Green taxes are meant to be only temporary, according to a leading sustainability tax expert. Alenka Turnsek, EMEIA sustainability tax leader with business services firm EY, made the comments at a conference on taxation hosted by London Business School. Turnsek said: “We always say to tax directors: green taxes are not there to be paid indefinitely,” she said .
“Green taxes can be seen as a recognition of externalities triggered by a company’s activities—think about waste and pollution, for example.
“By addressing these externalities and—by default—reducing and eventually eliminating your green taxes bill, the result is positive for your company, society and the environment.”
Well, that makes sense. It’s just that heads of tax departments across the world might be asking: how long is “not…indefinitely”?
Environmental campaigners, on the other hand—and given the current wave of broiling temperatures around the world—might hope indefinitely lasts a bit longer yet.
An honest day’s work
Over to the vexing question of whether CEOs should receive some of their vast pay based on ethical performance. That was one of the questions in a recent Institute of Business Ethics (IBE) survey, which found 68% of those polled thought it was either “very important” or “important”.
Can’t blame them for thinking that, but Prof Chris Cowton, ethics sage at the IBE, says the findings raise some big questions: how can ethical performance be defined and measured? How much of a CEO’s stupendously large pay packet should be fattened (or slimmed) by an ethics component? Should there be a level at which an “ethics bonus” would be cast aside, forgotten and otherwise consigned to the corporate bin of payday blunders?
Cowton writes: “One final thought: if it makes sense for your CEO’s pay to be related to the ethical performance of the organisation, what about the idea that your own pay should reflect your ethical performance? Or do you not need any incentive to do the right thing?
“And if you don’t, why should the CEO?”
Hand on heart, Board Agenda can honestly say our workplace record is without blemish. Just never been paid for it. Which is kind of the point—isn’t it?
Celebrations just a couple of weeks ago when the International Sustainability Standards Board (ISSB), sister body to the International Accounting Standards Board (who comes up with these names?), launched its first two standards meant to help companies help save the world.
Not everyone believes they’re a success. Nathan de Arriba-Sellier, research director at the Yale Initiative on Sustainable Finance, argues they’ve aimed only at “low hanging” reporting “fruits” and will likely fail to become the global baseline for corporate sustainability reporting.
He argues Europe, through the Corporate Sustainability Reporting Directive (CSRD) already plans to go further for EU companies because it uses the “double materiality” principle—companies must report how their activities damage their own future and the environment’s; plus the ISSB provides a bit of an escape clause by saying companies should report on information that is available “without undue cost or effort”.
De Arriba-Sellier painfully concludes that the “ISSB does not deliver on its core promise to provide a high-quality, reliable and comparably sustainability information meeting the needs of investors and the public. It is also highly unlikely that it will create a global baseline for disclosure requirements as both the SEC [the US standard setter and watchdog] and CSRD have adopted vastly different orientations at odds in their own ways with the ISSB’s.” Ouch!
A whole new world
OK, we all love a Disney tale, don’t we? Well, here’s one, though there’s no catchy tunes and the happy ending is one for the suits rather than the kids.
US legal eagle Cydney Posner reports on the outcome of the Simeone v. Walt Disney Corp case in a Delaware Court. The plaintiff, Kenneth Simeone, a stockholder, had made a request to see the company’s “books and records”, claiming it had breached its fiduciary duty when it spoke out against Florida’s “Don’t say gay” laws.
Now, Posner’s is a long, winding tale but—to cut a yawn story short—the judge said Simeone couldn’t have his “books and records” claim because, under Delaware law, “directors have ‘significant discretion to guide corporate strategy—including on social and political issues’”.
In other words, it’s OK for boards to be “woke”. In a country currently tying itself in knots over what is and isn’t “woke” corporate governance, that’s quite the ruling.
Posner writes: “Significantly, the Court also concluded that the interests of corporate stakeholders—non-stockholders—may be taken into account when the board determines that those interests are ‘rationally related’ to building long-term stockholder value.”
Sounds like a rude “awokening” for those on the Right of US politics. (See what I did there?)