Understanding ESG-related impacts on transfer pricing
Environmental, social, and governance (ESG) policies and the movement towards greater sustainability will continue to transform many businesses. As internal and external stakeholders focus on ESG policies, multinational companies (MNCs) are responding to these pressures by making ESG-related changes to the business.
Given the rapid emergence and broad scope of these initiatives, transfer pricing leaders in tax departments need to take steps to:
- Understand ESG-related changes to the business.
- Revisit their analyses into what creates value and drive business profits.
- Determine if modifications to their transfer pricing policies are needed.
Read this report to learn more about addressing ESG business changes step-by-step:
- Determine who is making ESG recommendations and establishing sustainability strategy
- Identify prospective changes in the business
- Assess the anticipated impact on business results
- Analyze the transfer pricing policies for ESG-related changes
- Update transfer pricing documentation
Dive into our thinking:
ESG and Transfer Pricing
While the breadth and depth of how and if companies embrace ESG varies significantly by industry and company, many companies are moving toward more sustainable business practices. Given this change, companies need to reevaluate the value drivers of their business to determine if they need to modify their transfer pricing policies.
Read moreRead the full article from which this report originated - May 2022.
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