Building the Responsible Entrepreneurs of the Future – A week of lecture on Taxes and ESG
Taxes are increasingly viewed as a crucial measure of a business's contribution to society. Companies are pressured to show that they pay the “fair share” of taxes and to display responsible tax practices.
As a result, several initiatives have been launched to increase the transparency around companies’ tax strategies. From the Country-by-Country Reporting to Global Reporting Initiative (GRI) 207 and the latest EU Sustainable Finance Disclosure Regulation and EU Corporate Sustainability Reporting Directive (CSRD), companies are facing increased demand for disclosure around their tax payments and tax conduct.
NHH students had the privilege and honor to listen to the latest developments in the field from two experts on the topics of taxes and Environmental, Social and Governance (ESG). Spyros Perikleous (senior project manager at CSR Europe) and Sandra Martinho Fernandes (associate director at European Bank for Reconstruction and Development) gave two guest lectures within the course FIE441 Taxes and Business Strategy.
The first guest lecture with Spyros focused on the topic of taxes and ESG from a company perspective. CSR Europe is the leading network for Corporate Sustainability and Responsibility in Europe. Founded in 1995, it serves as a platform for companies aiming to promote sustainable growth and societal contribution. CSR Europe tackles societal challenges by fostering innovative business practices and providing tools to integrate sustainability into member operations. Taxes and tax transparency are among the key focus of CSR Europe.
During his lecture, Spyros provided an insightful overview of the key initiatives around company tax disclosure within the scope of sustainability reporting. Among his major projects, he worked on developing guidance for responsible & transparent tax behaviour (see https://www.csreurope.org/download-our-blueprint-for-responsible-and-transparent-tax-behaviour). A complementary work which will soon be launched is the Tax Responsibility & Transparency Index which will offer companies a structured method to collect, measure and monitor their data and stakeholders will have a tool to evaluate their performance and gain an overview of the company's practices.
The second guest lecture with Sandra focused on the topic of taxes and ESG from an investor perspective. The European Bank for Reconstruction and Development (EBRD), established in 1991, is an international financial institution dedicated to fostering market-oriented economies and encouraging private and entrepreneurial initiatives in over 30 countries. The EBRD provides funding for projects across different sectors to support the privatization and restructuring of publicly owned companies, and promotes policies to enhance the business environment as well as climate finance.
During her lecture, Sandra offered an inspiring talk on why taxes are a key element to build a new sustainable world:
“ESG-compliant and/ or sustainable label needs therefore to include and measure the taxes paid by MNEs (as without tax revenues, no Sustainable Development Goals can be achieved by governments of both developed and developing countries)”.
She provided an overview of how a responsible investor like EBRD is monitoring corporation and individual tax conduct when deciding to grant a loan or/and equity investment. She presented several interesting case studies explaining the tax due diligence process applied on the use of cross-border structures by potential clients at EBRD, which if found non-compliant with international tax standards would lead to no credit being granted or equity investment being made, unless adequate mitigating measures would be agreed with such potential clients to adequately offset such risks.
