On Tuesday, KPMG Australia’s head of oil & gas Jonathon Peacock sent out strong note of support for the government’s gas plans announced that day, despite widespread criticism on environmental and economic grounds. So how is the rest of the company thinking on climate change? And what about the other giants of consulting that make up the so called “big four”?
This week, PwC and Deloitte followed the lead of Ernst & Young by announcing a net zero carbon target.
PwC is a major employer. It has 284,000 auditors, lawyers, management consultants, actuaries and other professional service providers on its books so when it says it aims to decarbonise its operations and supply chain by 2030, that must send a strong signal to the rest of the professional services world.
In its announcement, the company said it will cut the energy use in its offices across 157 countries through energy efficiency and purchase switch to 100 per cent renewable electricity in all territories.
Business travel is another big contributor to any consultancy’s emissions profile but the firm plans to take advantage of the shift to remote working due to Covid to halve travel and accommodation emissions in the next decade. Any remaining emissions will be offset.
While operating emissions are important, the emissions profile of a professional services firm really boils down to a few office buildings. Where these companies can really make a big difference is with their clients.
As part of its new commitments, PwC wants to bring its clients along for the ride and accelerate the transition to a net zero future.
“people can find ways to do the impossible when they have to, and we are taking some of that spirit into our efforts to tackle the global climate crisis”
This will involve “infusing science-led climate analysis into its areas of service”.
Its advisory practice will advise clients about climate risk (whether they like it or not, by the sounds), its assurance teams will work climate-related and other ESG-related factors into mainstream corporate disclosures and governance, and its tax practice will help clients understand how the net zero transformation will impact their tax strategy.
“An important lesson of COVID-19 is that people can find ways to do the impossible when they have to, and we are taking some of that spirit into our efforts to tackle the global climate crisis,” Bob Moritz, global chairman of the PwC network said.
“The changes we need to make will not be easy, but are nothing compared to the harm that runaway climate change would inflict on society.”
This week, Deloitte announced a net zero emissions by 2030 target alongside its FY2020 revenue report. The firm plans to get there by reducing business travel, sourcing 100 percent renewable energy, converting 100 percent of its fleet to hybrid and electric vehicles and engaging with major suppliers to adopt science-based targets.
The company also plans to “invest in market solutions for emissions we cannot eliminate”.
It will also shift its organisational structure to reflect its goals of “operating green” and appoint a designated senior leader to be responsible for climate in each geography.
Like PwC, the company will also adapt and expand its service offering to help clients respond and adapt to the challenge of climate change.
What’s not so clear is whether or not either company will continue to offer services to carbon intensive projects and clients, such as fossil fuel companies.
The Fifth Estate reached out for comment on the company’s strategies for dealing with carbon intensive clients and projects but did not receive a response at the time of publication. It also reached out to EY and KPMG with the same question with no response so far.
In January, EY set the bar high with the first net zero target of the four and 10 years earlier than its closest competitors (the end of 2020).
It also plans to reduce its travel emissions, employ sustainable procurement, purchase renewable energy and then purchase carbon credits for any remaining emissions.
It’s also focused on helping its clients innovate and use technology to reduce their own carbon emissions.
KPMG falling behind
KPMG now remains the only firm without a global net zero target although some local firms – including Australia – have made commitments to net zero operational emissions. KPMG firms in Ireland, Brazil, Spain and the Netherlands have already achieved carbon neutrality.
It does have targets at a global level but they fall short of net zero. It’s currently pursuing an emission reduction target of 10 per cent net per full-time equivalent between 2016 and 2020. The next phase will include a target of buying 60 per cent renewable energy globally by 2020.
The Fifth Estate asked the company if it plans to announce a net zero target anytime soon but did not receive a response at the time of publication.
Jonathon Peacock, its head of oil and gas had plenty to say in his media release on Tuesday.
“KPMG Australia welcomes federal government’s Australian Gas hub announcement,” he said.
“As the energy sector continues to transform, we can expect further positive focus on gas supply and integration across supply chains from this year and into 2021 and beyond.
“Gas has a critical role in firming energy supply and can serve as a vital bridge as government and business develop alternatives to traditional energy forms.
“Specifically, the proposed gas power station and an increase of focus on the Wallumbilla Gas Hub represent a practical long term answer to ensuring stability.
“A key determinant of the value of this step will be the input cost of gas and the ability to provide competitively priced gas for the domestic market.
“We support the government’s view that low gas prices also drive down electricity pricing.
[See analysis in SMH from Bruce Robertson from the Institute of Energy, Economics and Financial Analysis on another view of this.]
“Indeed, through its announcement today, government has emphasised the importance of addressing energy pricing – now and for the future.
“Furthermore, we believe the current heavy reliance on CSG in Queensland and the challenge of supplying the domestic and LNG markets will drive the need to explore other basins to increase supply options.
“This further supports the impetus for the development of new gas fields in South East Australia.”