Five ways tax leaders can help achieve sustainability goals
Sustainability is a business imperative where tax plays a critical role.
A Deloitte survey of 335 tax leaders globally has found that while tax departments are supporting their business’ sustainability efforts through compliance and ESG reporting, more can be done to accelerate the company’s sustainability goals and address a central business issue. Our report identifies five actions that tax leaders can take to optimise business sustainability performance.
The short video below summarises the five ways that tax leaders' can help to achieve sustainability goals.
Tax can be a catalyst for positive change
Five ways tax leaders can help achieve sustainability goals
Read transcript
Through our survey we found that while many tax leaders feel they are on top of sustainability goals for the moment, others suggest specialist advisory support 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.
Five ways to optimise business sustainability performance
Identify the tax implications of your company's ESG strategy
Tax leaders are well placed to advise on the tax impact of sustainability-related changes to supply chains, business models, mergers & acquisitions and other strategic shifts a business may be considering. The tax function will need to help the business understand the tax implications of new sustainability-related processes and technologies, and advise R&D and technical product teams on the availability of grants.
Understand the tax implications of the value chain
Meeting goals can mean making fundamental changes to operations, and these business transformations have tax consequences. Remind your business leaders that sustainability-related supply chain changes will require consideration of intellectual property (IP) ownership, transfer pricing, VAT, and customs impacts.
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"We're one of the only functions that looks right across the business and sees the whole picture. Many business counterparts will be focused on individual KPIs which they're targeted on. Whereas what we see, are all those different businesses from KPI positions to the bottom line, including capital. Often, our vantage point means we are the first to be aware of issues which others may have overlooked."
Jon Priestnall
Group Tax Director, Aviva
Transform the tax operating model
Sustainability will place significant new demands on talent in the tax and finance function and require skills in everything from indirect and transfer taxes to assessing the impact of new carbon-reducing technologies, modelling potential scenarios, and analysing government policies.
Agree Tax ESG goals and responsibilities
Tax leaders should clearly establish who is responsible and accountable for ESG tax matters — which can range from plastic packaging taxes to minimum wage issues — and ensure that they have the right level of oversight in areas where they don’t have day-to-day control.
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"With sustainability, especially in tax, there are lots of things to be considered. So, this is an example of how tax and finance, globally and locally, can be involved in such an important project where we shape the market in the future—and have the ability to make a substantial and certain impact."
Jian Teng
Executive Finance Director, Gilead China
Taking tax to the next level
Through our survey we found that while many tax leaders feel they are on top of sustainability goals for the moment, others suggest specialist advisory support 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.
