The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
The sustainability 
imperative
How KPMG can help you 
achieve your ESG goals
2020
kpmg.com/cn

Overcoming your 
sustainability challenges
As climate-related risks become more acute, both investors and 
consumers are increasingly shifting towards more sustainable businesses. 
To stay competitive, organisations now see environmental, social, and 
governance (ESG) not as something nice to have, but as an essential part 
of their business strategy.
Businesses want to understand how ESG can help them identify new 
revenue streams, reduce costs and attract investors, while helping to 
contribute towards a more sustainable future. Companies that can 
successfully tackle these challenges will generate new opportunities, 
while those that fail to act may put their business models at risk.
KPMG China has a dedicated cross-functional team of experts who help 
corporates and public sector clients plan and execute ESG programmes to 
create long-term value.

The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
1
Five ways KPMG helps you achieve 
your sustainability goals
Whether your organisation is just beginning its sustainability journey or expanding its current ESG 
initiatives, we have the knowledge and capabilities to support you. Here are some of the ways we 
can help:
End-to-end strategy development & implementation
01
•
Sustainability roadmap planning and development
•
ESG policy and governance framework development
•
Training and capacity building
•
ESG rating improvement
Sustainable supply chain 
02
•
Responsible sourcing strategy
•
KPMG Origins blockchain solution for supply chain visibility and traceability
•
Supply chain risk management
03
•
Responsible investment strategy
•
ESG policy development to guide responsible investing
•
Green bond/social bond assurance
Sustainable finance
04
•
Identifying emission reduction opportunities
•
Climate risk and opportunity strategy development
•
Climate-associated risk management/business model evaluation
De-carbonisation
CO2
05
•
Fulfil disclosure requirements
•
Reporting readiness check
•
Assess and communicate value and impact
Reporting and disclosure

The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
End-to-end strategy development & implementation
01
Integrating sustainability into the core of your business
A sound sustainability strategy can unleash new revenue opportunities whilst achieving operating efficiencies. 
It can also help protect your business from future risks and disruptions.
Your ambition, your strategy
Businesses need ESG strategies that are tailored to their ambitions. Two varying approaches to developing 
this strategy include:
• Setting the ‘gold standard’: To generate overall added value to the ecosystem where you operate, this 
strategy goes beyond mitigating impacts but holistically considers societal needs and how to meet such 
needs.
• Levelling the playing field: This strategy focuses on getting ESG practices up to speed with industry 
peers to retain competitive edge
How KPMG can help
Translate your sustainability ambitions into an actionable roadmap
Improve your ESG ratings (MSCI, CDP, DJSI, Sustainalytics, etc.)
Identify the sustainability issues most important to you
Incorporate best practices from industry peers
Develop ESG policies and governance structures
Communicate your vision and performance
Design targets and KPIs to measure progress
Provide training and capacity building to address skill gaps and ensure alignment across your organisation
Case study: Strategy Development
Sustainability roadmap 
helps F&B 
manufacturer to 
identify improvement 
opportunities
With aspirations to improve their sustainability 
performance on external rating indices, a global F&B
manufacturer engaged KPMG to transform their 
sustainability strategy into a year-by-year roadmap.
KPMG reviewed their existing initiatives and 
performance against The Carbon Disclosure Project 
and Dow Jones Sustainability Index to define 
opportunities for improvement. Together with their 
function leaders, KPMG translated these 
opportunities into actions across different parts of 
their business. 
Case study: Strategy Development
KPMG was commissioned to help an
arts and culture group analyse its current ESG 
performance to determine future opportunities for 
improvement and achieve its sustainability targets.
In the roadmap, progress on targets is tracked by 
measuring outcomes rather than outputs to better 
understand the true value generated. The client was 
also equipped with an established reporting 
framework in accordance with the Global Reporting 
Initiative to support their communications with 
stakeholders. 
Enabling an arts & 
culture group to 
implement its 
sustainability vision
2

The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
Case study: Strategy Implementation 
Sustainability metrics help telecommunications company to 
stay aligned across departments and functions
To deliver meaningful results, embedding sustainability across different aspects of an 
organisation’s business strategy is integral. That’s why KPMG was tasked by a major 
telecommunications company to define their top sustainability risks and opportunities, 
determine metrics to drive sustainability performance and factor potential risks into 
their business planning.
KPMG adopted a Five-part Materiality Assessment to prioritise the top three 
sustainability topics with the highest risks and opportunities. Ultimately, these topics 
became the client’s strategic business focus. Separately, the potential risks related to 
the top issues were incorporated into their enterprise risk register.
Identifying and developing group-level ambitions for sustainability performance cannot 
be achieved without employee contributions across different functions. KPMG 
advised the client of the need to define key performance indicators (KPIs) for the 
group and to translate group-level KPIs so that they are meaningful and relevant to 
their employees’ day-to-day operations. In the course of the engagement, department 
heads developed individual KPIs that could allow each department to maximise its 
contribution to the group’s sustainability.
3

The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
Supply chain sustainability protects brand reputation and improves operational 
efficiency
Businesses are accountable for how their suppliers and supply chain operations affect communities and the 
environment. The range of issues this entails is daunting: from ensuring safe working conditions to paying fair 
wages; ending child labour; improving product traceability; using water responsibly; and discouraging corruption.
Building a sustainable supply chain that is free of these issues is not easy. Supply chains are widespread across 
the globe, making it difficult for companies to know where products come from and the conditions in which they 
are being generated.
Proactive management of suppliers and supply chain activities is crucial to protect your business and to 
safeguard brand reputation.
How KPMG can help
Develop a responsible sourcing strategy
Identify and advise on supply chain risks
Gain full transparency and traceability of your supply chain, using data analytics and blockchain solutions, 
including KPMG Origins. 
Case study:  Sustainable supply chain
Creating a traceable and visible value chain for a wine producer
Concerned about imitation products and grey vendors compromising its consumer 
markets, a wine producer wanted visibility of their products once they left its factories 
and reached distributors and consumer markets in mainland China. If left unmanaged, 
there would be severe risks to brand reputation and customer experience.
KPMG Origins was adopted to offer a traceable, visible and global solution to these 
challenges with its application of blockchain technology. It provided an infrastructure 
of trust for trading partners to share reliable product information and export checklists 
or Internet of Things (IoT) data. KPMG put in place an authentication system with the 
support of partners along the value chain, allowing retail outlets, sellers and 
customers to verify authenticity by scanning a tamper-proof QR code.
The client and its value chain partners are now able to track real-time location, 
transport and warehousing conditions for all products with the ease of a mobile 
application. The approach has helped them to ensure product authenticity and product 
quality in the markets they operate in.
02 Sustainable supply chain 
4

The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
Case study:  Sustainable finance
Paving the path for asset managers to invest responsibly
Major asset owners are demanding asset managers to embed ESG into investment 
decisions. A Hong Kong-based asset manager aspired to leverage this as an 
opportunity to gain a competitive advantage to attract major European and North 
American asset owners. 
KPMG was commissioned to develop a responsible investment strategy to guide the 
client’s journey towards ESG integration. Together with management, KPMG worked 
to define the client’s ESG ambitions and converted them into policies and business 
processes to achieve results. Procedures and controls across asset classes and 
investment products were put in place to provide clarity to portfolio managers. 
Sustainable finance
Until recently, sustainable finance was viewed as a nice-to-have for asset managers and investors. Now, 
regulators and customers are demanding greater ESG responsibilities and impacts from the financial sector. 
Global fund managers have adopted this and are leading the industry to behave more responsibly.
By integrating ESG into investment processes and launching ESG products across asset classes, the financial 
sector can create a better future for all while also improving financial performance.
In addition, through embedding ESG, financial institutions can unleash new opportunities and attract new 
customer segments.
How KPMG can help
Support in defining responsible investing ambitions and develop a responsible investing strategy
Develop ESG policies to guide responsible investing decisions
Support with green and social bond assurance to maximise credibility.
Assist on meeting ESG-related compliance requirements
03
De-carbonisation
04
Climate change is a complex global challenge with the potential to disrupt business operations across multiple 
entry points. Further, it may disrupt the availability of products along supply chains or even change customer 
preferences, forcing businesses to innovate to meet customer demands. At the same time, businesses are 
expected to behave responsibly through reducing their greenhouse gas emissions.
Businesses need to understand climate change in two ways: first, how does your business contribute to global 
warming and how can this contribution be minimised? Second, what are the risks created by climate change and 
how do they impact your business’s ability to generate financial returns?
How KPMG can help
Identify value chain emission reduction opportunities
Develop a climate strategy to manage climate risks and opportunities
Assess risks to business models in reference to the Task Force on Climate-related Financial Disclosures 
framework.
CO2
5

The sustainability imperative
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss 
entity. All rights reserved. Printed in Hong Kong, China.
Disclosure of sustainability performance is increasingly important to stakeholders
Investors see sustainability performance as an indicator to inform their investment decisions. At the same time, 
customers favour companies who help them make informed purchasing decisions that minimise harm to the 
environment. Your ESG disclosures help stakeholders make decisions that support your business.
Regulators are also honing down onto businesses to disclose how sustainability is being managed. In 2020, the 
Hong Kong Stock Exchange released new and more stringent disclosure requirements. Soon after, the Hong 
Kong Monetary Authority issued a self-assessment to understand banks’ management approach to climate-
related risks.1
Transparency is the new norm and businesses are expected to adopt mandatory and voluntary disclosure 
requirements.
How KPMG can help
Fulfil regulatory disclosure requirements under The Stock Exchange of Hong Kong.
Support on the Hong Kong Monetary Authority’s Common Assessment Framework on Green and 
Sustainable Banking self-assessment.
Report against indices and standards reporting including GRI, SASB, DJSI, CDP, UNPRI and UNGC.2
Assess reporting readiness against the above standards.
Report your contribution towards the UN Sustainable Development Goals.
Assess and communicate socio-economic impacts and benefits through KPMG True Value.
Case study: Reporting & Disclosure 
1
Hong Kong Monetary Authority, “Common Assessment Framework on Green and Sustainable Banking,” December 2019, 
https://www.hkma.gov.hk/media/eng/regulatory-resources/consultations/Common-assessment-framework_31Dec2019.pdf.
2
Above abbreviations: Global Reporting Initiatives (GRI), Sustainability Accounting Standards Board (SASB), Dow Jones Sustainability Index 
(DJSI), UN Principles for Responsible Investment (UNPRI), UN Global Compact (UNGC).
Assessment helps smart logistics provider unlock social impact
A logistics provider was looking to build the city’s first ever smart logistics 
warehouse. To gain government support, the client needed to demonstrate the 
socioeconomic value its development would have on the society.
To present an unbiased view, KPMG assessed the positive and negative impacts of 
the development throughout both the construction and operational phases. 
Sustainable development indicators were diligently selected from regional and local 
development plans by government to assess whether the impacts and contributions 
of the smart warehouse aligned with the governments’ requirements for positive 
social impact.
KPMG’s findings created a business case to the government by demonstrating 
alignment with the government’s development objectives. In addition, KPMG’s 
assessment revealed additional long-term indirect benefits to society as a result of 
the warehouse’s ability to enable upstream and downstream players in the logistics 
value chain to become tech-savvy.
Reporting and disclosure
05
6

Catherine Chung
Associate Director, Business Reporting and 
Sustainability 
KPMG China
T: +852 2685 7677
E: catherine.chung@kpmg.com
Pat Woo
Partner, Head of Sustainable Finance, 
Hong Kong
KPMG China
T: +852 3927 5674
E: pat.woo@kpmg.com
Patrick Chu
Partner, Head of Business Reporting 
and Sustainability
KPMG China
T: +86 10 8508 5705
E: patrick.chu@kpmg.com
Contact us
Jocelyn Ho
Manager, Sustainability Advisory
KPMG China
T: +852 2913 2534
E: jocelyn.ho@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 endeavour 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 upon such information  without appropriate professional advice 
after a thorough examination of the particular situation.
© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG 
International Cooperative (“KPMG International”), a Swiss  entity. All rights reserved. Printed in Hong Kong, China.
The KPMG name and logo are registered trademarks or trademarks of KPMG International. 
Publication number: HK-ESG20-0002
Publication date: July 2020
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