Urgent priorities Government agencies each have their own priority ESG areas of focus, which should be aligned with their strategic mission and reflective of constituent, employee, and other stakeholder interests. For example, Spotlight on health equity: environmental agencies may have an outsized focus on the E, while health and human services agencies may be more than a social issue more focused on strategies related to the S. On the whole, market signals identified by KPMG point to several ESG issues for governments to consider H istorically, health equity has been prioritizing to mitigate pertinent risks and create sustainable opportunities for their agency, employees, and een through the lens of the social s constituents: pillar of ESG and as the sole responsibility of health-related entities. However, health equity is dependent on a broad ecosystem of Help optimize natural capital use— Diversify energy sources—Reimagine Prioritize privacy and cybersecurity Adopt innovative approaches to natural the use of different energy sources, —Help ensure data privacy and actors across the E, S, and G capital management to increase suppliers, transportation systems, and security of critical assets. The addressing various social efficiencies and protect ecosystems. infrastructure to bolster energy protection of critical assets and data determinants of health—from The preservation of natural capital and resilience, sustainability, and security. is important not only for economic stability, education, and biodiversity is critical to the continued delivery of Decarbonization is at the forefront of many constituent security but also for maintaining national government benefits and services, including governments’ ESG strategies, including efforts to security generally. As the adage goes, you can have social and environmental context to agriculture, access to clean water, food safety, and improve energy efficiency, accelerate the shift to security without privacy, but you can’t have privacy digital access, neighborhoods and drug production. In this way, natural capital protection renewables, electrify fleets, and reduce energy without security. Privacy and cybersecurity will be built environments, and more. New is implicitly a societal and economic problem and is a consumption. To achieve future emissions targets, increasingly critical to help ensure the health and solutions lie in the adjacencies and key threat to national security. Climate action and the agencies need to understand their current emissions safety of the public. protection of natural resources cannot be thought of footprint, define a baseline for carbon emissions, and intersections between these in isolation. establish a strategy for execution. seemingly unrelated actors. Inspire a future workforce—Invest in a Improve climate resiliency—Mitigate Help ensure equitable service delivery Focusing on shifting the system healthy, diverse, and competitive —Prioritize access, equity, and mission disruption caused by heightened through modern solutions built around workforce to enhance employee experience in the delivery of climate events and realize opportunities government services. Many social attraction, retention, and engagement, to enhance infrastructure, supply chain, learning with your stakeholders, issues impact equity at the community and ultimately, advance your mission. and operational resiliency and security. designing with your communities, and This starts by demonstrating an interest Government agencies need to consider level, including healthcare services, homelessness, acting with your partners provides a in ESG and a sustained commitment to address ESG existing vulnerabilities and how to manage climate access to green space, incarceration, youth issues relevant to the agency‘s employees and risks given those vulnerabilities. Incorporating “whole investment, and pandemic recovery. Health equity, framework for action to build stakeholders. Then, develop progress reports and of life” physical infrastructure asset management into more specifically, is a critical ESG issue for compounding momentum until a point communications to chart progress toward those goals. long-term planning, investing in resilient infrastructure, governments to address, as access to quality of breakthrough, and beyond. Also, evaluate employee sentiment around adopting an equity lens and leveraging advanced healthcare is impacted by social determinants of compensation and rewards, career pathing, and analytics to improve emergency preparedness, and health and heightened climate events. mentorship programs. implementing operational resiliency and continuity of operations plans are just some ways governments are improving climate resiliency. Environmental, Social, and Governance: Government leadership as a catalyst for success 7 Environmental, Social, and Governance: Government leadership as a catalyst for success 8 © 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms © 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.