Tax ESG Insights

ESG is now a chief measure of corporate behavior, with tax playing a key part due to its linkages to environmental, societal, and governance benefits. Tax departments are being challenged to adjust tax strategies and affairs, and to ramp up reporting processes to address transparency demands, demonstrate commitment to a sustainable approach to tax, and take advantage of green tax incentives.

Are you prepared to tell your tax ESG story?

In recent years we have witnessed a sea change in the corporate world, reevaluating the balance of purpose and profit through the lens of sustainability and corporate responsibility. Across industries, companies are taking a hard look at the effects of their people, their customers, their investors, and society in general to better meet sustainability and transparency objectives.

The future belongs to the bold

There are various phases to mark your tax and ESG path. Your tax journey requires:

Planning

Developing and documenting a tax strategy and formulating an operating model

Preparation

Deploying reporting and measurement targets and controls

Persistence

Reviewing, reassessing, and executing on tax ESG risks and opportunities

Tax & ESG resources

Effectively telling your tax story and achieving your ESG objectives involves oversight across key areas:

General
Tax transparency
Decarbonization and renewables
Credits and incentives
Sustainable supply chain

General

When it comes to ESG, tax is both a driver of sustainability and a key measure of it. Explore the role of tax in a company's overall ESG initiatives. Learn how to utilize the role of tax to enhance trust, mitigate risk, and unlock new value as your organization builds a sustainable future.

CTO Insights -ESG (May 2021)

The Evolving Role of Tax and ESG

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Convergence of Tax and ESG (June 2021)

External Article (Persepcives on Tax Law & Policy)

ESG, OMG -- The Intersection of Tax and the ESG Movement

Inside International Tax, Episode 10-2021

Harnessing the Power of ESG series

Main page of the ESG Tax podcast

The Intersection of Tax & ESG

Harnessing the Power of ESG episode

The Role of Tax Strategy in Supporting Corporate ESG Initiatives

Harnessing the Power of ESG episode

Tax Governance and Controls

Harnessing the Power of ESG episode

The evolving role of tax and ESG

Tax Matters for the CFO

Additional resources

ESG Factors: Tax is Also in the Spotlight

January 2023

The ESG landscape includes a complex and evolving set of standards, but what are these standards exactly and why are they important?

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M&A: Incorporating ESG Tax in the Investment Process

August 23, 2021

Key considerations for investors as they evaluate how to incorporate ESG principles into both private and public investments | KPMG International

Ten Things Institutional Investors Need To Know When Seeking To Invest in Private Equity

August 17, 2021

ESG investing is not viewed uniformly by investors and consistent measurement is evolving | KPMG International

Tax transparency

A growing number of multinational enterprises are responding to stakeholder calls for increased tax transparency by voluntarily disclosing information about their tax strategy, governance, and global tax payments. KPMG can provide guidance, insights, and tech-enabled Tax ESG services to help develop a data-informed approach as you begin this journey.

Additional resources

KPMG Tax Transparency Services

Whether your organization follows a path of greater tax transparency or not, it is important to make that decision in a strategic and informed way. KPMG tech-enabled Tax ESG services can help our clients develop a data-informed approach as they begin this journey.

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KPMG Tax Transparency Services - Impact Services

Impact Services can help your company throughout the entire reporting process, from pulling the data to producing a final report, all while helping you navigate this ever-evolving landscape at the same time.

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Who’s On First, What’s On Second: How Can Companies Score on ESG Reporting?

March 2023

In this report, we look into how everyone wants to know who is managing ESG and what falls within their purview. And with mandated ESG reporting on the horizon, 'I don’t know' is no longer a viable response.

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Bringing Tax Transparency Into Focus – Extractive Industries

July 2022

Tax transparency is set to become an integral part of Environmental, Social & Governmental disclosures. Make sure you’re ready.

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Tax and ESG – The View of Investors

June 22, 2022

The ESG agenda is top of mind for many companies and investors and tax reporting is one area that can serve to bring ESG practice to life. This report from KPMG International focuses on how to arrive at tax metrics to support ESG goals that could gain wider buy-in.

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Decarbonization and renewables

Due to the ever-growing attention on the impacts of climate change and energy consumption, it is crucial to understand the broad environmental impacts of your business and have a plan for meeting global decarbonization and renewable energy targets, as well as stakeholder expectations. The Tax function can deliver significant value to your organization’s ESG strategy. It is critical to identify ways to structure, fund, and comply with your operating, reporting, and compliance obligations to help realize these ESG ambitions.

Additional resources

Assessing the Impact of the EU's CBAM on U.S. Businesses

Carbon Border Adjustment Mechanism (CBAM) reforms could significantly impact global exporters throughout the supply chain. Learn more about how U.S. businesses must begin to prepare climate risk management strategies.

Intercompany Fees for Internal Carbon Pricing: The Next Frontier?

In this article, the authors explain how companies are measuring internal carbon pricing (ICP) and suggest how transfer pricing practitioners can support ICP and the associated allocations of intercompany carbon fees. | February 13, 2023 - Tax Notes International

Section 45Q Credit for Carbon Oxide Sequestration

Inflation Reduction Act Changes the Game for Energy Transformation

March 2023

Article from Plugged In Magazine, published by KPMG International, that examines the energy-related tax provisions in the IRA and the role of energy organization in combating climate change transformation

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Simplified Investor Accounting for Tax Equity Investments

March 2023

FASB issues final ASU that expands use of the proportional amortization method to additional tax equity investments.

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Future of Tax - podcast

December 15, 2022

Using taxation to pursue decarbonization.

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Business Consequences of Tax Driving Net Zero Ambitions

July 2022

If tax is used as a lever to drive decarbonization, what might the consequences be? This publication looks at some of the measures which governments might introduce — in particular tax related ones — and the potential impact on business.

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Credits and incentives

Most countries offer financial incentive programs designed to stimulate activities such as research and development, investment spend, job creation, and sustainability efforts. In order to generate and monetize these benefits, it is important for your organization to identify, understand, and prioritize the appropriate incentives given your financial and strategic goals. KPMG insights and Tax ESG services can help you to design and implement an effective incentives strategy given your business’s needs.

Additional resources

Summary of Credit Provisions in the Inflation Reduction Act

December 2022

Clean Energy Tax Incentives for Tax-Exempt and Governmental Entities

Many tax-exempt organizations and certain government entities may now benefit from the clean energy tax incentives of the Inflation Reduction Act, enacted into law on August 16, 2022.

IRA and CHIPS: Tax Considerations

November 2022

Financial Reporting View: KPMG impressions on the accounting for key provisions in these recently enacted tax laws

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Analysis and observations: Tax law changes in the “Inflation Reduction Act of 2022”

August 16, 2022

President signs budget reconciliation legislation. Read pages 33-61 of the KPMG report on tax law changes for insights on climate and renewables related tax measures.

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Sustainable supply chain

The supply chain brings to life the ethical and sustainable vision of a business. Supply chains and procurement are only as resilient as their weakest link. KPMG Tax ESG connected service offerings and digitally enabled solutions can help assess your supply chain, identify risks in your supply chain (e.g., transfer pricing, trade and customs, and indirect tax issues), embed required governance, and responsibly capture the value created with your ESG efforts.