Shifting the mindset, reaping the benefits We have a unique opportunity to improve our defense capabilities and become a more efficient force, while securing a better future. I challenge our Army to examine climate threats, prioritize resources, and take swift action. Christine E. Wormuth Secretary of the Army Department of the Army, Office of the Assistant Secretary of the Army for Installations, Energy and Environment. February 2022. United States Army Climate Strategy. Washington, DC Governments need to begin looking at their mission, strategy, and operations through an ESG lens to better understand their relevant risks, vulnerabilities, and opportunities. In our work, we see governments doing just that to achieve greater organizational stability, better risk management, and increased resiliency— particularly in infrastructure-intensive and defense agencies. In shifting its mindset to leading by example on ESG in all its roles, government can harness the power of ESG to move toward a Modern Government , one that is connected, powered, and trusted. ESG agendas can help attract the next-generation workforce connected to purpose and mission, accelerate governments' efforts to modernize across stakeholder groups, drive innovation, and improve public trust in governments. In particular, these five benefits stand out among others when governments embed ESG in their missions and operations: • Enhanced operations by incorporating business transformation, redesigned business systems, improved data transparency, or new assets that can help mitigate ESG risks and support the agency’s mission • Economic and cost efficiency opportunities through sustainable sourcing, process efficiencies, energy efficiency and renewable energy sourcing, talent attraction and retention, and other financial arrangements related to ESG. ESG also can contribute to creating jobs and attracting businesses, driving economic and regional development • Increased strategic alignment by integrating ESG goals with the agency‘s mission, including ongoing review of requirements, metrics, and targets • Improved public trust and confidence by taking disciplined action around issues critical to the public‘s well-being and from the ability to withstand increased scrutiny from major stakeholders and outside groups • Stronger organizational resilience from improved skills and alignment central to ESG that help agencies adapt to an increasingly uncertain future. 15 Environmental, Social, and Governance: Government leadership as a catalyst for success © 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.