Driving a sustainable ecosystem

Welcome to KPMG Insights, a monthly newsletter capturing the top business trends and insights you might have missed this month.

To thrive in a dynamic business landscape, companies need proactive and long-term solutions that ensure environmental well-being, business continuity and resilience. These are underpinned by collaboration, innovation, and a commitment towards environmental, social and governance (ESG) principles. This June, we delve into the ways these principles can be harnessed to forge a sustainable and prosperous future, emphasising environmental stewardship, resilience and sustainable growth.

This issue explores how innovative disruptions have transformed the systems within the insurance, procurement and banking sectors, driving not only greater efficiency, enhanced customer experiences and improved financial performance, but also benefit the planet.

Implementing effective sustainability reporting in insurance

Sustainability reporting has become a strategic imperative for insurance companies, intertwining long-term viability with the health of the ecosystems they operate within. Environmental impacts like supply chain disruptions and increased weather-related claims underscore the need for robust environmental, social and governance (ESG) practices. By integrating ESG factors, insurers bolster transparency, trust and financial performance.

However, navigating this transformation requires selecting appropriate frameworks and metrics, managing complexities such as climate change through rigorous emission reporting and cultivating a skilled workforce adept in robust data management practices.

KPMG equips insurers to cultivate this resilient ecosystem with a suite of tools, including ESG reporting frameworks, advanced data management solutions and automation platforms, streamlining the process. This enables companies to concentrate on their core operations while strategically positioning themselves in a competitive landscape increasingly shaped by sustainability criteria.

By embracing sustainability reporting and fostering a robust ESG ecosystem, the insurance industry not only secures its business continuity but also contributes to a resilient future for all stakeholders.

Explore 'ESG in insurance: A practical guide to sustainability reporting' further to see how KPMG facilitates embedding reporting disclosures across organisations.

Empowering procurement through Gen AI

Generative AI (Gen AI) is poised to revolutionise procurement by enhancing connectivity and resilience across supply chains. By systematising tasks, providing deeper insights, and guiding decision-making, Gen AI empowers procurement to become a strategic partner. This impact extends across the entire procurement lifecycle, including stages like category management and supplier risk and relationship management.

In category management, where resource limitations often hinder in-depth evaluation, Gen AI handles activities such as category strategy formulation and stakeholder engagement. This allows for real-time updates and personalised strategies, enhancing agility and effectiveness in procurement operations.

Furthermore, Gen AI improves supplier risk and relationship management. By analysing vast amounts of data, it predicts potential disruptions and recommends adaptive solutions, facilitating proactive risk mitigation. It also automates tasks for mid-tier suppliers, enabling procurement professionals to focus on nurturing strategic partnerships. This fosters open communication and collaboration – essential for building a robust ecosystem.

Complementing these advancements is the incorporation of green procurement practices, which enhance environmental protection, bolster the company's reputation, and strengthen the resilience of the supply chain.

Delve into the report, ‘Future of procurement’, to discover how Gen AI can unleash new possibilities in sustainable procurement.

Optimising costs strategically for modern banks

In today's banking landscape, strategic cost optimisation, integration of cost management and value enhancement, is paramount for sustained viability. This approach ensures high-quality services at reduced expenses through efficient resource utilisation. It also focuses on enhancing customer experience, boosting productivity and driving profitability. By achieving lasting cost savings and strengthening the value proposition for customers, banks establish a virtuous cycle of resilience and profitability within the financial ecosystem.

Gen AI plays a key driver in this transformative process. It reduces costs, enhances operational efficiency and improves customer service through automation and data-driven insights. While upfront investment is a consideration, AI-powered solutions like chatbots and automated processes significantly lower long-term costs. Implementing robust data security measures also remains crucial to mitigate potential AI risks.

Strategic cost optimisation transforms banks into robust ecosystems primed for growth. By leveraging advanced technologies, cultivating a cost-culture mindset and accurately assessing expenditures, banks achieve enduring efficiencies and heightened value.

Unlock cost savings and drive value transformation with insights from 'Beyond savings: Strategic cost optimisation for the modern bank'.

Advancing progress

By integrating responsible practices across the organisation[LM3]?[J4]?, businesses can unleash new growth opportunities while making a positive impact on the planet. This includes transparent reporting, AI-powered procurement to streamline operations and responsible sourcing that considers environmental and social factors.

At KPMG, we are committed to supporting organisations on their journey towards sustainability and innovation. Whether it is providing guidance on ESG reporting frameworks, implementing Gen AI solutions, or developing tailored cost optimisation strategies, our expertise can help businesses thrive in a more sustainable future.