Partner at Kreston Rangamani and Associates LLP, Global Tax Group Regional Director, Asia Pacific
Ganesh has extensive experience of more than 30 years in providing specialist tax services, particularly to large privately owned groups, with particular strengths in the property, retail, healthcare and hospitality industries. He has supported various entities with specialist advice on tax-effective structures and restructures, cross-border transactions on account of outbound and inbound India investments, mergers, acquisitions and divestments. Ganesh has also worked with stakeholders across businesses to deliver solutions such as tax due diligence, tax consolidation and restructuring of large family businesses in the Middle East, Asia, and Singapore.
Ganesh Ramaswamy featured in International Accountant Magazine
November 8, 2022
ESG policy impact on tax
Ganesh Ramaswamy from Kreston Rangamani was recently commissioned to write an article for International Accountant magazine on the impact of ESG on tax. Ganesh considers the pressures from stakeholders on businesses to have an ESG policy and how BEPS and transfer pricing could cause issues without a robust tax strategy.
Funding ESG policy changes
Environmental, social, and governance (ESG) aspects have been widely discussed worldwide, with recent increased focus due to climate change, broken supply chains, and the Covid-19 pandemic, increasing the pressure on businesses to take more sustainable action. In addition to stakeholder pressure, there are mechanisms such as sustainability loans and bonds to help fund changes to business operations
Creating value from ESG policy
Sustainability has become one of the crucial deciding factors when it comes to investors’ decision-making. Stakeholders are interested in external factors, while employees expect equality, fair working conditions, and environmental and social aspects. ESG policies that work effectively can help to attract and retain staff and be a platform for growth. There is also an increased focus on consumer trends, with an increased opportunity to explore new sustainability-focused emerging markets.
Supply chain risks
Sustainable alternatives must be considered in supply chains due to shortages caused by climate change. For example, the stock prices of corporate businesses risk falling due to the lack of transparency or support for sustainable measures.
Tax incentives for ESG policies
Tax incentives exist for businesses actively working on their ESG infrastructure. Many companies have committed to reducing carbon emissions, resulting in consideration of carbon taxes, impacting their tax profile overall. Governments, stockholders, employees, creditors, and customers are all stakeholders who require knowing that they are paying the correct tax, with an increased social interest in knowing if the ESG policy was chosen to secure tax concessions. It is a requirement for businesses to explain their tax policies; however, many are now reporting beyond the need on how their chosen tax strategies connect to their ESG policy. Many NMEs have begun to include several reports on tax formalities of their business as part of their ESG policy.
Read the full International Accountant article below;