Thursday, February 2, 2023
  • Login
CEO North America
  • Home
  • Business
    • Entrepreneur
    • Industry
    • Innovation
    • Management & Leadership
  • CEO Interviews
  • CEO Life
    • Art & Culture
    • Food
    • Health
    • Travel
    • Environment
  • Opinion
  • News
  • Multimedia
No Result
View All Result
  • Home
  • Business
    • Entrepreneur
    • Industry
    • Innovation
    • Management & Leadership
  • CEO Interviews
  • CEO Life
    • Art & Culture
    • Food
    • Health
    • Travel
    • Environment
  • Opinion
  • News
  • Multimedia
No Result
View All Result
CEO North America
No Result
View All Result

Tax in the age of ESG

in Industry
Tax in the age of esg
Share on FacebookShare on Twitter

The global pandemic has elevated and accelerated the profile of ESG for all businesses. The 2021 COP26 Conference focused on environmental issues, where governments proposed wide-ranging, transformational policies and remedies to address the climate crisis.

ESG is now a measure of corporate behavior, and it has become an integral part of branding, customer choice, responsible investing and financing. It extends to the war for talent, with millennials and GenZ paying particular attention to business policies and actions related to ESG.

While, understandably, the debate has been focused on the environmental aspects, there are growing discussions regarding business obligations for private businesses under the social elements of ESG and how tax can play a role in shaping their strategies. The debate over how governments will pay for the enormous costs of COVID-19 has heightened the profile of tax, and private businesses will be expected to pursue responsible tax policies from a reputational perspective, given how embedded they are in local communities.

This environment gives private businesses a unique opportunity to review their tax affairs from a social responsibility perspective and present them in a way that enhances their brand and underpins its reputation.

There are four main areas where tax and ESG overlap, and each has a strong social responsibility theme:

  • Green taxes and regulatory changes
  • Tax transparency, ESG governance and tax impact reporting.
  • Business transformation driven by changing business models, evolving supply chains and hybrid working models.
  • Increased focus on tax revenues, scrutiny of company structures and holistic tax contributions to governments and, in turn, society as an outcome of COVID-19.

This is, of course, in an era of responsible tax.

Tax as a brand enhancer

There is an evolving narrative regarding tax and its societal benefits. The Friedman doctrine holds that a company’s first responsibility is to its shareholders, and it is obligated to generate profits. The pandemic has brought forward the alternative view that corporations have a responsibility to deliver benefits to a much broader population of stakeholders.

In addition, does a business have a wider obligation to pay its taxes rather than sustain the employment of a large community of workers and return profits to shareholders – which might be viewed as a purpose-driven business? Wherever a private business sits on this spectrum, it is absolutely apparent that the role of tax in the S of ESG has never had such a high profile.

ESG as a driver of growth

As ESG evolves and develops, an increasing body of evidence suggests businesses that embrace the opportunities in this space outperform their competitors for the following reasons:

  • ESG is a facilitator for top-line growth in accessing new markets and using trust to expand into new areas
  • ESG reduces costs.
  • ESG compliance minimizes regulatory and legal intrusion.
  • ESG increases employee productivity.
  • ESG optimizes investment and capital expenditures.

Private companies are particularly well placed to move quickly in this environment, and agile, entrepreneurial businesses can (and should) adopt ESG compliant strategies to drive both top- and bottom-line growth.

The increased focus on social factors emphasizes social and ethical integrity as a determining factor by which company products and services are purchased by consumers, and tax is now a key part of this debate.

Why tax is important in the S in ESG

There are a number of reasons why businesses should review their tax affairs in light of social responsibility:

  • Green taxes and regulatory change
    So much legislation has been enacted in recent months that it is key for companies to review their tax affairs from an ESG perspective. This isn’t just about compliance but ensuring that they have benefited from any green credits and incentives that they may be entitled to. At the very least, businesses have a social responsibility to ensure that they are complying with this new regulatory environment, and they also the opportunity to publicize adherence as part of their ESG reporting.
  • Transparency
    Many businesses have publicized their tax strategy and policies and have been explicit in the direct and indirect tax contributions they’re making to their economies. Given the fast-changing environment, there is an opportunity to reinvent current tax strategies and policies and ensure that they are fit for purpose. For those who haven’t done so already, this will quickly be a societal norm that should be addressed now. Transparency is relevant to all stakeholders of a business and is an area of focus for customers and financial institutions alike.
  • Transformation
    Many businesses are driving decarbonization, and the pandemic has transformed supply chains and value chains which have evolved quickly. In addition, hybrid working models have transformed employment policy, labor conditions, pay equity and mobility.

Businesses, understandably, have focused on enabling this change and responding to the challenges presented by the pandemic. Now is the time to ensure that they are also underpinning and supporting their ESG strategy by reviewing their tax affairs in light of the regulatory changes, requirements for tax transparency and the transformation of their businesses over the past two years. A key aspect of this review will be ensuring that these changes and revised policies are deemed to be socially responsible and an essential part of their ESG strategy.

Sound tax advice is now more crucial than ever with private companies around the world facing new opportunities and challenges of geopolitical shifts, technological innovation, globalization and new business and consumer demands.

I invite you to visit the KPMG Private Enterprise tax website for further insights on how the right tax strategy can help you successfully navigate both the growth of your business and your social responsibilities.

By Mark Linter

This article originally appeared at https://home.kpmg/xx/en/blogs/home/posts/2022/03/tax-in-the-age-of-esg.html and is republished with permission.

Tags: CEOCEO North AmericaCEO NorthamChief Executive Officer

Related Posts

The next era of work will be about skills, not pedigree
Business

The Next Era of Work Will Be About Skills, Not Pedigree

Sustainable retail
Business

Sustainable Retail

Spotlight on us property and casualty
Industry

Spotlight on US Property and Casualty

What an accelerating secondhand market means for fashion brands and retailers
Industry

What an Accelerating Secondhand Market Means for Fashion Brands and Retailers

Inflation reduction act and renewable energy development: its advantages and limitations
Industry

Inflation Reduction Act and Renewable Energy Development: its Advantages and Limitations

Shell ceo expects more taxes on oil industry to help consumers with energy bills
Industry

Shell CEO Expects More Taxes on Oil Industry to Help Consumers With Energy Bills

Ethereum’s ‘merge’ is a big deal for crypto — and the planet
Business

Ethereum’s ‘Merge’ Is a Big Deal for Crypto — and the Planet

How financial institutions can win the battle for trust
Industry

How financial institutions can win the battle for trust

Five steps to get industries on track for net zero
Environment

Five steps to get industries on track for net zero

Global m&a industry trends: 2022 mid-year update
Industry

Global M&A industry trends: 2022 mid-year update

No Result
View All Result

Recent Posts

  • Airlines cancel over 1,800 U.S. flights as ice storm hits multiple states
  • Tinder owner to lay off 8% of its staff as growth falters
  • Biden moves to slash U.S. credit card fees, app charges
  • New York City Votes To “Skip The Stuff” In Take-Out Orders
  • How to Test If Your Interview Process Is a Nightmare

Recent Comments

    Archives

    Categories

    • Art & Culture
    • Business
    • CEO Interviews
    • CEO Life
    • Editor´s Choice
    • Entrepreneur
    • Environment
    • Food
    • Health
    • Highlights
    • Industry
    • Innovation
    • Issues
    • Management & Leadership
    • Multimedia
    • News
    • Opinion
    • PrimeZone
    • Printed Version
    • Travel
    • Uncategorized

    Meta

    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org

    • CONTACT
    • GENERAL ENQUIRIES
    • ADVERTISING
    • MEDIA KIT
    • DIRECTORY
    • TERMS AND CONDITIONS

    Editorials – stuart.james@ceo-na.com

    Editor-In-Chief – caroline.sposto@ceo-na.com

    Editorials – editorials@ceo-na.com

    Advertising – media@ceo-na.com

    NEW YORK

    110 Wall St.,
    3rd Floor
    New York, NY.
    10005
    USA
    +1 212 432 5800

     

    MEXICO CITY

    Paseo de la Reforma 296,
    Floor 38
    Mexico City
    06600
    MEXICO

    • CONTACT
    • GENERAL ENQUIRIES
    • ADVERTISING
    • MEDIA KIT
    • DIRECTORY
    • TERMS AND CONDITIONS

    Editorials –
    stuart.james@ceo-na.com

    Editor-In-Chief –

    caroline.sposto@ceo-na.com

    Editorials – editorials@ceo-na.com

    Advertising –
    media@ceo-na.com

    NEW YORK

    110 Wall St.,
    3rd Floor
    New York, NY.
    10005
    USA
    +1 212 432 5800

    MEXICO CITY

    Paseo de la Reforma 296,
    Floor 38
    Mexico City
    06600
    MEXICO

    CEO North America © 2022 - Sitemap

    No Result
    View All Result
    • Home
    • Business
      • Entrepreneur
      • Industry
      • Innovation
      • Management & Leadership
    • CEO Interviews
    • CEO Life
      • Art & Culture
      • Food
      • Health
      • Travel
      • Environment
    • Opinion
    • News
    • Multimedia

    © 2023 JNews - Premium WordPress news & magazine theme by Jegtheme.

    Welcome Back!

    Login to your account below

    Forgotten Password?

    Retrieve your password

    Please enter your username or email address to reset your password.

    Log In