KPMG Integrated report 2022/2023

The table below provides definitions used for key performance indicators and other metrics relating to our six material topics:

Indicator	Definition	Material topic
Results of internal KPMG N.V. audit inspections	Percentage of audit engagements rated compliant during internal Quality Performance Reviews completed during the reporting period	Ongoing focus on (audit) quality
Results of external inspections	Percentage of external reviews by AFM (new window), NBA (new window) and PCAOB (new window) performed during the reporting period rated satisfactory as percentage of total external reviews carried out
Percentage of engagements involving EQCR	Number of EQCRs being carried out prior to publication of auditor’s report as percentage of statutory audits being conducted during the reporting period
EQCR hours spent as % of total hours spent on EQCR engagements (scope: all EQCR engagements excl. three largest clients)	Number of hours spent on EQCRs by the EQCR partner and designated EQCR assist (senior manager and up) as percentage of total hours spent on audit engagements involving an EQCR during the reporting period – excluding the three largest clients
Partner hours in PIE audit engagements	Percentage of hours spent by KPMG N.V. partners and directors on financial statement audit engagements for PIE clients during the reporting period
Partner hours in non-PIE audit engagements	Percentage of hours spent by KPMG N.V. partners and directors on financial statement audit engagements for non-PIE clients during the reporting period
Average number of hours spent in training per client-facing professional in audit	Average number of hours spent by audit professionals (excl. non-client facing staff) in study or training during the reporting period
Hours spent on PIE audit engagements by IT and other specialists	Percentage of hours spent by specialists working in Assurance departments (other than audit) on financial statement audit engagements for PIE clients during the reporting period
Hours spent on non-PIE audit engagements by IT and other specialists	Percentage of hours spent by specialists working in Assurance departments (other than audit) on financial statement audit engagements for non-PIE clients during the reporting period
Technical resources support (FTEs) as % of total audit FTEs	Percentage of FTE support from Quality & Risk Management, Internal Audit & Compliance Office and Department of Professional Practice provided to audit engagements during the reporting period as % of total audit FTEs
Number of technical consultations as % of total audit engagements	Technical audit or accounting consultations at the Audit Quality Professional Practice Department that are finalized as percentage of total financial statement audit engagements during the reporting period
Financial statements with restatements as % of audit opinions issued	The number of consultations for material errors in financial statements to be corrected during the reporting period as a percentage of the average number of audit opinions issued during the current and prior reporting period
Independence violations, both internal and external, as % of total audit headcount	Number of internally (Internal Audit & Compliance Office) and externally (AFM) reported violations of personal financial independence and employment relationship rules as percentage of average total headcount of audit employees (excl. non-client facing staff) during the reporting period
GPS survey results related to coaching and audit quality	Percentage of positive responses to GPS questions (“strongly agree” and “agree” on a 5-point scale) relating to coaching and quality as % of total response by employees who indicated in the survey that they worked on audit engagements in the reporting period
Employee engagement	Percentage of positive responses ("strongly agree" and "agree" on a 5-point scale) to GPS questions in the reporting period relating to employee engagement (e.g. "I'm proud to work for KPMG" and "I would recommend KPMG as a great place to work")	Well-being of our workforce
Absenteeism rates	Hours lost to sickness, injury or absence within workforce as percentage of total base hours worked during the reporting period	Well-being of our workforce
Workforce diversity by age, gender and career level	Number of employees at 1 October 2023 by age and gender according to career level (partner/director, senior management, management, senior employees, junior employees) as percentage of total workforce (excl. KPMG International and outbound expats)	Inclusion, diversity & equity
Membership of main governance bodies by gender and age	Percentage of individuals within KPMG's main governance bodies (Board of Management, Supervisory Board and Group Leadership Team) as per 1 October 2023 by gender and age
Employee hires by age, gender and business function	Number of new employees hired during the reporting period by age, gender and business function
Number of employees entitled to and taking parental leave	Number of employees that are (based on self-reporting) entitled to additional paid parental leave based on organizational policy or contractual agreements and those taking additional paid parental leave during the reporting period by gender
Gender pay gap	The difference in average salary between men and women employees (excl. KPMG International and CEO) per career level as at 1 October 2023
Investments in developing new audit technologies and tools as % of total audit revenue	The investments made by KPMG N.V. in audit technologies, processes and tools, calculated as the sum of predefined percentages of the Daní, Quality Risk Management Group and Audit Quality Professional Practice department costs, added up with 100% of the costs for the implementation of KPMG Clara. The predefined percentages are a best estimate of costs classifying as investment in audit technologies, processes and tools. This measurement method has applied consistently over the past years.	Digital technologies & AI

Doing good for broader society (cash contributions in EUR)	Cash donations to charities or community organizations (focusing on selected target groups such as environmental, diversity & inclusion, and education & young people) during the reporting period	Impact on society
Doing good for broader society by KPMG employees (hours in EUR)	Hours spent by partners and employees on volunteering for charities or community organizations (focusing on selected target groups such as environmental, diversity & inclusion, and education & young people) during the reporting period multiplied by the average recovery or realized rate (pro bono hours), average labor costs (skilled volunteering hours) and the Netherlands' national minimum wage rate (general volunteering hours)	Impact on society	ESG developments
Gross CO₂ emissions scope 1, 2 and 3	KPMG ‘s gross CO₂ emissions consist of the total metric tons of CO₂ equivalents from material scope 1, 2 and 3 emissions. This includes company owned vehicles (purchased or leased) and stationary energy (e.g. natural gas for heating) consumption at the offices. Gross market-based GHG emissions (scope 2) in metric tons of CO₂ equivalent are calculated using the methodology used to calculate location-based GHG emission and then corrected for renewable energy to calculate our net CO₂ emissions (see definition below). This includes electricity and district heating/cooling if used in the respective office. Gross indirect (scope 3) GHG emissions in metric tons of CO₂ equivalent from the scope 3 sources as described under Scope 3 definition and boundary setting. The general carbon accounting policies and emission factors are described below.Location-based emissions (scope 2) is our total energy consumption, market-based emissions (scope 2) emissions are adjusted based on renewable energy procurement. Our definition of renewable energy is included below.	Impact on environment
Net CO₂ emissions per headcount	The Net CO₂ emissions per headcount are calculated by dividing the net CO₂ emissions by the average headcount for employees (excl. KPMG international and outbound expats) within KPMG NL during the reporting period
Net CO₂ emissions scope 1,2 and 3	KPMG ‘s net CO₂ emissions are calculated based on the gross CO₂ emissions corrected by subtracting the emissions from renewable energy. Our definition of renewable energy is included below.
Percentage of renewable electricity	The percentage of renewable energy is defined by calculating the percentage of renewable electricity as % of total electricity consumption. Renewable energy is defined as energy from natural resources that that are abundant and able to be constantly renewed, including the sun and wind.
Number of participants in ESG Innovation Institutes' Executive ESG program	Number of KPMG partners/directors and executive-level clients attending the executive ESG program at the ESG Innovation Institute during the reporting period	Impact on clients
Employee retention	Percentage of employees (excl. KPMG international, outbound expats and interns) by FTE at the beginning of the reporting period who are still active employees at the end of the reporting period	Skills shortages
Total number and distribution of leavers	The total number of leavers (headcount, excl. KPMG International, outbound expats and interns) during the reporting period including distribution % on gender, age group and business function	Skills shortages

Emission calculation rationale

General accounting policies and emission factors

Our emissions calculations are based on the GHG Protocol 'Corporate Accounting and Reporting Standard (new window)' (World Resources Institute and World Business Council for Sustainable Development, March 2004), as well as the reporting guidelines from KPMG International. The organizational boundaries of KPMG are drawn up using the so-called 'Operational control approach'. This means that KPMG N.V. takes responsibility for the emissions of the business units over which it has operational control, not being KPMG International.
The usage for natural gas (scope 1), purchased electricity market based and location based (scope 2) and water usage (scope 3) is calculated based on the calendar year 2022 due to data availability. All other usage data are calculated for the financial year (1 October 2022 - 1 October 2023).
For the usage data of our lease fleet (leased diesel, petrol and electric vehicles), we don not have all final emissions data points by the time our Integrated Report gets published. When final data is not available, an estimation is calculated. An extrapolation is made based on historical data of the previous year.
As emission factors we used the factors from Defra passenger vehicles (version 2023) for leased vehicles diesel and petrol. For the other sources of emissions we used the Defra factors (version 2021) in line with the reporting guidelines of KPMG International. For leased electric vehicles we used the emission factor for non-renewable energy.

Scope 3 definition and boundary settings

In our scope 3 we currently include Category 5 Waste generated in operations and Category 6 Business travel (including airplanes and public transportation). Any other scope 3 categories are not reported yet as we are still developing our reporting in this area.
For scope 3 Category 6 Business travel, data is collected by an external provider, Schiphol Travel, directly from our travel bookings.

Restatement of prior year figures

In anticipating upcoming CSRD requirements, we have carefully reviewed the definitions and calculation of our key performance indicators in 2022/2023. This resulted in refining and adjusting some of the definitions. In order to present like-for-like figures, we have restated the prior year KPIs concerned. Key changes relate to:

Presenting employee figures that include professionals that are based in the Netherlands (excluding KPMG International and outbound expats)
Determining the gender pay gap excluding the CEO and equity partners
Changing the reference date from 30 September or 31 October to 1 October in order to present employee figures that reflect the situation at the end of the financial year
Adjusting the nominator for absence from actual total hours (including overtime) to the contractual base hours
Adding two internal codes for parental leave calculation that were incorrectly excluded last year
Replacing renewable and non-renewable purchased electricity with market-based and location-based, following GHG guidance

The effects per KPI affected are summarized in the tables below.

Average FTE

	2021/2022	Correction of KPMG International expats/ 1 October	2021/2022 restated
Assurance	1,952	+3	1,955
Advisory	1,303	-1	1,302
Business Services	558	-139	419
Total	3,813	-137	3,676

Retention rate

	2021/2022	Correction of KPMG International expats/ 30 September	2021/2022 restated
Assurance	82.8%	2.2%	85.0%
Advisory	79.0%	0.9%	79.9%
Business Services	86.6%	1.2%	87.8%
Total	82.0%	1.2%	83.2%

Workforce diversity

	2021/2022	Correction of KPMG International expats / 1 October	2021/2022 restated
	% men/women	% men/women	% men/women
Partners/directors	80/20	+1/-1	81/19
Senior managers	69/31	0/0	69/31
Managers	59/41	-2/+2	57/43
Senior staff	60/40	-3/+3	57/43
Junior staff	52/48	+5/-5	57/43
Total workforce	59/41	0/0	59/41

Gender pay gap

	2021/2022	Correction of KPMG International expats / 1 October / employee category change	Correction CEO and equity partners	2021/2022 restated
Salary partners and directors	+5.88% (in favor of women)	2.07%	-9.15%	+1.2% (in favor of men)
Senior managers	+1.69% (in favor of men)	-0.33%	-	+1.36% (in favor of men)
Managers	-0.39% (equal pay)	0.44%	-	0.05% (equal pay)
Senior staff	-0.11% (equal pay)	0%	-	-0.11% (equal pay)
Junior staff	+1.1% (in favor of women)	-0.65%	-	0.45% (equal pay)

Figures in our 2021/2022 Integrated Report were rounded to the nearest full percentage. As of 2022/2023, we use decimals to provide insight into reconciliations and developments.

Parental leave

	2021/2022	Correction of KPMG International/expats	Correction birth leave and parental leave	2021/2022 restated
	Men/women	Men/women	Men/women	Men/women
Employees entitled to parental leave	89/74	-4/-1	+33/+26	118/99
Employees taking parental leave	30/43	-1/-1	+61/+3	90/45

Absence

	2021/2022	Correction of Base Hours	2021/2022 restated
Absentee rate	3.0%	+0.4%	3.4%

CO₂ Emissions

	2021/2022 emissions	Correction in emission calculation following GHG guidance	Correction in emmision calculation regarding rail travel	Emissions after adjusting calculation	Correction for excluding KPMG International	2021/2022 restated emissions
Scope 1
Natural gas used[1]	113			113		113
Leased vehicles - diesel	225			225	-9	216
Leased vehicles - petrol	3,573			3,573	-70	3,503
Total scope 1	3,911			3,911	-79	3,832
Scope 2
Purchased electricity (location based)[1]		+1,362		1,362	-36	1,325
Purchased electricity (market based)[1]		+41		41		41
Leased vehicles - electric***	174	+951		1,125	-19	1,107
Total scope 2	1,536	+992		2,528	-55	2,473
Scope 3
Rail travel**	38		+6	44		44
Air travel	2,524			2,524	-187	2,337
Total waste (includes recycled waste)	1			1		1
Recycled waste	87%			87%		87%
Water used[1]	1			1		1
Total scope 3	2,564		+6	2,570	-187	2,383
Total gross emissions	8,011	+999	+6	9,010	-322	8,688
Net CO₂ emissions	6,690	+999	+6	7,689	-286	7,403
Net CO₂ emissions/Headcount				1.96	-0.01	1.95
Renewable electricity %				97.0%	-0.08%	96.9%

1 Usage for calendar year 2021

Correction in emission calculation following GHG guidance:

Scope 2 Purchased electricity market based and location based restated as a replacement of (non)renewable
Scope 2 Leased vehicles electric: emissions are calculated using the purchased electricity non-renewable factor

Correction in emission calculation regarding rail travel:

Scope 3 Rail travel emissions from international rail travel are included

Correction excluding KPMG International:

Scope 1: For comparison reasons the 2021/2022 figures have been completely restated. For natural gas the emissions remained the same, despite the restatement in usage figures.
Scope 2: For comparison reasons the 2021/2022 figures have been restated except for purchased electricity (market based), because KPMG International staff is only located at our Amstelveen office, which uses green energy.
Scope 3: For comparison reasons the 2021/2022 figures have been restated. Emissions only changed for air travel. In other categories restatements were made in the usage figures but the emissions remained the same. For recycled waste the ratio remains the same.