New Index Available to Test Corporate Performance on Tax Responsibility and Transparency
The tool, developed by CSR Europe and Fair Tax Foundation in collaboration with pioneering companies Enel, Fortum, Grundfos, Orsted and Vattenfall, benchmarks corporate performance in five key areas of tax conduct.
On 19 April, CSR Europe and Fair Tax Foundation released the Tax Responsibility and Transparency Index before stakeholders from the European institutions, businesses, investors, and civil society organisations, who gathered at the European Parliament in Brussels for the launch event co-hosted by MEP Paul Tang.
The Index offers concrete support to businesses interested in advancing a responsible and transparent tax behaviour. Participating companies can benchmark themselves against an anonymous leadership cohort to understand how current practices and disclosures efforts in the following five areas compare to their peers:
Policy and strategy
Management and governance
Stakeholders and engagement
Transparency and reporting
Contribution and narrative
Comparison will be available against all participants, as well as ‘by sector’ and ‘by country’.
Furthermore, the criteria included build upon existing best practices such as the public Country-by-Country Reporting recommendations of GRI 207, questions on current tax reconciliation disclosure from the Fair Tax Mark, and guidance from the United Nations Principles for Responsible Investment, and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.
Uniquely, the Index also considers and rates activities such as:
Commitment to the spirit as well as the letter of the law
Supply chain conduct
Public policy and lobbying
Involvement in tax controversies
Public country-by-country reporting of not just corporation tax, but all taxes paid
Multinational businesses opting to be assessed against the Index’s detailed requirements will be awarded an overall score (out a possible 100), with feedback provided by way of an itemised scorecard.
The Index has been developed by CSR Europe and Fair Tax Foundation together with pioneering multinational companies, including Enel Group, Fortum, GRUNDFOS, Ørsted and Vattenfall, after 12 months of extensive consultation with businesses, investors, and civil society.
“We believe that tax should be considered a core element of the sustainability agenda and the overall ESG practices of companies. Civil society, investors, and most importantly policymakers, are demanding companies to enhance their tax transparency and ensure compliance within bounds of legal and moral frameworks by paying their fair share of taxes in every geographical location they operate. This tool will enable companies to understand the current expectations and requirements from legal and voluntary initiatives in tax transparency and responsible tax conduct”, said Spyros Perikleous, senior project manager at CSR Europe.
The launch event saw the participation of distinguished speakers like Paul Tang, Member of the European Parliament, Benjamin Angel, Director of DG TAXUD at the European Commission, Chiara Putaturo, EU Inequality and Tax Policy Advisor at Oxfam EU, Sebastien Akbik, Corporate Governance Analyst at PRI, Sarah Filbee, Head of Tax at Jupiter Asset Management, Alessandro Bucchieri, Head of Tax Affairs at Enel, Paul Monaghan, Chief Executive at Fair Tax Foundation, Reijo Salo, Vice President of Corporate Tax at Fortum, Christian Hjort, Senior Lead Tax Counsel at Ørsted, and Anders Tegelberg, Head of Tax at Vattenfall.
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