This includes
following goals: use and enhancing end-of-life treatment.
supporting the journey toward Strategyand
Strategy and
1. Transition planning transparency 3. Nature and biodiversity a nature-positive future through scenario analysis
scenario analysis
We understand the importance of a robust and We recognize that our environmental impact and our work with clients and in our
transparent transition plan to deliver on our targets duty goes beyond decarbonization to include a
operations.
and wider commitments. Certain elements of our wider range of interconnected impacts, as climate
Metrics and targets
transition plan are underway, such as the mapping change and nature loss are intrinsically linked.
and tracking of decarbonization levers, defining an Business activities contribute to direct and
Internal Carbon Price, and the tracking of climate indirect drivers of nature loss, creating risk —
metrics toward the achievement of KPMG’s and opportunities — for business and society. Continuing our
net‑zero commitments and goals. Further details We have a role to play in the transition toward a climate journey
on climate metrics can be found in the Metrics and nature‑positive economy.
targets section of the report.
KPMG International has implemented a
Furthermore, we continue to develop and refine biodiversity plan as part of our ambition to Appendix
our approach to transition planning, taking become a net-zero business. This includes
into consideration evolving guidance from the supporting the journey toward a nature-positive
Transition Plan Taskforce (TPT), as well as the future through KPMG firms’ work with clients and
experience of KPMG’s client-facing professionals. in our operations. We will continue to develop our
thinking and align to leading practices through
2. Circular economy initiatives like the Taskforce on Nature-related
Financial Disclosures (TNFD), to help ensure our
A circular economy reduces material use and
approach to business considers the impact and
emissions associated with the production of
dependencies on nature.
materials that traditionally go to waste. In 2022,
Risk management Introduction
We define climate risk as the potential for climate

change to create adverse consequences for human or
ecological systems which undermine financial stability.
This includes impacts on: lives, livelihoods, health and
wellbeing, economic, social and cultural assets and Introduction to the KPMG global Governance
risk management framework

investments, infrastructure, services, ecosystems and
species. Climate risks are categorized as either physical Strategyand
Strategy and
or transition risks. scenario analysis
scenario analysis
We measure, monitor and manage climate risk as

part of our wider ESG risk, which we define as a KPMG International has an Enterprise Risk Management (ERM) program led by the GMT and
failure to understand, prepare for and take action overseen by the Global Board’s Quality, Risk Management and Reputation Committee and, Metrics and targets
to mitigate potential risks across the ESG agenda ultimately, the Global Board. The program uses KPMG’s internal risk-assessment criteria and
that could erode our license to operate or negatively Dynamic Risk Assessment tool to identify, connect and visualize risks across four dimensions:
impact our brand. Specifically, this includes the impact, likelihood, time horizon and connectivity. Furthermore, this process has been informed
failure to build climate risk resilience into our global Continuing our
by KPMG’s climate-scenario analysis using KPMG’s Climate IQ methodology (details can be found
organization, leaving us exposed to natural disasters, climate journey
in the Strategy section).
unable to transition to meet market demands, or
exposed to negative analyst commentary that could KPMG International’s Global Board has delegated responsibility to the GMT for managing the
adversely affect our Trust and Growth ambition. ERM process, reviews of priority risks (of which ESG risk is one) on a quarterly basis, with the Appendix
Global Board reviewing annually. In addition, KPMG firms are required to have an ERM process
that identifies, manages and reports on risks, these risks are reported annually to KPMG
International. KPMG International ERM team aggregates and analyzes the information on the risk
exposures across the KPMG global organization.
Integrating climate into Enterprise
Risk Management
Introduction
We recognize the potential for cross-cutting impacts from climate and ESG across our global organization. Governance
Accordingly, in FY23 we updated the KPMG International ERM framework to formally integrate ESG, including
climate, into our business-as-usual risk management, elevating ESG to a priority risk that is owned by KPMG
International’s GMT and overseen by the Quality, Risk Management and Reputation Committee, which is a Strategyand
Strategy and
committee of KPMG International’s Global Board. scenario analysis
scenario analysis
Key Risk Indicators for ESG include the failure of KPMG to: Metrics and targets
• Meet legal and regulatory ESG compliance requirements;

• Inform and meet evolving ESG reporting standards; Continuing our
climate journey
• Close any real or perceived gap between our own ESG commitments, our actions and the
actions of KPMG firm clients;
• Adapt our business and delivery model to address the impact of climate change;
Appendix
• Deliver and evolve our publicly stated ESG commitments;
• Integrate ESG into our systems, processes and decision-making;
• Assure our internal and external stakeholders that we are serious about ESG.
Additionally, we are continuing to improve the integration of climate into existing enterprise risks. The
output of the scenario analysis for physical and transition risk aligns primarily our Business Resilience
and Business Model, respectively, and will help improve our future operational and financial
resilience.
Risk materiality Level Description Definition
Risk not likely to occur in the three-year

Likelihood
and time frame

1 Remote <10 percent chance of occurrence Introduction
period being considered.
Risk may occur in the three-year period

2 Low 10–30 percent chance of occurrence
being considered.
within ERM 3 Medium

Risk likely to occur within the three-year
period being considered.
31–60 percent chance of occurrence
Governance
Risk more likely than not to occur within Strategyand

Strategy and
Risk rating criteria — impact 4 High >60 percent chance of occurrence
the three-year period being considered. scenario analysis
scenario analysis
Risk materiality is assessed based on consistent criteria Table 6 — Risk rating criteria: Likelihood
for all priority risks, including ESG, based on rating,
likelihood and time horizon. Risk rating criteria — time horizon Metrics and targets
Risks are categorized as minor, moderate, major Risks are classified as short, medium or long-term based on the time horizon of their potential impact, selected
or catastrophic based on internal risk-rating criteria for alignment between risk management, strategy and business-planning processes. At this point in time, these
that defines impacts across seven key areas. These Continuing our
timeframes are appropriate to the nature of our business. While we understand climate risk needs to be assessed over
criteria provide a consistent framework for rating risks climate journey
a longer timeframe than 10 years (as reflected in our scenario analysis), the vast majority of our physical locations and
within the global organization. However, KPMG firms infrastructure are leased, with the transition-risk scenarios currently being considered as a key part of our strategy and
may need to apply judgment based on jurisdictional our trust and growth agenda. Going forward, these time horizons will be assessed and updated when necessary.
requirements and firm-specific considerations.
Appendix
‘Substantive’ or material risks are defined as those with Time horizon Rationale
the potential to impact annual revenue for a KPMG (years)
firm by 6 percent to 20 percent, with strategic risk
defined as risks that could impact a KPMG firm’s ability Alignment with the business planning process, and any risks associated with the
to achieve its stated strategy or maintain its current Short-term 0–1
short-term business objectives under this.
business model.
Alignment with the three-year period for assessing and managing risks under the
Medum-term 2–3
Risk rating criteria — likelihood ERM process.
Risks are also assessed based on likelihood that the Due to the longer-term nature of ESG and specifically climate-related risks,
event will occur. Likelihood is defined based on the KPMG currently considers long-term risks up to a 10-year time period (aligning
Long-term 4–10
following criteria: with our near-term Science-Based Target). This is subject to review as we assess
and manage material ESG risks to our global organization.
Table 7 — Risk rating criteria: time horizon
Risk rating criteria — connectivity
The final element, connectivity, is assessed via Dynamic Risk Assessment, using the first three measures of risk classification to create a risk network that visually depicts
traditional impact and likelihood heatmaps, and incorporates additional theory on risk inter-connectivity to define dependencies and risk clusters. This assessment provides a basis Introduction
for assessing the most-influential risks and interrelated impacts in order to shape mitigation strategies.
Governance
Managing 01 Assign a risk owner to ensure accountability.

Strategyand
Strategy and
scenario analysis
scenario analysis
climate risks 02
Develop, implement, manage and oversee an appropriate risk response, which entails key
processes, activities and controls either in place or planned to manage and/or mitigate the risk
and/or reduce the likelihood and/or severity of impact. Metrics and targets
KPMG International’s ERM process cascades

enterprise risks to KPMG firms and includes Assess the adequacy of risk response and determine if risk actions in place or planned are
requirements for management and reporting to
KPMG Interntaional. Separately, KPMG firms
03 appropriate, or if minor or major improvements are required.
Continuing our
climate journey
independently identify enterprise risks. KPMG
firms typically take the following approach to
Document and provide necessary information to KPMG firm senior leadership, at least
enterprise risks:
04 annually, to facilitate their review.
Appendix
At least annually, KPMG firm senior leadership reviews and reports to KPMG International the
status of identified risks, including the adequacy of our risk response and progress made to reduce
risks to an acceptable level. In addition, senior leadership considers if there are any significant
emerging risks that warrant consideration as an enterprise risk or, conversely, enterprise risks that
have decreased in exposure and are no longer significant enough to be enterprise risks. Regulatory
horizon scanning is also performed at the KPMG firm level to identify applicable requirements
based on jurisdiction, as non-compliance could pose reputational risks to KPMG.
The integration of ESG as a priority risk into the ERM framework ensures that it will be considered
and managed according to the same process as other traditional risks and subject to the same
levels of escalation and oversight.
Metrics and
Introduction
Governance
targets Strategy and

scenario analysis
Metrics and targets
Continuing our
climate journey
Appendix
Our targets and commitments Introduction
KPMG International has endorsed commitments and
targets around emissions reduction, renewable energy Target or commitment Description
use and Internal Carbon Pricing.
50-percent reduction of KPMG’s direct and indirect greenhouse gas (GHG) Governance
1.5°C aligned emissions-reduction target emissions by 2030 against a 2019 baseline.
More information on each of these targets and by 2030 validated by the Science Based
commitments, along with progress tracked against Target Initiative KPMG is assessing the Net-Zero Standard and the 2050 timeline as set
them, is set out below. out by the Science Based Target Initiative.10
Strategy and
scenario analysis
Renewable energy target for electricity
100-percent renewable energy procurement by 2030.
consumption (RE100 members)11
Endorsed by KPMG International and used within the majority of our Metrics and
Metrics andtargets
targets
Internal Carbon Price Reporting KPMG Firms for Scope 1, Scope 2 and Scope 3 business travel
(Category 6) emissions.
Continuing our
climate journey
KPMG’s greenhouse gas footprint Appendix
On an annual basis, KPMG runs the GCR process To further improve the accuracy of this information, At present, the data is used to manage progress
to estimate global emissions for the KPMG global emissions data has been incorporated within our Scope towards our 2030 SBT and long-term decarbonization
organization. For FY23, activity data from firms 3 Category 1 Purchased Goods and Services footprint. ambition and support KPMG International’s annual
representing approximately 94 percent of the KPMG CDP response (on behalf of the KPMG global
global organization’s headcount was collected to For the KPMG global organization, the two organization), and it is published annually within
support this. Additionally, through the CDP Supply most‑significant areas of emissions are Scope 3 our OIP Update to demonstrate transparency is
Chain Program, suppliers representing approximately Category 1 Purchased Goods and Services, and Scope 3 our decarbonization journey. For the KPMG global
70 percent of global procurement spend were engaged Category 6 Business Travel, where we are continuing organization’s latest GHG emissions information,
to understand more about their approach to climate‑risk to improve data and metrics to accelerate progress in please see the KPMG: Our Impact Plan 2024 update.
management and to gather emissions information. these areas.
10
Science Based Targets Initiative enables organizations to set science-based emissions reductions targets.
11
RE100 is a global corporate renewable energy initiative bringing together hundreds of large and ambitious businesses committed to 100 percent renewable electricity.
Supplier KPIs Introduction
KPMG International and 10 Reporting KPMG Firms
currently participate in the CDP Supply Chain Program.
To help improve the approach to supplier management
and ESG, an aligned set of seven internal KPIs have been Governance
developed, helping us to understand where a supplier
is on their decarbonization and climate journey and to
prioritize areas of focus. This is a critical component of the
Strategy and
KPMG global organization’s SBT.
scenario analysis
These KPIs include emissions reporting and assurance, the
setting of SBTs and renewable-energy consumption.
Metrics and
Metrics andtargets
targets
Renewable energy Continuing our

climate journey
As part of the GCR process, data is collected on
renewable-energy use across the KPMG global
organization. Renewable energy is a critical lever to reduce
Appendix
global emissions and, by purchasing increasing amounts
of renewable electricity and supporting RE100, we are
playing our part in scaling renewables while reducing our
operational GHG footprint.
At present, the data is used to manage progress

towards our 2030 renewable energy target and support
KPMG’s annual RE100 response via CDP, and it is
published annually within our OIP Update to demonstrate
transparency is our decarbonization journey. For the KPMG
global organization’s latest renewable-energy information,
please see the KPMG: Our Impact Plan 2024 update.
Other climate-related metrics
KPMG International also tracks several other climate-related metrics which inform the risk-management process. However, a formal target or commitment is not set
for these. The table below sets out these metrics. Introduction
Metric category Description Use case Periodic metrics 2022
Scenario analysis risk quantification Maximum value at risk (MVAR) Governance

Extent of revenue vulnerable to
Transition risks
transition risks Scenario analysis risk and opportunity
Revenue and operating costs
quantification
Strategy and
scenario analysis
Maximum value at risk (MVAR)
Total technical insurance premium (or ‘annual average loss’)

Metrics and
Metrics andtargets
targets
Extent of assets vulnerable to
Physical risks Scenario analysis and risk quantification Number of high-risk properties (and as a percentage of all locations)
physical risks
Average annual failure probability Continuing our

climate journey
Productivity loss
Proportion of revenue aligned with Scenario analysis and opportunity Appendix

Revenue by sector12
climate-related opportunities quantification
Climate-related
opportunities
ESG sales estimates for upcoming
Member firm sales ambition/pipeline (ESG services)
financial period
Investment in ESG services and Total global aligned investment across 10 strategic ESG professional
Capital deployment
solutions services areas
Table 8 — Description of other climate-related metrics used
12
1-8 “period metrics” based on scenario analysis outputs
Continuing our
Introduction
Governance
climate journey Strategy and

scenario analysis
Metrics and targets

Preparing our first Climate Risk Report has provided valuable insights on our progress
in identifying and addressing climate impacts to date. This process has helped us to
understand where progress has been made and where we need to improve — both
within the disclosure itself and in relation to our many stakeholders involved internally. Continuing our
climate journey
We are committed to building on our efforts to fully understand and articulate our
climate-related impacts and to embed them into the heart of our business — applying
lessons learned from this process to prioritize next steps, while continuing to engage
all KPMG stakeholders to support our climate journey. We are confident that our Appendix
commitment to this journey now and in the future will help us achieve our ambitions
and have a lasting, positive impact.
Appendix
Introduction
Governance
Strategy and
scenario analysis
Metrics and targets
Continuing our
climate journey
Appendix
Scenario analysis: approach, assumptions
and limitations
Introduction
Governance
We have used KPMG’s proprietary scenario analysis These risks and opportunities were categorized in Approach — physical risks
tool, KPMG Climate IQ, to understand the resilience alignment with TCFD definitions of transition risks,
of our business to a range of climate scenarios, which and we identified each potential risk and opportunity In order to understand our exposure to the acute Strategy and
is vital to our capitalizing on economic transition within KPMG’s value chain. Using a data-based and chronic physical risks that climate change may scenario analysis
opportunities, mitigating climate-related risks and approach, we reviewed asset-level value chains to cause us, we analyzed the exposure of KPMG
quantifying the impact of key risks and opportunities. understand potential revenue and cost exposure firms’ offices under different climate scenarios,
Climate IQ combines the latest climate science to climate risks, in order to down select those including 1.5°C, 2.5°C and 5°C warming pathways
from the Intergovernmental Panel on Climate which may be most-significant to KPMG’s financial Metrics and targets
(RCP 2.6, RCP 4.5 and RCP 8.5).13 Asset vulnerability
Change (IPCC) with the latest economic analysis projections. This allowed us to better understand key assumptions and historical weather patterns were
and includes input from an expert global team of areas of our potential exposure at particular points in used to assess eight climate hazards defined below:
climate specialists, economists and accountants. The the value chain.
Continuing our
underlying methodology provides a quantified and
climate journey
integrated, physical and transition risk and opportunity By combining the qualitative long-list risk and
assessment. In the section below, we provide further opportunity analysis with the financial value-chain
details on our approach, assumptions and limitations analysis, we identified a shortlist of eight transition
of this scenario analysis. risks and opportunities where analysis could provide Appendix
Appendix
the most insight and value into the significance of
climate-related issues. This list provided indicative
Approach — transition risks and estimates of transition risks and opportunities in
opportunities 1.5°C and 4°C scenarios.
We took a structured approach to defining a shortlist

of the potentially most-significant climate risks and
opportunities, which were carried forward for further
analysis after refinement from an initial long list.
13
Physical risk assessment and definitions related to physical risk provided by XDI: The Cross Dependency Initiative.
Hazard Definition Impact
Coastal Sea water flooding due to high tides, wind, low air pressure and waves can damage coastal
Damage to coastal buildings or infrastructure assets.
inundation land, infrastructure and buildings. Introduction
Soil movement due to changing rainfall patterns and drought causing subsidence damage to
Soil movement Subsidence damage to buildings or infrastructure assets.
structures.
Governance
Pluvial/surface Surface water (pluvial) flooding can damage low-lying buildings or
Increased frequency of extreme rainfall leading to overland flooding.
flooding infrastructure assets.
Riverine Changes in precipitation in a catchment that causes a river to exceed its capacity, inundating Riverine flooding can damage low-lying buildings or infrastructure Strategy and
flooding nearby areas. assets. scenario analysis
High wind conditions may exceed a building’s design specifications

Extreme wind Changes in wind regimes, sea surface temperature and wind speeds.
and cause damage to buildings and infrastructure assets.
Metrics and targets
A destructive fire that spreads via trees and forests. Increased incidence of fire weather due Flames and heat from burning vegetation can damage buildings and
Forest fire
to confluence of higher temperatures, high wind speeds and drier conditions. infrastructure assets.
Saturated building materials freeze, expand and crack facades and Continuing our
Freeze-thaw Changes in annual freeze and thaw cycles as winter periods trend close to freezing point.
structural elements. climate journey
Extreme heat New extremes of high temperatures, more-frequent hot days and longer-lasting heatwaves. Loss of use or failure of infrastructure, as well as human heat stress.
Appendix
Appendix
Assumptions and limitations
Every model can only provide a simplified understanding of an infinitely complex reality. Therefore, it is important for us to clearly set out the assumptions and
limitations of our scenario-analysis modelling and incorporate those into our use case — both internally when we use the results to inform our financial and business Introduction
planning, and externally to readers of our Climate Risk Report. The table below sets out the key assumptions that underpinned our scenario analysis, along with a
description of impacts:
Assumption Description of impact Governance
We have assumed a direct correlation The true relationship between sector outputs and KPMG firms combined revenues is likely to be quite complex. This relationship may vary by sector,
between sector growth/contraction by country and by KPMG service line. For our scenario analysis, we made a simplifying assumption of sector outputs being 100-percent correlated to
and KPMG revenue growth/ KPMG revenues. In future iterations of our scenario analysis, we will analyze historical trends between sector revenues and correlate that with KPMG Strategy and
contraction by sector. revenues per sector in order to refine this assumption. scenario analysis
10-percent discount rate under both The 10-percent discount rate was used to calculate our Net Present Value under both climate scenarios considered. This is our standard base
climate scenarios assumption used for climate scenario analysis. However, the assumption will be refined in future iterations of our scenario analysis.
Metrics and targets
We have assumed a simplifying assumption that within our Energy and Natural Resources sector exposure, only the power and utilities sub-sector is
Exposure to renewables
exposed to the renewables business.
Continuing our
We have assumed that KPMG firms’ exposure to each sector will remain static over time, suggesting KPMG may not adjust its client portfolio in
climate journey
Exposure to sectors response to future market changes. KPMG’s actual exposure to each sector would most likely vary over time. Future iterations of our analysis will
consider different levels of exposure for sectors.
Our physical risk analysis is based on the following ‘simple office’ archetype, which includes: design and construction materials with a wind
Building type: simple office archetype rating for 1-in-500-year return frequency; floor elevation of 0.2 m; moderate-rigidity foundations; and no specialized forest fire protection. These Appendix
Appendix
design and construction settings materially impact the vulnerability of the modelled office to the hazards to which it is likely to be exposed.
MVAR is an indication of damage-related impacts and will not provide a complete picture for non-damaging disruptions (Failure Probability) or the
Maximum value at risk (MVAR)
duration of impacts (Productivity Loss/Loss of Use).
This analysis assumes that the existing portfolio of offices remains static over time, with no changes in the vulnerability of the offices due to
Static portfolio
adaptation or resilience measures.
Properties are indexed as high, moderate or low risk under the RCP 8.5 scenario based on an interpretation of the US government’s FEMA index
Property risk index
used for insurance.
All properties have been assigned the same replacement value (US$1 million) and all hazards are assumed to be fully insured for all properties.
Replacement costs Replacement cost is used to calculate MVAR but it does not account for variations in material or labour costs for regional versus metro areas.
Therefore, actual dollar costs may be higher in metro and coastal areas.
Table 9 — Assumptions
Limitations
Along with setting out the key assumptions of our scenario modelling, we want to be transparent about the model’s limitations. As such, we have set out these limitations:
Introduction
01 02 03 04 05 Governance
This year’s modelling Climate IQ has not It is not possible to Excluded physical The severity of impact
exercise has not assessed the climate- quantify all potential hazards: The analysis above the High Risk
considered the impact related economic transition risks, such only includes hazards Property threshold is Strategy and
of KPMG’s future impacts of one-off as litigation risk or specified — this does not shown and can give scenario analysis
strategic response to events on our financial consumer preference, not include hurricane/ rise to severe business
risks and opportunities performance, such as the that are expected cyclone, landslip, disruption, productivity
during the simulation Russia-Ukraine war and as part of the erosion, lightning or loss and loss of value.
of a climate scenario. the COVID pandemic, or low-carbon transition, any other hazards apart This is not illustrated in
Metrics and targets
quantified impacts as these risks are from those specifically the results.
of isolated issues such driven predominantly identified.
as legal risks, which by behavioural change
are heavily influenced and societal attitudes.
Continuing our
by factors beyond
low-carbon transition. climate journey
Appendix
Appendix
KPMG global presence

For an up-to-date list of KPMG locations can be found here.
Glossary of terms Introduction
Term Definition
CDP CDP, formerly the Carbon Disclosure Project. An international non-profit organization that helps companies and cities disclose their environmental impact. Governance
CO2e Carbon Dioxide Equivalent. A measure for greenhouse gases including but not limited to carbon dioxide, methane and nitrogen dioxide. Strategy and
scenario analysis
The 26th Conference of the Parties. Delayed from 2020 due to the Covid-19 pandemic, this was held in Glasgow in November, 2021 and attended by all
COP26 signatories of the United Nations Framework Convention on Climate Change. COP27 was held the following year in Egypt, and COP28 was held in 2023
in Dubai.
Metrics and targets
Corporate Sustainability Reporting Directive. The EU law that requires certain organizations to disclose information on how they operate and manage
CSRD
social and environmental challenges.
Continuing our
CRI Climate-Related Issue. Inclusive of both climate-related risks and opportunities. climate journey
Acquisitions and
Acquisitions are concerned with buying or merging with another company. Divestments involve the act of selling or disposal of a company. Appendix
Appendix
divestments
Energy Savings Opportunity Scheme. The scheme was established by the UK government in 2014 and requires organizations which fall under its remit to
ESOS
undertake an energy audit every four years, with the aim of identifying areas for reducing energy use and improving efficiency.
Enterprise Risk Management. The internal systems by which an organization identifies and categorizes risks, determines financial materiality for risks, and
ERM
develops risk-mitigation and adaptation procedures.
Environmental, Social and corporate Governance. A broad term outlining the structure by which a corporation works on behalf of social goals, beyond
ESG
the role of a corporation to maximize profits.
Term Definition
Global Climate Response. The process by which KPMG assesses the risks and opportunities of direct operations associated with climate change. Since
its inception, it has provided KPMG firms with a framework to implement energy-saving measures, including specifying green building standards where Introduction
GCR
practicable. To date, this has seen several firms specify LEED-certified buildings when moving or upgrading offices, which has helped achieve the global
organization’s decarbonization efforts to date.
The Glasgow Financial Alliance for Net Zero. A global coalition of leading financial institutions committed to accelerating the decarbonization of the global Governance
GFANZ
economy.
Greenhouse gas. All gasses that contribute to the global greenhouse effect. Generally used to reference anthropogenic (human-caused) carbon dioxide
GHG emissions. Emissions are categorized into three groups: Scope 1 (direct emissions), Scope 2 (indirect emissions — owned) and Scope 3 (indirect Strategy and
emissions — not owned). scenario analysis
Greenhouse Gas Protocol. A partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development
GHG Protocol
(WBCSD), the GHG protocol sets the industry standard for measuring and managing climate-warming emissions.
Metrics and targets
Global Board The Global Board of KPMG International Limited.
Continuing our
Global
climate journey
Management The Global Management Team of KPMG International Limited.
Team
ICP Internal Carbon Price. An ICP is set by organizations and used to operationalize sustainable behaviour by disincentivizing high-carbon activities. Appendix
Appendix
International Energy Agency. Established in 1974, the IEA is a leading global authority on energy. Each year, it produces a ‘World Energy Outlook’ that
IEA
includes forecasts for different sources, technologies and levels of demand.
International Sustainability Standards Board. A standard-setting board that delivers a comprehensive global baseline of sustainability-related disclosure
ISSB
standards, providing investors and other capital-market participants with information about companies’ sustainability-related risks and opportunities.
KPI Key Performance Indicator. A metric by which performance against a target or goal can be measured.
KPMG
KPMG International Limited.
International
Term Definition
SBTi Science-Based Targets initiative. The SBTi defines and promotes best practices in science-based target setting.
Introduction
KPMG: Our Impact Plan. OIP represents the collective approach to managing the environmental, social and governance impacts of KPMG International
OIP
and the independent KPMG firms affiliated with KPMG International.
Governance
Representative Concentration Pathway. RCPs are greenhouse gas emissions (GHG) trajectories adopted by the Intergovernmental Panel on Climate
RCP
Change (IPCC). The pathways describe different climate futures, all of which are considered possible depending on the future volume of GHGs emitted.
RE100 is the global corporate renewable energy initiative bringing together hundreds of large and ambitious businesses committed to 100-percent Strategy and
RE100
renewable electricity.
scenario analysis
Scenario Scenario analysis is used by organizations to test their strategy against various climate futures. Analysis can focus on the physical impacts of climate
analysis change or the transition risks associated with decarbonizing the economy. KPMG has built a proprietary tool for scenario analysis called Climate IQ.
Metrics and targets
Scope 1 Scope 1 emissions are also called ‘direct emissions’ — these occur from sources owned or controlled by the company.
Scope 2 Scope 2 emissions are also called ‘indirect emissions’ and represent the generation of purchased energy. Continuing our
climate journey
Scope 3 Scope 3 emissions are considered a second type of ‘indirect emissions’ and are a result of operations that are not owned or controlled by the company.
Shared Socioeconomic Pathway. SSPs are a set of socio-economic models adopted by the Intergovernmental Panel on Climate Change (IPCC) and used Appendix
Appendix
SSP to complement RCPs. Five were used in IPCC AR6 to show societal futures, ranging from a fast-transition to a low-carbon economy to one with continued
high demand for fossil fuels.
Task Force on Climate-related Financial Disclosures. The non-governmental body responsible for the generation and modification of the climate-related
TCFD
financial disclosure framework.
Task Force on Nature-related Financial Disclosures. Currently in development, the TNFD will provide a TCFD equivalent for nature, structured around
TNFD
nature-related dependencies, impacts, risks and opportunities.
TPT Transition Plan Taskforce. The taskforce launched by the UK’s HM Treasury to develop a gold standard for climate-transition plans.
World Wildlife Fund for Nature is a Swiss-based international, non-governmental organization founded in 1961 that works in the field of wilderness
WWF
preservation and the reduction of human impacts on the global environment.
Contacts
For more information on our ESG journey, please contact: To learn how KPMG can support you on your ESG journey,
please contact:
Jane Lawrie Roisin Murphy
John McCalla-Leacy
Global Head of Corporate Affairs Head of Global Sustainability (Our Impact Plan)
Head of Global ESG
KPMG International KPMG International
KPMG International
E: [email protected] E: [email protected]
E: [email protected]
kpmg.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no
guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination
of the particular situation.
© 2024 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity, and/or to KPMG International Limited. KPMG
International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit kpmg.com/governance.
Throughout this content, “we”, “KPMG”, “us” and “our” refers to the global organization, to KPMG International Limited (“KPMG International”), or to one or more of the member firms of KPMG International Limited, each of which is a
separate legal entity.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.
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Publication name: Climate Risk Report
Publication number: 139310-G
Publication date: March 2024

2024 Climate Risk Report

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Climate

Strategy and scenario analysis 19

Metrics and targets 40

Continuing our climate journey 44

Global Chairman and CEO Governance

Metrics and targets

Making internal changes to

2020 2021 2022 2023

Figure 1 — Our climate journey

We believe environmental, social and governance

Sustainable Markets Initiative

Core elements of TCFD

Figure 2 — Structure of the TCFD

Metrics and targets

KPMG is a global organization of professional services

KPMG firms are generally managed locally and each Appendix

Strategy for ESG Our Impact Plan Strategy and

Figure 4 — Executive roles and responsibilities on climate

C-Suite Responsibilities Reporting line to Board Process for being informed

Table 2 — Detailed description of responsibility for climate-related risks and opportunities

Within KPMG International, reward-based

Metrics and targets

scenario analysis Strategy and

Metrics and targets

What are climate-related risks Physical risk

KPMG assesses climate risks over short, medium-

Risk Category Description Time Likelihood Impact KPMG approach

Table 3 — Key climate-related risks faced by KPMG

Opportunity Opportunity Time Likelihood Impact KPMG approach

Table 4 — Key climate-related opportunities for KPMG

Metrics and targets

In addition to identifying priority sectors that may

% Change (Baseline to 1.5 Degrees)

As locations become undesirable for people and

KPMG locations and offices are managed by the local

Our route to net-zero

Energy Travel Circularity Carbon Continuing our

2030 decarbonization levers

2050 decarbonization levers

Examples of our strategic investment in R&D

We define climate risk as the potential for climate

risk management framework

We measure, monitor and manage climate risk as

• Meet legal and regulatory ESG compliance requirements;

Risk not likely to occur in the three-year

and time frame

Risk may occur in the three-year period

within ERM 3 Medium

Risk more likely than not to occur within Strategyand

Table 7 — Risk rating criteria: time horizon

Managing 01 Assign a risk owner to ensure accountability.

KPMG International’s ERM process cascades

targets Strategy and

Metrics and targets

KPMG’s greenhouse gas footprint Appendix

Renewable energy Continuing our

At present, the data is used to manage progress

Metric category Description Use case Periodic metrics 2022

Scenario analysis risk quantification Maximum value at risk (MVAR) Governance

Total technical insurance premium (or ‘annual average loss’)

Strategy and scenario analysis 19

Metrics and targets 40

Continuing our climate journey 44