<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Taxes have become an issue of corporate social responsibility (CSR), but the role of taxation is to some extent an ambiguous and controversial issue in the CSR framework. Similarly, another unclear question is what role investors who are committed to sustainable and responsible investment (SRI) see taxes as having on their environmental, social, and governance (ESG) agenda. Corporate taxes have an inverse relationship with the return of the investors: taxes paid directly affect what is left on the bottom line, reducing the return of investors. However, investors are now more aware of tax-related risks, which can include different forms of reputation risk. Corporate tax planning may increase the returns, but those increased returns are riskier. This study focuses particularly on the relationship between SRI and taxation. We find that tax matters are considered to be on the ESG agenda, but their role and significance in the ESG analysis is unclear.</p></abstract>

Taxes have become an issue of corporate social responsibility (CSR), but the role of taxation is to some extent an ambiguous and controversial issue in the CSR framework. Similarly, another unclear question is what role investors who are committed to sustainable and responsible investment (SRI) see taxes as having on their environmental, social, and governance (ESG) agenda. Corporate taxes have an inverse relationship with the return of the investors: taxes paid directly affect what is left on the bottom line, reducing the return of investors. However, investors are now more aware of tax-related risks, which can include different forms of reputation risk. Corporate tax planning may increase the returns, but those increased returns are riskier. This study focuses particularly on the relationship between SRI and taxation. We find that tax matters are considered to be on the ESG agenda, but their role and significance in the ESG analysis is unclear.

Responsible Investment: Taxes and Paradoxes

Nordic Tax Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Responsible Investment: Taxes and Paradoxes"}

Taxes have become an issue of corporate social responsibility (CSR), but the role of taxation is to some extent an ambiguous and controversial issue in the CSR...

Responsible Investment: Taxes and Paradoxes

Article Category: Article

Published Online: Dec 13, 2017

Page range: 135 - 150

Received: Jun 01, 2017

Accepted: Oct 30, 2017

DOI: https://doi.org/10.1515/ntaxj-2017-0010

Keywords
corporate taxes, sustainable and responsible investment (SRI), ESG, corporate social responsibility (CSR), aggressive tax planning, corporate governance

© 2017 R. Knuutinen and M. Pietiläinen

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Responsible Investment: Taxes and Paradoxes

Article Category: Article

Published Online: Dec 13, 2017

Page range: 135 - 150

Received: Jun 01, 2017

Accepted: Oct 30, 2017

DOI: https://doi.org/10.1515/ntaxj-2017-0010

Keywordscorporate taxes, sustainable and responsible investment (SRI), ESG, corporate social responsibility (CSR), aggressive tax planning, corporate governance

© 2017 R. Knuutinen and M. Pietiläinen

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
corporate taxes, sustainable and responsible investment (SRI), ESG, corporate social responsibility (CSR), aggressive tax planning, corporate governance