Organizations must measure and provide insight into sustainability. How do you contribute to sustainability and how do you perform on environmental challenges? How do you deal with the working conditions, health and safety of your employees? And how do you manage your organization, looking at your rewards and tax strategy?
Three central factors used to measure sustainability and report on it
Environmental
examines how a company contributes to sustainability and how it responds to environmental challenges, such as waste (recycling), greenhouse gases (emissions) and the production of, for example, plastic (production). This can include existing taxes that stimulate eco‑friendly behavior or are based on a ‘polluter pays’ principle. While it’s important to be in control of your tax risks and to take advantage of tax opportunities, it’s also important to ensure that you are compliant with current tax legislation and regulations on sustainability. Developments are rapidly taking place in the field of tax sustainability, not only at the national level but also at the European and even at the global level.
Social
examines how an organization treats its employees, for example, working conditions, health and safety. Responsible tax is an extension of corporate responsibility: recognizing that tax is the entry-level price we pay for a civilized and caring society. Tax as a corporate responsibility issue and organizations that pay their fair share of tax have grown in importance in recent years and are now considered priorities. An open and transparent dialog between companies, tax authorities, non-governmental organizations (NGOs) and consumers is the key to building trust. To stimulate this, an increasing number of tax benefits are available for organizations that pursue these social objectives.
Governance
examines how a company is managed by looking at factors such as its remuneration policy and tax strategy. By being transparent about your tax position you create trust among your stakeholders. The starting points for this are: bringing structure to your reports, addressing the expectations of stakeholders and clearly explaining how your organization helps in tackling today’s challenges. One way in which our team of advisors can help you is by performing a PACT analysis (Purpose, Approach, Contribution and Tax).
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ESG is a trend that cannot be ignored in the tax world. It is crucial for tax managers to be aware of the impact of ESG on tax trends and to adjust their strategies accordingly. We offer comprehensive support and advice to help companies navigate this complex and rapidly changing tax landscape.
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