Connect with us

Features

Responsible investment can help crack down on tax avoidance

Published

on

This week, two corporate giants, Amazon and HSBC, hold their AGMs and although the worlds of the internet and investment may be very different, their shareholders are raising the same concern: that aggressive tax avoidance strategies may be hurting the long-term value of the company.

Amazon has been criticised for paying only £2.4m in UK corporation tax, despite making £4.2 billion in sales. Meanwhile, research by MSCI has shown that HSBC has a higher proportion of its subsidiaries in tax havens than any other UK bank.

The reaction in the UK has generally been one of moral outrage. In March, a survey by Christian Aid found that two in three people think such tax avoidance is “morally wrong”. Margaret Hodge, the chair of parliament’s public accounts committee, commented last week that such behaviour on tax is “devious, calculated and, in my view, unethical“.

With tax avoidance being painted in such ethical terms, the way the UK’s responsible investment community has reacted to the issue tells us a lot about how the sector has evolved in recent years.

A decade ago, the loudest calls on such an issue would have been for ethical funds to screen these companies out.  However, as far as I’m aware, there are no funds offering an ethical screen to ‘avoid tax avoiders’.

As Mark Hoskin, a partner at leading financial advisory firm Holden & Partners commented to me, that is probably because the morals of tax avoidance are not so clearcut: “This is a very complicated issue because all individuals and companies seek to minimise the tax according to the rules in place.

Minimising your tax position within the rules might be considered good corporate governance because it is driving up returns to shareholders.

I’m not sure you could put an ethical screen in which would in effect ask companies to structure their business to pay more tax – it does not make financial sense.”

So instead of embargo, there is engagement. Responsible investors are choosing an active ownership approach, where they try to use their influence as shareholders to change the companies’ behaviour.

For example, HSBC has been targeted by NGO ShareAction to have the issue of tax raised at its AGM on Friday. Tanya Pein, a specialist in ethical investment at In2 Consulting and co-chair of the Ethical Investment Association, recently said to me, “While clients are raising corporate tax avoidance as a major ethical concern, sustainable and responsible investment (SRI) funds have not yet publicised how they are voting on this issue, or how they are engaging with their investees privately.

So, I pass on client concerns to fund managers, and advise concerned investors to follow the growing initiative through the ShareAction website.”

Other responsible investors, particularly in the institutional investment community, are exploring the business case for acting on the issue. They argue that the negative issues that arise from tax avoidance – like reputational damage, or fees, fines and retrospective charges from watchdogs – influence their risk management.

Such investors are bringing pressure to bear on specialist index providers such as FTSE4Good to consider tax avoidance strategies as one of the criteria on which they judge the sustainability performance of companies.

That approach is another indicator of modern responsible investment – looking at the materiality of the issue, not the morality of it.

In truth, the jury is out on whether this modern responsible investment approach will actually change the behaviour of tax avoiding companies.

As Mark Hoskin concludes, “There is a lot of noise about companies paying more tax but they are simply playing by the rules. It is up to governments to work out a fair way of collecting tax.

The truth may be that with the rise of internet businesses governments have not yet worked out how to change the tax system to catch these businesses which can be based anywhere in the world.”

Responsible investment can help, but those determined to take a stand on tax avoidance may be better served by contacting their MP rather than their financial adviser.

Elliot Frankal is director of ESG Communications, a PR firm specialising in responsible investment for retail and institutional investors.

Further reading:

Google, Amazon, etc: blame tax laws, not the taxman or taxpayer

Corporations and tax avoidance: the time is right for investors to push for change

Charities used in offshore tax avoidance scam

Aggressive tax avoidance keeps on hitting the headlines

MPs deem global companies’ tax avoidance as ‘an insult to British businesses’

Economy

How Going Green Can Save A Company Money

Published

on

going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

Continue Reading

Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

Published

on

By

sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

Continue Reading
Advertisement

Facebook

Trending