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KPMG to Launch New Climate Accounting Capability on Blockchain to Analyze Environmental Risks

Audit and professional services firm KPMG is set to offer a blockchain-based Climate Accounting Capability to help firms measure and analyze their greenhouse gas emissions. Per the official announcement, the blockchain-based method also analyzes climate risk impact on asset portfolios as part of organizations’ long-term financial planning.

With the KPMG Climate Accounting Capability, organizations will be able to meet their sustainability goals by being able to analyze climate risks associated with asset valuations while also being able to better assess and employ systems to offset their emissions. The innovation comes highly valuable at a time where organizations are expected to document their sustainability practices and results to demonstrate alignment with environmental, social, and corporate governance (ESG) demands of capital markets investors, as well as compliance with regulatory requirements.

“As investors broaden their focus beyond financial factors to include ESG practices, organizations are increasing efforts to reducing carbon footprints, alongside transparent disclosure of progress. Trusted reporting capabilities, such as those enabled by Climate Accounting Infrastructure, will be critical to meet stakeholder expectations and to comply with emerging regulations,” said Arun Ghosh, KPMG’s U.S. Blockchain leader.

As revealed by the firm, the Climate Accounting Software will not work in isolation, rather, it will merge with an organization’s existing network systems, including IoT sensors, as well as external data sources to establish a verifiable trail of emissions and offsets recorded on the blockchain. The functionalities of the system will be further enhanced as it will use data from trusted environmental data sources with full Artificial Intelligence capabilities. 

“Modernizing ESG practices is becoming a priority for every industry, from energy to technology to healthcare to retail, to support both financial performance and resilience,” said Mike Hayes, KPMG’s Global Renewables leader. “As a result, global organizations are looking to integrate environmental and financial risks associated with the cost of carbon into their real estate portfolio approach, using emerging technologies to validate their data and strategy,” added he.

Climate change amelioration is by far one of the major focuses of world governments and the need to clampdown on forces that are changing our world has cascaded down to organizations as well. With the push for sustainability being the core focus of every stakeholder, doubling as a way to contribute to the solution of climate change, efficient tools must be debuted to achieve this.

Just as the fight against forces driving climate change cannot be fought alone, so also KPMG did not act alone in creating the Climate Accounting Infrastructure. KPMG said it is working with industry groups, large technology players, and climate technology companies including Context Labs, Prescriptive Data, and Allinfra. Context Labs enriches emissions data with environmental context, utilizing its Immutably™ platform to record and certify environmental, operational, and financial information as “Asset Grade” before translating this data into AlphaESG™ signals via machine-learning models.

KPMG to Launch New Climate Accounting Capability on Blockchain to Analyze Environmental Risks

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