Two of Denmark’s labour-market pensions institutions have joined forces with an asset manager and an ESG engagement provider to press multinational companies to take a more responsible approach to tax.
In an announcement yesterday, Sampension said it was involved in a new engagement project around the issue in conjunction with several institutional investors and asset managers including pension fund PBU, Nordea Asset Management and C. L. Davids Foundation & Collection – a private foundation that owns an art museum in Copenhagen.
The project is being coordinated by Danish engagement company Engagement International, which Sampension said had conducted analysis showing that 24% of the 206 listed IT/tech companies in the MSCI World index on average had paid less than 15% of profits in tax for the past three years, “without a good explanation”.
The research showed 28% of the companies had paid no or limited corporation tax because they had a deficit in one or more of the years 2019, 2020 and 2021, Sampension said.
The pensions manager said that of the largest listed pharma, biotechnology, mining, oil and gas companies in the index, 17% had contributed less than 15% of their earnings in taxes over those three years.
Jacob Ehlerth Jørgensen, head of ESG at Sampension, said: “We attach great importance to the companies we invest in acting responsibly, which also applies in the area of taxation.”
Companies had to contribute to the society they were part of, he said.
“This applies both to paying a fair tax and, for example, not using structures that reduce tax in clear contradiction of the intentions of the law,” Ehlerth Jørgensen said, adding that it was also about firms being generally open about the tax they paid.
At PBU, the pension fund which covers early-childhood educators and other workers in Denmark, ESG chief Rasmus Juhl Pedersen said: ”While corporate tax has previously been regarded as primary a political and legal field, there is now a clear tendency for more and more international investors to view responsible tax payment as a new area of ESG in line with anti-corruption and bribery, for example.
“That means it’s more about responsible values and transparency than about black-and-white rules in tax legislation, which are acceptable as long as they are not outright illegal,” he said.
On behalf of the investors and asset managers, Engagement International is currently talking to 16 companies in the IT and tech, mining, oil and gas, pharma and biotechnology sectors, Sampension said.
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