Sustainability: How does tax play a role?

#CarbonPricing impacts #Business #Sustainability Key Takeaways:

Carbon pricing schemes are accelerating globally.
EU's CBAM introduces carbon border tariffs.
Compliance with EU directives requires strategic ESG reporting.

Further Insights

Global Trends: Government and supranational organizations worldwide are implementing measures to meet ambitious carbon reduction targets through carbon pricing schemes, incentives, and protectionist policies like tariffs.
Carbon Markets: Over 70 carbon pricing schemes exist across nearly 50 countries, with major systems in China and the EU. The EU plans to assist other countries in establishing similar markets. Nigeria and Taiwan are also adopting carbon market initiatives.
EU CBAM: The EU's Carbon Border Adjustment Mechanism, part of its Fit for 55 agenda, aims to prevent carbon leakage by imposing tariffs on imports from less stringent carbon regimes. The first reporting deadline was in January, with technical challenges leading to potential deadline extensions.
EU CSRD: The EU Corporate Sustainability Reporting Directive mandates that listed companies report on social and environmental issues starting in 2025, with sector-specific standards to follow in 2026. This includes a broad range of disclosure items concerning the company's impact on sustainability.

Closing Thoughts: How prepared are businesses to navigate the shifting landscape of ESG compliance, and what strategies can they employ to leverage these changes for sustainability leadership?