6 Environmental, Social, and Governance: Government leadership as a catalyst for success Governance • Transparency and disclosure • Stakeholder engagement • Systemic risk management • Cybersecurity • Ethics and integrity • Supply chain risk and governance • Human rights • DEI • Health equity • Working conditions • Privacy of constituent data • Supplier diversity • Workforce experience • Military/veteran support • Quality service delivery • Environmental justice Social • Environmental and climate risk • Water security • Waste management • Greenhouse gas and carbon emissions • Energy management and resilience • Fleet electrification • Land use • Air quality • Impact to ecosystems and biodiversity Environmental © 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. ESG imperatives in government The scope of ESG includes many issues essential to the mission of governments today—whether reducing wildfires in California, installing broadband in rural Texas, or deploying cyber-secure microgrids to help ensure energy resilience. While many ESG initiatives are intrinsic to the mission of government agencies, thinking about them as interrelated pieces under a common framework helps set goals, measure success, and ensure accountability. Of course, many ESG initiatives do not fall cleanly into either the E, the S, or the G category. Rather, they often begin with a focus in one area and flow into adjacent areas, incorporating key elements of the other categories. Governments will each have their own mix of priority ESG issues, but some prominent issues on governments’ agendas today include: