A company’s approach to tax is no longer just a question of compliance. In the context of the environmental, social, and governance (ESG) imperative and the broader sustainability agenda, it is becoming a powerful indicator of how a business performs as a steward of nature, how it views its role in society and its relationships with stakeholders, and how it assumes its commitment to its purpose.
There are significant upsides to getting the tax sustainability narrative right. Looking at tax reporting through an ESG lens has the potential to tell a more holistic and relevant story about a business’s purpose, thereby building trust. And unlike, say, a commitment to net-zero emissions, which might take years to document and achieve, a company’s tax “footprint”- how much taxes are paid, and to whom - is something stakeholders are increasingly asking a company to report on today. As a result, how businesses manage their tax affairs is increasingly becoming an early indicator of how they might manage other aspects of the ESG agenda.
How PwC can help
While there are quite a few tax and legal services’ angles associated with enabling companies’ transition to a more sustainable future (https://www.pwc.com/gx/en/services/tax/esg-tax.html), PwC’s priority offerings can be summarized as follows:
Net Zero Transformation: We help clients understand how net zero transformation will impact tax strategy, transparency, compliance obligations, investment opportunities, subsidy and incentive opportunities and revenue.
- Sustainable Value Chains: We help companies achieve their environmental goals while remaining competitive in today's global economy and by addressing all relevant international and corporate tax matters, indirect tax and transfer pricing issues.
- Reporting & Governance: We help clients address a more transparent and accountable environment, where tax reporting is under the spotlight, and where different (tax / non-tax primarily) reporting frameworks and their intersection (CbCR / Public CbCR - CSRD) require companies to have in place a more coherent and transparent tax narrative.
- Sustainable Capital: We help companies evaluate the ESG, climate and sustainability-related risks and opportunities in the context of a due diligence / other diagnostic assessment and by advising on pre-deal considerations (e.g., DD on environmental taxes / incentives, governance / policies’ review, supply chain legal DD) and post-deal rationalization.
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