Indian Businesses Embrace Tax Transparency in ESG Drive

PwC Survey Reveals Growing Commitment to Responsible Practices, Net-Zero Ambitions

Nearly half of Indian businesses plan to prioritize tax transparency in their environmental, social, and governance (ESG) practices, reflecting a significant shift towards responsible corporate behavior and stakeholder trust, according to a new survey by PwC India.

The “Tax Transparency in ESG: Insights into Indian Businesses and their Sustainable Practices” survey, conducted between April and July 2023, reveals key findings highlighting the growing importance of tax transparency in India’s business landscape:

  • 50% of respondents have made net-zero commitments, with 48% aiming to achieve it by 2030, indicating a sense of urgency and ambition in tackling climate change.
  • 48% of businesses plan to voluntarily disclose their total tax contribution (TTC) in the next three years, demonstrating the significance of tax transparency in responsible behavior and sustainable development.
  • 47% of respondents believe a reputation for responsible tax behaviour is the primary driver for tax transparency, followed by improvement in ESG profile and score (44%).
  • 75% of businesses currently do not publish Tax Transparency Reports (TTRs), revealing a gap in implementation despite growing recognition of its importance.
  • 93% of respondents believe tax incentives are relevant/very relevant for adopting ESG practices, with preferences for incentives towards environmental preservation (86%), inclusion and diversity (54%), and addressing social vulnerability (37%).

Sambitosh Mohapatra, ESG Leader at PwC India, noted the intrinsic link between tax transparency and ESG principles, stating, “Indian businesses are recognizing the importance of integrating tax considerations into their sustainability strategies, demonstrating a commitment to responsible corporate conduct and societal contribution.”

The report also emphasizes the need for policy interventions to incentivize ESG practices, such as green taxes and incentives, to support businesses in achieving their decarbonization goals and addressing socio-economic concerns.