You don’t need me to tell you that this has been quite a year. The impacts of the pandemic have ebbed and flowed, but it continues to have a massive impact around the world, shaping necessary government spending and corresponding taxes. The Global Responsible Tax Project has continued to grapple with this issue as well as issues surrounding ESG and the climate.
It’s still too soon to tell to what extent the 2021 UN Climate Change Conference (COP26) was a success. Whatever governments do or don’t do, I am optimistic about the collective willingness to act. More and more people in the business world and beyond are directing expertise, energy and attention to climate change, taking action through policy, technology and behaviour. There is a long way to go, but the business focus is on meeting net-zero targets as soon as possible and that is surely a good thing.
In this, we are going to have to start counting carbon just as we have counted cash flow. And we are going to have to be thoughtful in ensuring carbon is properly accounted for. That’s why we have focused our Responsible Tax roundtables this past year on Carbon Border Adjustment Mechanism ideas, and we will keep working on tax and climate in 2022 and beyond.
This speaks to the wider ESG agenda of which tax is a big part of the necessary global infrastructure. We’ve run a number of roundtables on ESG metrics with the B Team. More are planned for 2022, looking at the relevant tax metrics with investors and ESG ratings experts. As ever, we always go back to the insight that any metrics can only be a proxy for trust; data is necessary, but it has to be combined with purpose and behaviour if trust is to be won and kept.
This idea came through too with our Great Tax Climate Debate virtual event. Over 1000 of you attended and while no one thinks tax is the only way to do global good – it’s clearly one of the most important – if not the most important lever. If you missed the debate, you can still register to access the replay. Email email@example.com for details. We will release a thought leadership piece on this topic in early 2022.
We recently did some interviews with some of you about what you think of the Global Responsible Tax Project – the essence of the feedback was that you value the work but want to know more about our plans and the goals, and you want to feel a part of this community. We will share more in January and February about plans going forward, and we will look to help more of you engage in the project – in ways that work for you. For now, I can say that we will concentrate on supporting our people, clients and broader stakeholders to deliver on the ESG agenda in pursuit of a better society for all. While the focus on corporate taxes will remain and we will continue to focus on climate, we are also going to broaden our scope by looking at the relationship between tax and the world of work and tax and gender.
For now, I send my sincerest wishes for the season, and hope that you, your colleagues and loved ones stay safe and enjoy the season. We look forward to continuing to connect with you in 2022.
Global Head of Tax & Legal Services, KPMG