AI’s dual promise: Enabling positive climate outcomes and powering the energy transition

BRAZIL: As delegates gather for COP30 in Brazil, KPMG International has published the findings of a major survey that reveals overwhelming support from business leaders for AI as a tool to accelerate, rather than hinder, climate progress.

More than 1,200 senior executives from major companies spanning a variety of industries across 20 countries were surveyed for KPMG’s report, AI’s dual promise: Enabling positive climate outcomes and powering the energy transition. The research was conducted to better understand how AI is currently being used to drive sustainability and where business leaders believe action is needed to accelerate and unlock its full potential. 

While AI was debated on the sidelines of COP29 this year, it’s set to be among the most discussed themes as the world’s decision makers attempt to balance the potential impact of energy consumption with the technology’s potential to transform clean energy.

Forecasts vary significantly, but some campaigners have called for a moratorium on new AI data center builds, warning they could significantly increase global emissions by 2030, slowing or even reversing current progress on climate change. The challenge for political and business leaders is understanding AI’s increasing need for energy resources while balancing this with the huge potential the technology has to rapidly speed up progress on clean energy and decarbonization.

KPMG’s survey provides some of the clearest evidence yet that senior executives now understand and are embracing AI as a potential force for good. Ninety-seven percent of respondents said they believe AI is a net positive for accelerating progress towards net zero goals.

The execution gap: why energy’s progress is uneven

Despite strong confidence in AI’s potential, KPMG’s findings highlight that progress remains uneven due to barriers in infrastructure, policy, and financing. One-third of executives (33 percent) identify grid limitations as a major risk, with permitting and construction delays threatening to meet only half of the new AI-driven energy demand by 2030. Policy is also lagging behind innovation: 75 percent of leaders say policymakers are too slow to embrace AI’s climate benefits, creating uncertainty and delaying investment. Financing is another challenge, with 37 percent of energy producers and 33 percent of energy consumers citing high costs and lack of funding as the main obstacles to expanding clean energy. 

While 96 percent of executives believe renewables can meet future AI demand, only 13 percent are willing to make clean power use non-negotiable if it slows deployment or raises costs. As a result, data center expansion is likely to continue globally even without guaranteed access to clean power. Companies that overcome these hurdles by 2027 will secure a lasting competitive advantage.

Turning AI ambition into climate action

KPMG’s survey reveals a clear commitment to both AI and the climate challenge from energy business leaders. With COP30 now underway in Belem, much of the conversation will focus on 2030 and the rapidly approaching deadline for net-zero goals. The summit is a pivotal moment for embracing and exploiting AI to help meet the challenge.

Mike Hayes, Global Head of Renewable Energy, KPMG International and Partner, Climate Change and Decarbonization Leader, KPMG in Ireland, said:

Anish De, Global Head of Energy, Natural Resources, and Chemicals at KPMG International, said, 

Anna Scally, Head of Technology, Media, and Telecommunications, KPMG EMA; Partner, KPMG in Ireland, said, 

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Global VC investment remains strong, driven by AI and supported by increasing exit activity

INDIA: Global venture capital (VC) investment rose from $112 billion in Q2’25 to $120 billion in Q3’25—marking the fourth consecutive quarter of robust investment, according to the latest edition of Venture Pulse from KPMG Private Enterprise, a quarterly report tracking investment trends globally across major regions around the world.

The Americas led with $85.1 billion, while Asia saw muted investment at $16.8 billion. AI continued to dominate VC activity, with significant funding rounds for AI model development and applications. The US accounted for most of the VC investment in the Americas, while Europe saw solid growth. Global exit value climbed to $149.9 billion, the highest since Q4’21, driven by renewed IPO activity. Looking ahead to Q4’25, global VC investment is expected to remain stable, with AI continuing to dominate. Robotics and defense tech will also continue to be focus areas.

The last time the global VC market saw $100 billion+ in investment for four quarters in a row was between Q4’21 and Q3’22. While overall deal volume eased slightly—reflecting a typical seasonal slowdown across the Americas and Europe—the broader market trajectory remained positive. Investor sentiment strengthened steadily throughout the quarter, buoyed by renewed optimism around liquidity pathways and a gradual reopening of exit markets in the Americas and Asia.

During Q3’25, the focus of VC investors globally concentrated on large deals.

AI continued to dominate VC investment activity in other regions as well in Q3’25. In addition to startups engaged in foundational AI model development, venture capital investors worldwide demonstrated increasing interest in AI-powered applications and sector-specific innovations. Beyond AI, defense technology and space technology garnered significant attention during the quarter, largely due to persistent geopolitical tensions. Health technology, quantum computing, and alternative energy also maintained strong investor interest throughout Q3’25.

Regionally, the Americas led global VC investment, attracting $85.1 billion across 3,474 deals in Q3’25. Within the Americas, the United States accounted for $80.9 billion across 3,175 deals. Europe attracted the second-largest share of VC funding during the quarter—$17.4 billion across 1,625 deals—overtaking Asia, where VC investment remained somewhat sluggish at $16.8 billion across 2,310 deals.

“AI is obviously the biggest ticket right now for VC investors globally. If startups aren’t embracing AI in some way, shape, or form, it’s very difficult for them to attract attention,” said Conor Moore, Global Head, KPMG Private Enterprise, KPMG International. “Many of the industries where we’re seeing strong investment are being driven in part by AI-driven solutions—like defencetech and healthtech—or by their importance to the AI ecosystem—like energy and datacentres.”

Q3’25 — Key highlights:

• Corporate VC participating investment increased from $56.1 billion in Q2’25 to $58.6 billion in Q3’25. The United States accounted for a large share of this total ($37.7 billion), marking its fourth consecutive strong quarter of CVC-associated investment. Europe reached a five-quarter high of $9.5 billion in CVC participating investment during Q3’25, while Asia continued to see muted CVC-related investment at $9.1 billion.
• Software remained the leading sector for VC investment.
• Global exit value climbed from $119.2 billion in Q2’25 to $149.9 billion in Q3’25—the highest level seen since Q4’21. At a regional level, U.S. exits rose from $71.0 billion to $74.5 billion quarter-over-quarter, while Asia saw a sharp increase from $28.7 billion to $38.0 billion. Europe also recorded significant growth, with exit value rising from $17.3 billion to $27.8 billion between Q2’25 and Q3’25.
• Global VC fundraising remained exceptionally weak, totaling just $80.7 billion at the end of Q3’25—putting it on pace to fall below 2024’s eight-year low of $196.1 billion.

Key highlights from India:

• India sees VC investment slow in Q3’25 amid an uncertain geopolitical environment.
• India experienced a banner quarter for exits in Q3’25, with exit value surging to a high not seen in at least seven years.
• While interest in India remains high, VC investors have found it difficult to predict what might happen day-to-day, leading them to hold back from making any major funding decisions.
• Despite the soft VC investment in Q3’25, there continued to be optimism in the market given the growth in startup exit activity — particularly in terms of IPO exits.
  • During the quarter, IPO activity was quite strong compared to previous quarters.
• Given India’s strong macros and vibrant capital market, should trade uncertainties be resolved, there is good optimism that VC investment will begin to rebound. Further IPO activity is also expected over the next few quarters in India.

Commenting on the India findings, Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India, said, “VC investment results in India this quarter were driven by the speed bump that was the US tariffs, but people expect that by the end of November, that will settle. And macros are still strong, the capital markets are still vibrant, and a lot of capital has been raised that will need to get deployed — so funding should increase as uncertainties calm. But investors are going to be focused heavily on the path to profitability and cash flows because without those, you won’t get a capital market exit.”

AI continues to power the VC market globally

VC investors continued to double down on AI in Q3’25, with companies developing AI models and platforms attracting many of the largest funding rounds of the quarter. The surge in AI investment extended well beyond the U.S. and Europe. Beyond these headline transactions, AI-focused startups across regions continued to attract significant VC funding rounds, reflecting the growing breadth and attractiveness of AI-focused solutions.

One of the most encouraging developments of Q3’25 was the revival of IPO markets—particularly in the US—which provided long-awaited exit opportunities after years of subdued activity. The number of successful listings not only validated valuations in select high-growth sectors but also reinforced investor confidence that the exit window for VC-backed companies is reopening. For VC investors, the combination of sustained capital deployment and healthier exit conditions suggests a more constructive and balanced venture capital environment heading into 2026.

Steady course expected heading into Q4’25

Looking ahead to Q4’25, global VC investment is expected to remain relatively stable, fueled by continued momentum in AI model development, industry-specific AI applications, and AI infrastructure. Robotics is also anticipated to gain further traction among VC investors over the coming quarter. Given AI’s dominance, companies without AI-driven capabilities could find it increasingly challenging to attract funding. However, in regions such as Africa, Latin America, and Southeast Asia, fintech is expected to remain the primary investment focus.

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Under this collaboration, NSE Academy and KPMG in India will cover a wide range of topics via these programs. These include Capital Markets, Investor Relations, Risk management, Prevention of Insider Trading laws and Compliances, Corporate Governance, Environmental, Social, and governance (“ESG”), and ESG reporting. These programs are designed to cater to the evolving needs of the industry thereby providing a fresh talent pool of skilled professionals.

KPMG in India’s extensive experience and global expertise in the banking and financial services space combined with NSE Academy’s robust adult learning framework, makes these joint offerings a good proposition as this would help participants in receiving training that is among the best. The programs feature a blend of theoretical knowledge and practical applications, including case studies, real-world scenarios, and hands-on projects.

Additionally through this partnership, NSE Academy and KPMG in India will offer short-duration digital certificate courses with KPMG in India being the content partner for these courses which are on Core Finance topics such as – Financial Planning and Analysis (FP&A), Financial Reporting, Treasury, Investor Relations; Data & Technology topics such as – Fintech, Artificial Intelligence(AI)-, Machine Learning (ML), and Robotics Process Automation (RPA) among others.

Sharing his views, Karan Marwah, Partner, CFO Advisory, KPMG in India said, “We are happy to partner with NSE Academy Limited for joint certification programs on topics related to Capital Markets, Investor Relations, Corporate Governance, and others. Given the growth momentum that India is witnessing, there exists a pressing need for professionals to be up to date with the latest evolving trends in governance and reporting and this alliance will allow us to facilitate and provide relevant content on contemporary topics.”

Speaking on the occasion, Abhilash Misra, CEO, of NSE Academy Ltd. said, “We are excited to partner with KPMG in India to offer innovative and practical upskilling programs for future-ready industry talent demand. Our collaboration will provide participants with a unique learning journey curated by experts from the leading multinational professional services network and one of the Big Four accounting organizations.”

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MUMBAI: The second edition of KPMG in India’s ESG Conclave and Awards 2024  concluded on a high note with a full house turnout, that saw companies being honored for their leadership, innovation, and commitment to sustainable business practices. The event centered on the theme of Green and Inclusive Growth and highlighted that in today’s environment, companies must reflect upon their learnings, adapt to be flexible, and evolve proactively with a forward-looking mindset in real time for a sustainable future.

The event saw participation from a plethora of voices representing policymakers, investors ratings agencies, global think tanks, business owners, and business leaders. The participants agreed that, today the urgency to tackle climate change has never been greater. Further growth and sustainability need to go hand in hand, in line with India’s ambitious “ViksitBharat” program (or Developed India). The deliberations highlighted that for any economy and leading companies, the transition towards a green and inclusive future needs a deeper management of policy, people, and underlying technologies. The economy, society, business, and environment don’t exist in isolation -they are part of a system that interacts and influences one another. 

The discussions and deliberations focussed on opportunities and challenges in making this ESG transition with recognized leaders highlighting cutting-edge programs, initiatives, and best practices

In the panel discussion titled, ‘Accelerating Green and Inclusive Growth’, panelists agreed that increasingly we will see firms getting measured and judged against their stewardship, net-zero plans, carbon footprints, new green products, and leadership in the transition and hence it would be crucial for companies to align strategy and business models with ESG goals, set transparent and measurable targets, design for circularity, promote green supply chains, adopt nature-based solutions, boost skilling and ensure purpose-driven business growth.

The second-panel discussion titled, ‘Enabling Green and Inclusive Growth – the role of the stakeholder ecosystem’, focused on how governance frameworks, board oversight, and stakeholder engagement, together with regulatory and policy actions can drive sustainable and equitable development in India. It also captured a wide range of viewpoints, from that of board members, policymakers, providers of finance, investors, and technology leaders.  

The winners in each of the categories were decided based on a meticulous, data-backed, and objective selection process, and evaluation by an esteemed jury. This was to ensure that deserving achievers and winners were brought to the fore and recognized.

Speaking on the occasion Yezdi Nagporewalla, CEO, of KPMG in India said “As corporations, both Indian and global grapple with the challenges posed by climate change, social inequality, and governance challenges, integrating ESG principles into business strategies has become imperative, not only for fostering sustainability, but also for driving long-term value creation. At the very core of the ESG Conclave and Awards is our commitment to working towards aiding sustainable capitalism and green initiatives. The awards are a rightful recognition of the achievements of all the awardees, for having demonstrated clearly, that doing good to society and the environment also means doing good to your businesses”

Sharing her views,  Namrata Rana, National Head of ESG said “ESG principles in Indian boardrooms represent a transformative opportunity for businesses to drive sustainable growth and create long-term value for all stakeholders. By embracing environmental stewardship, social responsibility, and good governance practices, companies can not only mitigate risks and enhance resilience but also seize opportunities for innovation, differentiation, and market leadership. As Indian businesses navigate an increasingly complex and interconnected world, integrating ESG considerations into decision-making processes is essential for building a more sustainable and prosperous future.”

In all, 14 awards were given across two major categories across sectors. The winners are:

Large-Cap Companies 

• Consumer Markets- Hindustan Unilever Limited 
• Pharmaceuticals & Healthcare- Dr. Reddy’s Laboratories Limited
• Industrial Markets & Automotive- Hindustan Zinc Limited
• Infrastructure, Real Estate & Logistics- Godrej Properties Limited
• Technology, Media and Telecom- Wipro Limited 
• Financial Services- Yes Bank Limited
• Energy, Natural Resources and Chemicals- Tata Power Company Limited

Mid-Cap / Small-Cap Companies 

• Consumer Markets- Welspun Living Limited
• Pharmaceuticals & Healthcare- Jubilant Pharmova Limited
• Infrastructure, Real Estate & Logistics- Mahindra Lifespace Developers Limited & Chalet Hotels (Joint Winners)
• Technology, Media and Telecom- Cyient Limited
• Financial Services- Credit Access Grameen Limited
• Energy, Natural Resources, and Chemicals- DCM Shriram Limited

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Yezdi Nagporewalla, CEO, of KPMG in India 

The government of India as a first major move in its third term has taken a balanced view in Budget 2024 to chart the course for transforming India into ‘Viksit Bharat’ by 2047. Sustained efforts continuing on nine priority areas including energy security, infrastructure, innovation, and R&D amongst others will certainly provide the necessary fillip to the economy.  

The Budget saw a special focus on creating ‘employment’ and ‘Ease of Doing Business’ in India with announcements including a comprehensive review of the Income Tax Act, the announcement of an amnesty scheme under income tax, limited reopening of reassessments and providing incentives to employers for job creation. 

A prudent growth forecast of 6.5-7 percent for the current fiscal continues to uphold the India growth story and efforts to promote foreign investments dovetail well with a reduced rate of corporate tax for foreign companies, rationalization of customs duty rates, simplification of FDI and overseas investment route, etc.  The overall theme of easing personal income tax and increasing tax on capital gains signifies the right intent and move towards enhancing disposable income for mid-salaried employees.

Vijay Chawla, Partner and Head, Life Sciences, KPMG in India

The pharma sector gets a boost with increased R&D allocation, digital healthcare promotion, and initiatives encouraging innovation and entrepreneurship, alongside simplified compliance and private investment incentives driving sector growth. Additionally, three cancer drugs have been exempted from customs duties, making life-saving treatments more accessible and affordable. This will boost growth in the sector.

The pharma sector gets a boost with increased R&D allocation, digital healthcare promotion, and initiatives encouraging innovation and entrepreneurship, alongside simplified compliance and private investment incentives driving sector growth. Additionally, three cancer drugs have been exempted from customs duties, making life-saving treatments more accessible and affordable. This will boost growth in the sector.

Rajeev Dimri, Head of Tax, KPMG in India

Union Budget proposals 2024-25 showcase continuity and inclusivity, given India’s growth story. The proposals are focused on building a roadmap towards increased development in India, making Viksit Bharat a tangible future. The proposal themes are largely around deepening innovation and indigenous manufacturing, with emphasis on skills, women empowerment, and building sound policies around those in employment.

All of these measures seek to strengthen and stimulate the economic fora. Specifically on taxes, immediate steps have been taken to alleviate the MSME sector. On the GST and Customs duty front, there will be an increased focus on duty and rate rationalization, with a 6-month window for Customs rate review, for ease of trade and removal of duty inversions. A slew of tweaks has been introduced in customs duty rates for various priority sectors like mobile and telecom, and energy, amongst others.

On the Direct Tax front, with a 6-month comprehensive review of the anvil, the focus has been to simplify, provide tax certainty, and reduce litigation with the reintroduction of amnesty schemes. The proposals while restructuring the TDS rate structure, also emphasized the widening of the tax base with an increase in capital gains tax. To boost investment in India, the FDI rules have also been proposed to rationalize, along with a reduction in the corporate tax rate for foreign companies.

Sandeep Paidi, Office Managing Partner, Hyderabad, KPMG in India

As inferred from the Hon’ble finance minister’s budget speech, Andhra Pradesh is one of the beneficiary states under the Union Budget. The state government, which placed priority on developing a greenfield capital at Amaravati and world-class infrastructure has received support from the Union Government. Rs 15,000 crore will be provided as financial support through multilateral institutions in this fiscal to develop Amaravati. This is expected to provide impetus to the development of the city and create definitive investment opportunities across multiple sectors.

Given its strategic location on India’s east coast, financial support for the development of external infrastructure at the two industrial nodes of Kopparthy and Orvakal will provide a boost to manufacturing in the State. Facilitating the completion of the Polavaram project is also on the agenda which will provide a lifeline for the State and promote agriculture, drinking & industrial water requirements, and food security.

The economic future of Andhra Pradesh will play an integral part in the country’s Viksit Bharat paradigm

Abhishek Jain, Partner and Head, Indirect Tax, KPMG in India

Under the GST Council’s recommendations, the Budget proposes enabling provisions for regularising GST dues and contours of the amnesty scheme for interest and penalty dues.  The Finance Bill also proposes to eliminate the distinction between fraud and non-fraud cases for a limitation period with penalty distinctions continuing. The industry may need to watch out for prescriptions on sectors not covered for benefits under manufacturing in bonded warehouses. Also, many industries were eager to hear about new PLI Schemes. With the Government’s sustained emphasis on “Make in India,” industry would be eager to see how developments unfold in this area.

Manoj Kumar Vijai, Office Managing Partner, Mumbai, KPMG in India

The Union Budget 2024-25, released today, showcases the government’s commitment to sustainable economic growth and inclusivity. Key highlights, including increased capital expenditure, tax reforms, and enhanced focus on the manufacturing and technology sectors, signal a robust framework for corporate growth and innovation. At the heart of this budget lies a commendable focus on segments needing more attention, including the Poor, Women, Youth, and Farmers, with significant allocations aimed at uplifting these groups. Honourable Finance Minister laid down nine clear priorities for the coming year including Productivity in agriculture; Inclusive Growth; Employment and skill; Boost to Manufacturing & Services; Urban Development; Energy Security; Infrastructure Development; Innovation and R&D; and Next-Generation Reforms.

For corporates, the emphasis on infrastructure development with a capital outlay of Rs. 11.11 lakh crore (3.4% of GDP) will significantly boost sectors such as construction, real estate, and logistics, creating numerous opportunities for employment, investment, and expansion. The introduction of tax incentives for green energy projects and digital enterprises demonstrates a forward-thinking approach, encouraging businesses to adopt sustainable and digital-first strategies.

The simplification of tax structures, reduction in corporate tax rates for MSMEs, and streamlined compliance procedures are welcome steps that will enhance the ease of doing business, fostering a more conducive environment for entrepreneurial ventures and foreign investments. Furthermore, the government’s focus on skill development and education reforms, with a substantial Rs. 2 lakh crore package, is poised to create a more skilled workforce, addressing critical talent gaps in key industries.

Overall, this budget lays a strong foundation for an accelerated growth trajectory, positioning India as a global economic powerhouse. It is now up to businesses to leverage these opportunities, innovate, and drive the next wave of growth and transformation in the Indian economy.

Nikhil Sethi, Partner and National Head – Consumer Goods, KPMG in India

The budget is based on a thoughtful approach to balancing economic growth with fiscal responsibility. By maintaining essential spending and introducing targeted measures such as tax revisions, housing boosts, incentivizing employment thus unlocking disposable income, innovation in farming and its supply chain, access to credit, and next-generation reforms for e-commerce, they aim to stimulate consumption and drive economic momentum. 

The approach is expected to yield positive outcomes for the consumer markets, in the enhanced economic environment with rural as well as urban coverage. The investments in long-term growth drivers like infrastructure, tourism, and the skilling of youth are poised to bolster investor confidence, unlocking new opportunities for expansion and innovation with public-private partnerships. Enabling digital infrastructure to boost productivity and facilitating efficient markets and sectors with a boost to the green economy via allocation on climate considerations is also expected to support the sector’s ambitions.

These initiatives are expected to contribute to the nation’s overall economic resilience. Additionally, the government’s focus on self-sustainability is anticipated to yield long-term benefits by reducing input costs, enabling industries to enhance pricing strategies and boost profitability. This approach is expected to benefit consumers, businesses, and the economy, fostering a virtuous cycle of growth.

Dr. Puneet Mansukhani, Partner and Head, Retail, KPMG in India 

The horizon for retail and E-commerce in India gleams with promise. The government’s strategic initiatives, including support for small retailers through the ONDC platform, streamlined financing for MSMEs, and simplified GST reforms, paint a vibrant canvas. As infrastructure improves, supply chain costs are poised to decrease, while policies promoting digital payments add hues of growth. E-commerce export hubs, forged through public-private partnerships, beckon local manufacturers toward global vistas. Simultaneously, the launch of 100 street food hubs across select cities nourishes the food business and elevates cloud kitchens, creating a symphony of opportunity. Overall, the budget will help foster a conducive business environment, drives consumption, and fuels growth.

Naveen Aggarwal, Office Managing Partner – Delhi NCR, KPMG in India

In her 7^th consecutive budget presentation in a row, Hon’ble Finance Minister Nirmala Sitaraman laid out a comprehensive roadmap for Viksit Bharat, focusing on key sectors crucial for India’s growth and development. With a sharp focus on pioneering innovation, infrastructure development, enhancing skill development, and productivity, this year’s budget brought a roadmap towards India’s journey towards a developed economy by 2047.

Highlighting the nine growth imperatives and picking up from the six-pronged strategy for ‘Amrit Kaal’ as mentioned in the Economic Survey 2024, the budget brought announcements to boost investor confidence, enhance domestic production, and facilitate ease of doing business across a range of sectors. Retaining the infrastructure spending at 3.4% of GDP, the same as in the interim budget, is expected to have a multiplier effect across the ecosystem at the back of a prudent fiscal discipline is a step in the right direction and shows the economy is on a strong footing.

With the new tax code on the anvil aimed at simplifying and rationalizing tax measures to enhance ease if doing business, this year’s budget stands true to the government’s vision of fostering sustainable, lasting, and inclusive growth and lays the foundation for a robust economic future for the country.

Kalpesh Maroo, Partner & National Head – Deal Advisory – M&A Tax, PE, KPMG in India

The Budget 2024 is truly a mixed bag from a deal-making perspective.  Indian founders and promoters will be smiling at the reduction of capital gains tax on exits from 20 percent to 12.5 (without indexation) and foreign investors are hit where it matters most, exits would now be taxed at 12.5 percent as opposed to 10 percent.  Rationalization of the period of holding to classify as long-term capital gains to 12 months for listed securities and 24 months for other assets is welcome. 

Abolition of angel taxation is super helpful as it will remove significant complexity from a deal structuring perspective.  The reduction of timelines for reopening tax proceedings to 5 years and the introduction of a time cap for withholding taxes on payments to non-resident sellers will also significantly reduce the degree of uncertainty in deal-making. 

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Eight Key Cybersecurity Considerations for 2024

1. Meet customer expectations, and improve trust – With cyber threats and data privacy concerns growing, CISOs should be seeking to work closely with stakeholders across the organization to maintain trust by ensuring operations are resilient in the event of an accident.
2. Embed cybersecurity and privacy, for good – The act of embedding security across the organization should be viewed as an exercise in driving operational excellence.
3. Navigate blurring global boundaries – A central consideration that organizations should examine is how to most effectively navigate the increasingly complex global business landscape to ensure resilience and business continuity.
4. Modernize supply chain security – Despite the challenges and competing priorities, ensuring the supplier and partner ecosystem is secure should not be a bottleneck; it should be a business enabler.
5. Unlock the potential of AI – carefully – Security and privacy leaders should be supporting the business objectives reliant on AI and determine how to harness this game-changing technology effectively and responsibly.
6. Supercharge security with automation – As operating models digitize, security teams should automate and update their processes to keep pace.
7. Make identity individual, not institutional – Driven by expanding business models, it’s vital that organizations now view identity not in isolation but from a broad perspective.
8. Align cybersecurity with organizational resilience – Organizations should find a way to create a broad-ranging culture of resilient security throughout the enterprise and seek to ensure all stakeholders are on the same page.

Cyber Strategies for 2024

Following are some recommendations for CISOs to consider as they seek to accelerate recovery times, reduce the impact of incidents on employees, customers, and partners, and aim to ensure their security plans enable — rather than expose — the business.

People

• Connect with your organization’s ESG team to determine whether they consider cyber a key aspect of their mandate. If not, work to build awareness of how and why it’s important to all three areas of ESG
• Bring a new perspective to the board on what could disrupt the business and what should be done to manage those risks without impacting operations and customer experience.
• Foster organization-wide behaviors and cultural alignment to prioritize what truly matters to the organization in terms of data, services, and infrastructure.

Process

• Run the cyber team like a business, which means you must give up a degree of control over what other parts of the organization are doing from a security perspective.
• Define your initial vision and strategy for automation.
• Enhance transparency to build trust across global supply chains
• Take a risk-based approach to assessing third-party processes rather than a blanket approach

Data and Technology

• Identify what data the organization has centrally accessible and define an automated continuous controls monitoring plan
• Ensure the purpose of AI algorithms, whether developed in-house or externally, is clearly defined and documented and training data is relevant, appropriate for the business objective, and secure consent
• Leverage intelligent automation to gain higher visibility into the changing supplier risk profiles and build a sustainable and scalable forward-looking third-party program.

Regulatory

• Sharpen your global regulatory intelligence around cyber in general and ESG and privacy in particular to ensure timely compliance and reporting
• Align your AI framework with current standards and develop solid AI governance by aligning the priorities of the various business leaders in the organization
• Maintain an understanding of the global regulatory landscape

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INDIA: KPMG has launched its 24th Annual Global Automotive Executive Survey report titled – ‘Getting real about the EV transition’. The report examines in detail how executive sentiment is changing and the concerns and challenges that make global automotive leaders more cautious.

KPMG’s 24^th Annual Global Automotive Executive Survey

Now in its 24^th edition, the survey of 1,041 senior executives in thirty countries and territories reveals a dip in optimism as the sector deals with concerns over the global economy and rising costs. However, auto executives hold a more realistic view of the EV transition.

EV penetration outlook is maturing – with less variation in estimates of market share for 2030

Executive expectations about the shift to electric powertrains continue to mature. In the past, when KPMG asked executives across the industry about how they expected EV penetration to trend in their markets, the responses varied widely. Now the range of estimates has narrowed, a sign of greater realism. Even so, the mean estimates for penetration rose in this year’s survey. In India, respondents feel that 20% of new vehicle sales will be battery-powered (excluding hybrids) by 2030.

Customer experience is a key differentiator

While performance remains the most important selling point, a seamless and hassle-free customer experience has moved up to second place. The emphasis on a smooth customer experience extends from buying the car to having seamless operating software in it, but the latter is a challenge for manufacturers. The car’s hardware is usually reliable, the software less so.

The software-defined vehicle provides an opportunity to supply all sorts of driver applications. However, consumers are not likely to sign up for software subscriptions if the products aren’t compelling. In this year’s survey, OEM executives in particular are less confident than in previous years that they can generate subscription revenue. How good is cybersecurity? Widely publicized breaches have raised concerns about automotive cybersecurity. In our survey, executives are still confident that automakers provide adequate cybersecurity and customer data protection, but they may be over-confident.

Gary Silberg, Global Head of Automotive at KPMG International, said: “A year ago, we said that automotive executives sensed the future was theirs to seize. In the latest survey, more than 1,000 executives in 30 countries again said they see enormous opportunities. But they are becoming more sober in their assessment of market prospects. Having committed more than half a trillion dollars to the EV transition, the industry is asking when companies will see a return on the investment. Right now, almost all automakers are losing money on their battery-electric vehicles, possibly presaging a shakeout among EV manufacturers and suppliers.

Our 24th annual survey examines in detail how executive sentiment is changing and the concerns and challenges that make global automotive leaders more cautious. The upshot: to help ensure companies end up as winners, not losers, executives should rethink their strategies and ask themselves some difficult questions about potential shifting consumer habits, especially driven by a cost-of-living crisis, the possibility of fewer government subsidies, and how the industry can potentially vertically integrate, creating more efficient operating systems. 

Finding the right answers to these and other strategic questions will help determine how companies succeed in the coming years. We believe that a dazzling future for the automotive business—with amazing products, more delighted consumers, and a positive impact on the planet—is still in view. But getting there will require overcoming near-term challenges.”

Vinodkumar Ramachandran, Partner, Head of Business Consulting, KPMG in India says, “Consumers are increasingly savvy and demanding about the technology in cars. Manufacturers should stay ahead of their competitors in offering the latest equipment in vehicles, advanced connectivity features, and enhanced safety technologies.”

Just in case is overtaking just in time

After the disruptions of the past few years, the new norm in supply chain management is becoming “just in case,” rather than “just in time.” Companies are pursuing a wide range of strategies to build resilience and things are far better than two years ago. Still, there is a high level of concern about the continuity of supply for many commodities and components over the next five years.

The technology challenges grow more complex

In the latest survey, automakers indicated that they feel less prepared than in the previous year for advanced technologies, such as artificial intelligence, digital twins, and advanced robotics. Only 12 percent of auto executives said they felt extremely well prepared, down from 22 percent the year before. The change is likely associated with the rapid advances in artificial intelligence, particularly generative AI, which is expected to bring automation to white-collar jobs. Automakers are going to have to train more workers to take advantage of AI in all its forms and must compete with other industries to hire people with the requisite skills. When it comes to powertrain technology, this year more companies seem to be hedging their bets. Hybrid technologies have jumped from fourth to second place overall in technology.

Faced with so many challenges and opportunities, executives should recalibrate strategies—and act. KPMG’s Global Automotive Executive Survey team has outlined four key priorities for top leaders to better position them in the altered automotive business:

1. Manufacturers should hedge their bets about the trajectory of both the internal combustion engine and all the alternatives. However, if they spread themselves too thin, they risk losing to competitors that more successfully predict the future and focus more narrowly. The answer, then, is to entertain heretical theories, employ a diverse array of talent with different perspectives, and make your best bets.
2. Generative AI has captured the imagination of business leaders across industries and is vastly expanding access to AI. We believe AI technology will likely touch virtually every aspect of the automotive business, from the way autos are designed and manufactured to how they are sold and driven. The critical question for auto executives, then: Is your AI strategy sufficiently comprehensive and forward-looking?
3. Car manufacturers have tended to go it alone when it comes to developing automotive technologies, often with unspectacular results. Given the array of business opportunities and the limited pool of skills, auto companies have little choice but to look outside for the ideas and know-how they need to supercharge their R&D operation.

To read KPMG’s Global Automotive Executive Survey in full, go to:  www.kpmg.com/automotive

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