Solutions
Five ways tax leaders can help achieve sustainability goals
Sustainability is a business imperative where tax plays a critical role
Deloitte research reveals that tax departments are actively helping their companies with sustainability initiatives through compliance and Environmental, Social, and Governance (ESG) reporting, with a majority feeling they are on top of sustainability for the moment. However, to keep up with the demands of sustainability, others suggest specialization and advisory support related to ESG is required.
Deloitte surveyed 335 tax leaders globally finding that while tax departments are supporting their business’ sustainability efforts through compliance and ESG reporting, they can do more to help their organization accelerate their sustainability goals and address a central business issue. The report provides five easy steps for tax leaders to take to optimize business sustainability performance.
DOWNLOAD THE REPORTPeople used to see sustainability as one of those fluffy things, with the idea was that sustainability teams would work in their little corner without much support from other teams. But with the pressures coming from regulators, investors and others, and the [sustainability] targets that we’ve put out there publicly, there was a realization that if we’re going to take this seriously, we have to do this as an organization and make tax and finance part of the journey.
Stephanie Fielding, Director of Tax and Sustainable Finance, Bupa
Identify the tax implications of your business’ ESG strategy
Compliance and reporting are critical, but tax leaders should also highlight the tax incentives, savings opportunities, and other sustainability-related benefits that may be available to the business. Additionally, tax can help business leaders understand the tax impact of sustainability-related changes to supply chains, business models, mergers & acquisitions (M&A) and other strategic shifts they may be considering. Furthermore, the tax function will need to help the business understand the tax implications of new sustainability-related processes and technologies. It may also be useful for tax specialists to be connected to R&D, technical, and development teams, to help factor the availability of grants and, early in the product development process.
A good place to start a deeper conversation
89% of Deloitte’s survey respondents indicating their companies have designated a chief sustainability officer (CSO) and 72% indicating they already work very closely with the CSO
Taking tax to the next level
Sustainability measures are likely to start to permeate every aspect of business in the not-too-distant future.
Our survey found that while many tax leaders feel they are on top of sustainability issues for the moment, others suggest specialization and advisory support related to ESG is required. With more change anticipated, tax leaders need to have broad understanding of these fast-evolving areas of sustainability to distinguish themselves and create value for the business.
Tax leaders who help to embed tax into business strategies and financial decisions from the outset, are becoming more integral and valuable to their companies than ever before, and by doing so are making themselves indispensable. Those that are not prepared for these conversations may leave value on the table.