KPMG Integrated report 2022/2023

Every year, we carry out an assessment of our business environment to identify our material topics – i.e., those areas where we believe we can create most value for stakeholders and society. These topics provide the basis for our reporting, key performance indicators (new window) and engagement with stakeholders (new window).

This year we carried out an internal review to decide our material topics, using our 2021/2022 results as a starting point. This review decided on six material topics for 2022/2023, approved by KPMG N.V.’s Board of Management. For more details of our assessment, including definitions used, methodology, and a comparison with results from our 2021/2022 analysis, please see our Note on Materiality Assessment (new window).

Managing our material topics

The table below provides details of our six material topics for 2022/2023, and explains our approach to managing the principal risks and opportunities associated with each of these topics:

Material topic	Associated impact, opportunities and risks	Management approach
Ongoing focus on (audit) quality	Impact: providing high-quality assurance and advisory services to clients and society Opportunities: lower regulatory risk; better- positioned to win new business Risks: loss of public trust; damage to reputation among clients; possible fines from regulators and/or additional claims from clients	•	Extensive quality management system, backed up by regular inspections and internal quality reviews
		•	Active participation of partners in Assurance and Advisory engagements
		•	Extensive training, monitoring and compliance programs. These include measures to address shortcomings following the investigation into answer sharing (new window)
Well-being of our workforce	Impact: creating a positive and inspiring working environment where our people can develop their careers to enable them to deliver value to clients and society Opportunities: higher employee engagement; increased retention rates; greater productivity; better reputation as employer Risks: time lost through absenteeism; increased workload for existing employees; reduced productivity	•	Health and well-being programs, including psychological safety built into processes and systems
Well-being of our workforce		•	Increased talent attraction, specifically in Assurance
Digital technologies and AI	Impact: increasing the digital savviness of our people; helping clients with their digital transformation Opportunities: greater efficiency; accelerate internal processes; lower operating costs; greater insights for clients; new digital products and services for clients Risks: possible project delays; increased investment costs; cybersecurity exposure	•	Continued investment in target operating models for Assurance, Advisory and Business Services
		•	Expansion of Connected (new window), Powered (new window), Trusted (new window) offering to clients
		•	Increase in strategic investments in digital technologies (including roll-out of KPMG Clara (new window))
ESG developments	Impact: sharing knowledge on ESG topics; supporting clients and our own organization in the ESG-transition Opportunities: contribution to mitigation of climate risk by helping clients in becoming more sustainable, make significant impact as responsible corporate citizen, new ESG-related services and growing demand from clients in supporting them in their ESG-transitions Risks: inability to attract candidates with deep ESG expertise; increased competition from other professional services firms, reduced reputation and possible loss of business	•	Increased investment in learning & development for professionals and C-level leaders in the Netherlands in ESG knowledge
divided into three sub-topics: 1) ESG – Impact on clients 2) ESG – Impact on environment 3) ESG – Impact on society		•	Increase in ESG work with clients, both Assurance and Advisory
		•	Extension of ESG talent attraction and training
		•	Continued engagement with regulators and other ESG standard setters
Inclusion, diversity & equity	Impact: creating a safe, diverse and inclusive working environment where our people can be themselves Opportunities: build fairer, more inclusive workforce; better decision-making; widen potential talent pool; strengthen public trust Risks: failure to meet stated targets at all career levels; loss of reputation as employer; failure to retain diverse talent in workforce	•	Increased investment in learning & development for professionals and C-level leaders in the Netherlands in ESG knowledge
		•	Eliminate bias in HR processes (including talent attraction, performance reviews, promotions and succession)
		•	Continue work to close gender pay gap
Skills shortages	Impact: building a high-quality learning organization; enabling our people to develop new skills to add value for clients and society Opportunities: skill up existing workforce; develop new skills in areas such as data, digital and AI; increase diversity of talent attraction and employee base Risks: 'capacity crunch' and increased workload for existing employees; loss of business; inability to execute strategy or growth plans	•	Inclusion, diversity & equity seen as a business priority
		•	Investment in skills development and learning for existing staff
		•	Increased hiring of experienced Assurance staff to reduce workload
		•	Adoption of more flexible talent attraction and ways of working
		•	More diverse approach to talent attraction to broaden available talent pool

How we create value

Through our business activities, we create value for society. Our assurance work helps build trust in financial markets and supports economic growth. Through advisory, we help improve our clients’ management of important ESG issues, strategy challenges and digital transformations – all while guiding them in a fast-changing business environment.

The diagram below shows our value creation model, which consists of four main sections:

The inputs and resources we use to operate our business, ranging from the skills and knowledge of our people to our quality management system
Our main functions – Assurance, Advisory and our Business Services unit
Outputs from our business activities, and how these benefit our clients, our people and other stakeholders
Lastly, outcomes, which show the value we create for society as a whole, as well as the contribution KPMG N.V. makes to the UN Sustainable Development Goals (new window) (SDGs)