How can we accelerate progress?
Welcome to KPMG Insights, a monthly newsletter capturing the top business trends and insights you might have missed this month.
As March draws to a close, the powerful conversations sparked by International Women's Day continue to resonate. Investing in women is not just the right thing to do, it is the smart thing ?– it driving progress and strengthening our future.
This issue of KPMG Insights explores how investing in progress takes many forms. We delve into the impact of women leaders, tackling the increasing threat of ESG fraud, and the importance of integrating ESG principles into governance.
Investing in female leaders for a resilient future
Today's "polycrisis" of economic fluctuations, geopolitical tensions and technological disruptions demands exceptional leadership. Female leaders are rising to the occasion, demonstrating remarkable resilience and adaptability in the face of these unprecedented challenges. Their unique perspectives and approaches are making the difference.
Amid workplace challenges specific to women, female executives remain optimistic about corporate growth, social change, gender equality and their career aspirations. Notably, 64 percent report experienced a positive outlook during the polycrisis due to new opportunities. 87 percent identified adaptability as the most critical factor for achieving business resilience. Furthermore, 84 percent expect their companies' earnings to grow over the next three years, with 20 percent projecting a rise of 10 percent or more.
While facing stereotypes and limited opportunities – with 51 percent still encountering male-dominated networks – women decision-makers remain steadfast in their commitment to fostering diverse and equitable work environments. Their emphasis on employee retention strengthens the company’s foundation for sustained success, benefitting both the organisation and society.
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Identifying ESG fraud for genuine progress
With stricter sustainability disclosure rules and more businesses prioritising ESG, the risk of ESG-related fraud also rises. Mitigating this threat is vital for successful corporate sustainability practices.
Misrepresenting sustainability performance to enhance ratings, comply with regulations or attract investors, through acts like greenwashing, erodes trust and exposes companies to significant risks such as financial penalties, reputational damage and loss of investor confidence.
Ensuring ESG integrity requires a multifaceted approach encompassing prevention, detection, response and remediation. Furthermore, nurturing a culture of collective action involving all stakeholders – leaders, employees, investors, and regulators – is crucial for building real sustainable practices.
Integrating ESG in governance
Sustainability has swelled in importance, but integrating it effectively is still in development. Findings from 50 chief sustainability officers and managers from 10 countries suggest that embedding ethical standards into core operations involves empowering all levels of an organisation. This involves granting decision-making power, acknowledging the diverse expertise and commitment of employees and ensuring access to relevant data.
Companies can achieve this by investing in employee communication, education and training regarding ESG initiatives. As the knowledge and maturity of the business function grows, the responsibility for ESG can be gradually decentralised, allowing the group’s sustainability main unit to focus on its central strategic role to drive long-term organisational objectives. By cultivating a sense of ownership and harnessing the collective power of diverse perspectives, companies can establish a strong foundation and accelerate progress towards achieving sustainability.