About the report

Assurance Statement

BSD Consulting performed an independent assurance process for KPMG Brazil´s Sustainability Report 2014, which was developed according to the Global Reporting Initiative (GRI) G4 guidelines, following the in accordance option “Core”. The fourth year of the assurance process continues to provide KPMG’s stakeholders with an independent opinion about: the quality of the report, the stakeholder engagement process, the adherence to the three principles of AA1000 Assurance Standard (2008) and the management processes for sustainability aspects.

Independence

We work independently and ensure that none of the BSD staff members maintains business ties with KPMG. BSD Consulting is licensed by AccountAbility as an assurance provider (AA1000 Licensed Assurance Provider), registered under No. 000-33.

Our Qualification

BSD is a consulting firm specialized in sustainability. The verification process was conducted by a qualified team of professionals with long-standing experience in independent assurance.

Responsibilities: KPMG Brazil and BSD Consulting

KPMG has prepared the Sustainability Report and is responsible for all its content. Our work did not include the verification of historical financial data. The report was evaluated against the AA1000AS principles and the GRI G4 adherence checked against the “Core” in accordance option.

Scope and limits

The scope of our works covers all information included in the KPMG 2014 Sustainability Report, full version, referring to the period from October 1st, 2013, through September 30th, 2014 (presented as 2014), and the total Emissions (CO2e tons/year) and DVA (value added statement) data refer to the period from January 1st, 2014, through December 31st, 2014.

The assurance process was conducted according to the AA1000AS (2008) (AA1000 Assurance Standard 2008), type 1, moderate level of assurance. The Assurance Statement aims to inform stakeholders about BSD’s conclusions about the assessment of adherence to the three principles of AA1000AS: inclusivity, materiality and responsiveness. The verification of financial data was not object of BSD Consulting´s work.

Methodology

The approach and procedures developed during the AA1000AS verification process include:

  • Sustainability Report 2014 content review;
  • Understanding the process of generating information for the Sustainability Report;
  • Research of public information about the company and industry (media, websites and legal bases);
  • Interviews with managers from key areas regarding the relevance of information for reporting and sustainability management;
  • Interviews with the company’s partners;
  • When relevant, confronting the sustainability performance information with the company’s effective management;
  • Assessment of evidences for the selected indicators;
  • Assessment of evidences for external stakeholder consultations ;
  • Based on sample testing, confirmation of the Sustainability Report information with supporting documentation, management reports, internal controls and official correspondences.

Main Conclusions on Adherence to AA1000AS 2008 Principles

1. Inclusivity – addresses the stakeholders’ participation in the process of developing and implementing a transparent and strategic sustainability management process.
  • Consultation with external stakeholders of KPMG was carried out indirectly, and tools and communication channels existing within the firm were used. Direct consultation was not carried out in 2014 for the materiality process, although a commitment was presented in the report to a further consultation of external stakeholders for the reporting process in 2015.
  • The Corporate Citizenship area conducted an internal consultation activity, via a kick-off workshop for the reporting process in 2014, which included the participation of the areas responsible for collecting data for the GRI indicators.
  • KPMG International is spreading and reaffirming throughout the world in its member firms the KPMG Purpose (Inspire Confidence Empowering Change). Thus, KPMG International carried out this process through interviews with stakeholders, studies on the brand, training materials, customer satisfaction surveys and through rescuing the company and its founders’ history. The inputs of this process were considered part of the review of the materiality process in the 2014 reporting cycle (in Brazil).
  • The Sustainability Report review process by the Executive Committee was maintained. Nevertheless, knowledge about the report and the concept of sustainability at KPMG can still be intensified at all hierarchical levels, including both the technical staff as administrative.
  • In 2014, an e-learning on sustainability topics was offered to the company’s employees. It was developed in a partnership between the NGO Akatú and the KPMG Corporate Citizenship area. The e-learning was disseminated through an internal campaign for KPMG employees in Brazil. There are improvement opportunities in disseminating sustainability topics through the development of a strategic training related sustainability issues and their impacts for business.
2. Materiality (or Relevance) – issues required by stakeholders to make decisions on the organization’s economic, social and environmental performance.
  • A materiality review was conducted in 2014. Opinions of stakeholders were analyzed through analysis of documents, inputs gathered by the company’s existing communication channels, sectorial sustainability information and a benchmarking research. As a result, the four material macro-themes were maintained and a breakdown into specific material issues was made in order to bring greater clarity to the scope of these macro-themes. The specific material issues were subsequently crossed with the GRI G4 aspects.
  • The material macro-themes are the same as in previous cycles and they are aligned with KPMG strategy. The issues: "Conducting business in an ethical manner", "Accountable and transparent governance systems" and "Services with quality and complete independence" maintained its specific and consolidated processes in order to ensure compliance with policies, codes and trainings aligned with KPMG International guidelines and regulatory bodies.
  • There was an improvement in KPMG’s sustainability report taking into account the market trends in reporting with a more strategic focus towards sustainability. The company’s material issues were presented in connection with the six capitals of the Integrated Reporting framework (IIRC - International Integrated Reporting Council). There is opportunity of improvement through deepening the implementation of the framework and going beyond the relationship of the capitals with the material aspects of GRI G4. It is important to ensure clear connection of material themes and sub-themes with their related positive and negative impacts.
  • There was an initial process of assessing the company’s impacts related to the material macro-themes. Such impacts were briefly presented throughout the report. The assessment of the limits of the impacts (inside and/or outside of the organization) can be further developed to include all the identified material aspects, including its positive and negative impacts. KPMG is committed to further analyze these impacts in subsequent reporting cycles in order to meet in full the new requirements of the GRI G4 guidelines (G4-20, G4-21 and item "a" of the Disclosure of Management Approach).
3. Responsiveness – addresses the actions taken by the organization as a result of specific stakeholders’ demands.
  • The company maintains a reporting channel (hotline) connected with KPMG International and has a local Disciplinary Committee, which evaluates cases related to ethical issues or violation of the code of conduct. The existence of the channel and encouraging its use is part of the ethics and anti-bribery training content.
  • Internal controls of data concerning the G4-SO4 indicator, which refers to trainings in anti-bribery and ethics and independence issues, are standardized and have traceability in the company's information management system. However, information flow between the areas responsible for collecting data and the company’s focal points for consolidation of indicators can be improved to contribute to more accuracy of data and the process of final consolidation.
  • There was an improvement in attending the principle of balance with relation to information on "Good treatment of employees". The sustainability report covered the publication of relevant aspects, including the company's turnover rate and information concerning the fact of the non-distribution of PPL (Profit Sharing Program).
  • According to the verification process around the generation of sustainability performance indicators, the database of the company’s employees information related to the turnover rate (G4-LA1) has standardized internal controls. However, the process of consolidation of this indicator can be improved. It is important to evolve in alignment and formalization of the premises for compilation of data concerning the management areas involved, in order to ensure traceability and continuity of the process of generating indicators in further reporting cycles.
  • The G4-EC3 indicator (coverage of pension plans) has systematized controls for the base used to calculate the indicator. The G4-EC4 (projects with financial incentives) and G4-EC7 (pro-bono services) indicators have remained with the same status concerning information control. There is evidence of the project data but monitoring and traceability activities have not yet been defined. For these indicators attention should be paid to standardization of methods and the memory of calculation to ensure accuracy and traceability of consolidated data, independently of managers in charge of the information.
  • KPMG is preparing for a change of its headquarters in São Paulo city. Professionals who are currently distributed in three separate buildings will be integrated in a unique address. It has to be pointed out that the company has decided to move its operations to a LEED Gold (Green Building Council) certified building and additionally a process is underway for the certification of the office's internal structure, also following the LEED protocols. Such decisions demonstrate the company's concern with environmental aspects of consumption and efficiency of resources, as well as a risk management approach, given the context of possible power supply rationing, which could impact business activities.

Final Considerations

We highlight the efforts applied by KPMG for improving management and reporting of sustainability with continuity of the assurance process. In BSD Consulting’s view, KPMG has procedures and practices related to material issues including ethics, independence, quality, transparency and personnel management. There are opportunities for improvement in further developing the company's vision on sustainability impacts of the material themes and sub-themes as a way to evolve in adherence to GRI G4 guidelines. We stress the importance of enhancing internal control processes, collection and consolidation of data for the sustainability report, ensuring continuity and assertiveness in its information management processes.

São Paulo, February 11, 2015.

BSD Consulting - Brasil