The complexity of government structures and systems makes speed to action challenging. ESG initiatives need to outlive heated debates of the moment because some take many years before showing progress. Governments must work harder to achieve a unified direction on ESG, face budgetary constraints and financial risks related to ESG issues, and are limited by legacy technology and systems to collect and secure data, which slows progress. Additionally, competing efforts within governments make it difficult to prioritize ESG issues, especially when they need to be weighed against each other. Decarbonization tactics, for example, also need to consider impacts to the natural environment and biodiversity. Finally, human capital challenges, such as From pain to purpose Governments face a number of pain points when addressing ESG issues. a lack of ESG-specific talent and few clear roles and responsibilities around ESG, also complicate plans and efforts. At the same time, governments are challenged to act quickly by a heightened risk of inaction, a slew of new executive orders they must abide by, and external pressures that create new ESG demands. They also must consider employee sentiment and demonstrate a commitment to ESG as an employer. Environmental, Social, and Governance: Government leadership as a catalyst for success 14 © 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.