There is a very useful article by Sasja Beslik, the head of sustainable finance at Nordea Bank in the Guardian this morning. I make no apology for quoting at length on this occasion. The importance of having a banker say these things justifies it:
[M]uch of modern global capitalism is built on the short term. CEOs are around for a few years and they just need to show shareholders what a great job they have done. They’re generally not thinking about what’s going to happen to the company 10 or 20 years later.
This means that only a few, enlightened, companies truly understand the need to pay a fair amount of tax everywhere they trade.
Global tax regulation would be the perfect solution for this but, realistically, it just isn’t going to happen anytime soon. By the time the international community agrees any regulations business will have moved on and the regulations will be out of date.
And yet there is one way that things can change quickly. Individual governments can make it a condition of market entry that multinational corporations publish how much money they make and how much tax they pay in every jurisdiction they operate in. Companies would have a choice, deny themselves a market presence or be transparent about how much tax they pay globally.
Companies don’t want to lose their competitive edge by being the only ones to put their tax information out there. They welcome transparency regulation as a way to make sure everyone acts responsibly. Tax transparency is an opportunity to strengthen corporate brands and demonstrate how corporations contribute to the societies they are a part of.
As investors, consumers and citizens we all have a part to play in making this happen. It is time for us to actively engage with the companies whose existence we make possible. We are the ones that can push, cajole and drive the improvements on when and where tax is paid by them. It is the right thing for us to focus on and we can make a difference.
The time for country-by-country reporting is coming when investors are making the case.