TAX & CR

21 June 2012

Sune Skadegaard Thorsen

GLOBAL CSR

sst@global-csr.com

www.global-csr.com

www.learnCSR.com

www.MorgendagensVirskomheder.dk

•

What is CR / CSR?

Social Sustainability Environmental Sustainability Economic

Sustainability People Planet

Profit

CR and the Triple Bottom Line

CSR is how corporations take responsibility

for

contributingwhile not becoming a

barrier

to

sustainable social,

environmental and

economic development

What is CR / CSR / Corporate Sustainability / Corporate Citizenship - the concept

10 Internationally Recognised Principles for Corporate Responsibility

1. Support and respect the protection of internationally proclaimed human rights

2. Make sure that you are not complicit in human rights abuses

3. Uphold the freedom of association and the effective recognition of the right to collective bargaining

4. Uphold the elimination of all forms of forced and compulsory labour

5. Uphold the effective abolition of child labour

6. Uphold the elimination of discrimination in respect of employment and occupation

1. Support and respect the protection of internationally proclaimed human rights

2. Make sure that you are not complicit in human rights abuses

3. Uphold the freedom of association and the effective recognition of the right to collective bargaining

4. Uphold the elimination of all forms of forced and compulsory labour

5. Uphold the effective abolition of child labour

6. Uphold the elimination of discrimination in respect of employment and occupation

7. Support a precautionary approach to environmental challenges

8. Undertake initiatives to promote greater environmental responsibility

9. Encourage the development and diffusion of environmentally friendly technologies

10. Work against all forms of corruption in all its forms, including extortion and bribery

Ec. Sust.

Env. Sust.

Soc. Sust.

Corporate Social Responsibility

(People) (Planet) (Profit) Social Sust. Environmental S. Economic Sust.

…

The International Bill of Human RightsIncluding the International Labour Organisation’s Declaration on Fundamental Labour Rights

…

Kyoto Protokol

Johannesburg Action Plan

Rio Declaration

The UN Biodiversity Convention

…

Taxes

Anti-trust

UN Anti-Corruption Convention

International Accounting/Audi-ting Standards

The Core International Principles for sustainable development in the UNGC

Tax: a CR Issue?

NO!

Q: Why not?

A: Taxes are regulated by law and therefore not CR (which is voluntary).

A: Taxes are just another cost. Costs are not considered CR!

Tax: a CR Issue?

Qualifier – impacts on society

Q: Are corporate payments of taxes important for sustainable development?

A: With global market economies payment of corporate taxes is crucial to the economic sustainability of any Country.

It is essential to the development of sustainable economies in emerging markets.

Tax: a CR Issue?

Core CR vs. non-core CR

Q: Did we establish internationally agreed norms for this impact on economic sustainability?

A: No internationally (UN) agreed norms for payments of taxes non-core CR

p

Core principles addressed

6 on

Human Rights

3 on

Environ-ment

1 on

Corrup-tion

Other Risks & Opportunities

UN Global Compact

Cradle to

cradle

Biodiversty

Climate

Animal welfare

De-forestation

Fraud

Taxes

Traditional Corp. Gov.

issues

Profit - Accounting

Money-laundering

Anti-trust

Stakeholder engagement

Employee welfare

Donations Sponsorships

MDGs

GMOs

Poverty

Lobbying

Supply Chain Management

Community involvement

Internal review

Country Risk Analyses

Impact Assessments

Due diligence

Investments

Lean processes

Quality

Accountability

Mediation

Compliance

Human Resources

ProcurementPartnerships

Whistle-blower

Marketing & PR

SalesTraining

Issues ManagementReporting

Research & Development

Communication Branding

Production

Corporate governance

Corporate Strategy

Balanced Scorecard

General Management

Corporate Operations

Taxes

Tax becoming a part of the CSR agenda – EU Developments

• CSR definition - October 2011 EU CSR communiqué:

“the responsibility of enterprises for their impact on society”

• The EU has issued many documents on good tax governance

OECD, examples:

The Global Forum on Transparency and Exchange of Information for Tax Purposes

The Centre for Tax Policy and Administration

Guidelines for Multinational Enterprises

Transfer Pricing Guidelines

OECD Model Tax Convention

Tax becoming a part of the CSR agenda – OECD Developments

Other actors are becoming more engaged

•Corporate Citizenship

•Action Aid

•Christian Aid

•Tax Justice Network

•KPMG

The business case for corporations to participate

1. Demonstrating leadership (provided that core CR issues are dealt

with diligently)

2. Participate in defining the core principles for tax payment

3. Creating a universal level playing field for a considerable cost (both

monetary, management time and human resources)

THANK YOU

Management principles for Corporate Responsibility on Tax

Session II

UN Guiding Principles; a possible governance system for responsible tax behaviour

UN Guiding Principles on Business

and Human Rights

unanimously adopted June 2011

Part of UN, OECD, IFC, EU CSR

policy frameworks

”The Guiding Principles is the

authoritative global reference

point for business and human

rights”

John Ruggie – June 2011

Moving from

”Naming and shaming”

To

”Knowing and showing”

Three Components of the Corporate Responsibility to Respect

POLICY COMMITMENT

PROCESS

Identification

Prevention

Mitigation

Accounting

REMEDIATION

Due Diligence Process

p

Core principles addressed

6 on

Human Rights

3 on

Environ-ment

1 on

Corrup-tion

Other Risks & Opportunities

UN Global Compact

Cradle to

cradle

Biodiversty

Climate

Animal welfare

De-forestation

Fraud

Taxes

Traditional Corp. Gov.

issues

Profit - Accounting

Money-laundering

Anti-trust

Stakeholder engagement

Employee welfare

Donations Sponsorships

MDGs

GMOs

Poverty

Lobbying

Supply Chain Management

Community involvement

Internal review

Country Risk Analyses

Impact Assessments

Due diligence

Investments

Lean processes

Quality

Accountability

Mediation

Compliance

Human Resources

ProcurementPartnerships

Whistle-blower

Marketing & PR

SalesTraining

Issues ManagementReporting

Research & Development

Communication Branding

Production

Corporate governance

Corporate Strategy

Balanced Scorecard

General Management

Corporate Operations

Core principles

6 on Human Rights 3 on Environment 1 on Corruption

UN Global Compact

Cradle to cradle

Biodiversty

Climate

Animal welfare

De-forestation Fraud

Taxes

Trad. Corp. Gov. Iss.

Profit - Accounting

Money-laundering

Anti-trust

Stakeholder eng.

Employee welfare

Donations/Sponsorships

MDGs

GMOs

Poverty

LobbyingSCM

Community inv.

Internal review

Risk Analyses Impact Assessments

Due diligence

InvestmentsLeanQuality Accountability

Mediation

Compliance

HR

Procurement

Partnerships

Whistle-blower

Marketing & PR Sales

Training

Issues Management

Reporting

R & D

Communication

Branding

Production

Corporate governance Corporate Strategy

Balanced Scorecard

General Management

People Planet Profit

Corporate Operations

Blue Ocean

REMEDIATIONDUE DILIGENCE PROCESS

POLICY COMMITMENT

THANK YOU