Sustainability on the agenda at
KPMG Australia

Sustainability-related information is firmly on the agenda for
many Australian organisations and this is this creating more work
for accountancy firms, according to KPMG Australia.

A report from the Big Four firm, entitled ‘Sustainability
Reporting in Australia’, found the trend is being driven by a range
of forces including the greater focus of analysts and institutional
investors on long-term performance, the increasing financial
materiality of greenhouse gas emissions, and a global movement
towards more overt corporate responsibility and associated
competitive positioning.

KPMG Australia sustainability services partner Margaret Smyle told
IAB the firm’s sustainability advisory service, carbon
advisory service and energy and natural resources teams are
catering for a number of streams of work arising from the trend.
“However, sustainability is increasingly considered as a material
business risk and therefore it is generating work in all our
services [such as] advisory, tax and audit,” Smyle said.

Advisory projects on the development of sustainability strategies
that will ultimately drive the disclosure process are one of the
streams of work KPMG is involved with.

Projects on the preparedness of organisations to report are another
line of work. “This focuses on the data collection and reporting
processes, and controls and provides organisations with
recommendations on the robustness of the data they wish to
disclose,” Smyle said.

The firm also provides assurance services on the performance
indicators reported in sustainability reports and annual reports,
or to regulatory bodies and advisory projects on stakeholder
engagement processes used by organisations to identify what their
stakeholders view as key issues for the organisations.

Smyle said the rise of disclosure of particular indicators such as
carbon emissions is also leading to the increased interest in
financial accounting and tax issues related to carbon abatements
and the trading of credits in the voluntary carbon market and the
emission trading schemes around the world.

KPMG said it identified sustainability-related information as a
growth area many years ago and has been providing services in this
space since the mid-1980s globally and during the past ten years in
Australia. The teams specialising in these areas are growing
rapidly and the firm is preparing for more growth in the future.
“Recruiting people with the right skills in this space can be a
challenge, especially in the context of the existing labour market,
and therefore we are recruiting on an ongoing basis,” Smyle said.
“We are reviewing our services regularly to ensure that they meet
the future needs of organisations.”

The KPMG report found that Australia is not a world leader when it
comes to examining the number of companies that currently report on
sustainability. “However, it is important to note that there are no
regulatory drivers/obligations in Australia, unlike Japan for
example,” Smyle said. “It is also important to note that the
voluntary nature of reporting in Australia has allowed innovation
in reporting and that the quality of the reports produced by some
Australian companies are of a very high standard and fair well when
compared to international examples.”

Carolyn Canham