2.4  EU Taxonomy assessment

We have assessed our business operations in relation to the EU Taxonomy and the economic activities outlined in the Delegated Acts to Regulation 2020/852 of June 18, 2020 (known as the "EU Taxonomy Regulation").

As the core business of KPMG N.V. is currently not defined in the EU Taxonomy, we only have a limited number of eligible activities, none of which is aligned.

This chapter explains in detail the assessment we performed and our view of the next steps.

2.4.1  Introduction

The EU Taxonomy is a classification system that sets requirements for companies to disclose the sustainability of their economic activities, expressed through three KPIs: turnover, capital expenditure (CapEx), and operating expenditure (OpEx).

The regulation requires KPMG N.V. to assess our economic activities and the extent to which they contribute to one or more of the six environmental objectives (EOs) included in the EU Taxonomy: climate change mitigation (CCM), climate change adaptation (CCA), sustainable use and protection of water and marine resources (WTR), transition to a circular economy (CE), pollution prevention and control (PPC), and protection and restoration of biodiversity and ecosystems (BIO).

An economic activity that is described in any of the Delegated Acts is potentially sustainable and reported as taxonomy eligible (category A in the KPI tables). Activities that meet the substantial contribution criteria, as well as the do-no-significant-harm criteria and minimum safeguards, are considered sustainable and reported as taxonomy aligned (category A1 in the KPI tables). Economic activities that are not (yet) described are reported as non-eligible (category B in the KPI tables).

2.4.2  Eligible activities

We screened KPMG N.V.’s internal (financial) reporting, the activity descriptions in the (annexes) to the Delegated Acts, and our peers’ EU Taxonomy disclosures to identify eligible activities. We also confirmed the identified turnover-generating activities through interviews with engagement leaders.

For 2023/2024, the following eligible economic activities were identified:

Table 6

KPMG N.V. is also involved in education as meant by activity CCA 11.1, but this does not result in the recognition of turnover, CapEx, and/or OpEx in accordance with the EU Taxonomy definition. Training for clients on (upcoming) ESG regulation is often not a separate performance obligation but part of a broader project.

2.4.3  Alignment assessment

For eligible activities, KPMG N.V. has assessed the relevant technical screening criteria. Activities that are not material and where we were not able to ascertain compliance with the technical screening criteria due to lack of data or evidence are reported as eligible without any further assessment for alignment.

Activity CCM 6.5 Transport by motorbikes, passenger cars and light commercial vehicles

Employees of KPMG N.V. can lease a passenger car. Due to the number of vehicles and range of manufacturers in our fleet, we have engaged with our lessors to obtain relevant data for the alignment assessment, especially in relation to re-use and recyclability criteria, as well as the rolling noise requirements. As we have not been able to obtain all necessary data to conclude on alignment, all additions in 2023/2024 are reported as eligible but not aligned.

Activity CCM 7.7 Acquisition and ownership of buildings

KPMG N.V. leases a limited number of buildings in the Netherlands. In 2023/2024, there was an addition of EUR 79,000 for the lease of an additional floor in one of these office buildings. This building dates from 2000 and has an energy performance certificate class A. We have not done our own climate risk and vulnerability assessment and have not assessed the physical climate risks to this building. This addition is therefore reported as eligible but not aligned.

Activity CE 1.2 Manufacture of electrical and electronic equipment

KPMG N.V. purchases computer equipment (primarily laptops), the manufacturing of which is a Taxonomy-eligible activity. The assessment of alignment of activities in the Environmental Delegated Act is not yet a requirement for the reporting period and is therefore reported as eligible but not aligned.

Minimum safeguards

Compliance with minimum safeguards is a requirement for alignment, to ensure that economic activities beneficial to the environment do not have an adverse social and governance impact. KPMG N.V. is still in the process of assessing full compliance with the minimum safeguards. For more information on the topics of anti-corruption and anti-bribery, human rights policy commitments, board diversity, and equal pay, see the relevant sections of this sustainability statement.

2.4.4  Key performance indicators

Table 7

The financial information for calculating these metrics is gathered from KPMG N.V.’s accounting system and excludes any intercompany transactions. Where relevant, to avoid double counting in the KPIs, the amounts related to economic activities that contribute to multiple environmental objectives have been allocated to the most relevant EO (as indicated in bold in the KPI tables).

Contextual information

KPMG N.V. reports its EU Taxonomy KPIs for the first time over 2023/2024. While we did not calculate comparatives for 2022/2023, the nature of activities in the prior year was similar.

Turnover from eligible activities is limited, as, for example, sustainability advisory expertise used for assurance services is currently not considered eligible. Future changes to the EU Taxonomy might result in the inclusion of low environmental impact activities, including, for example, professional services provided by auditors.

CapEx, which includes an amount of zero related to acquisitions through business combinations, can be broken down as follows. KPMG N.V. does not have a CapEx plan according to the definition in the Disclosures Delegated Act.

Table 8

OpEx, in accordance with the EU Taxonomy definition, is calculated and considered not material for our business model. The denominator for 2023/2024 amounts to EUR 10.6m, being 1.6% of KPMG N.V.’s total OpEx, and is mainly related to research and development. As the reporting exemption is used, the OpEx numerator in the KPI tables is reported as nil.

We have not issued environmentally sustainable bonds or debt securities with the purpose of financing Taxonomy-aligned activities.

2.4.5  Nuclear-energy- and fossil-gas-related activities

Table 9

2.4.6  KPI tables

The EU Taxonomy datapoint disclosures are as follows.

2.4.7  KPI: Turnover

Table 10

2.4.8  KPI: CapEx

Table 11

2.4.9  KPI: OpEx

Table 12

2.4.10  Evolution of alignment

KPMG N.V. has not yet set any (strategic) targets on EU Taxonomy alignment and we do not have a Taxonomy CapEx plan in place to align economic activities in the future, as the assets are mainly leased and not owned by KPMG N.V. The alignment percentage is therefore not expected to change significantly versus 2023/2024 in the short and medium term. We will, however, continue to engage with our lessors and evaluate the relevance of obtaining the data required to assess alignment. The technical screening criteria will also be taken into account in future investments in buildings.