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2024 | OriginalPaper | Buchkapitel

Environmental Taxation and ESG: Silent Partners

verfasst von : Janet E. Milne

Erschienen in: Sustainable Finances and the Law

Verlag: Springer Nature Switzerland

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Abstract

Environmental, social and governance (ESG) perspectives have rapidly gathered speed and global reach over the past several years. Although often motivated by the desire to improve investor decision-making, ESG perspectives can also represent a broader ethic and understanding of the need for societal changes. This chapter focuses on the “E,” or environmental, pillar of ESG. It explores the relationship between environmental taxation and the ESG environmental pillar. In working toward environmental protection, both share common characteristics. As environmental protection policies, they operate alongside but outside of traditional, environmental command-and-control regulations. They both send a strong educational signal that can influence behaviour in environmentally positive ways. At the same time, they play very different but symbiotic roles. For example, environmental taxation instruments that effectively change behaviour allow the private sector to show more positive results when they disclose ESG data on a voluntary or compulsory basis. Conversely, ESG programs may help policymakers develop stronger environmental taxation policies and build support for market-based environmental protection instruments. Drawing on selected current ESG developments in the United States and European Union, the chapter presents the relationship between environmental taxation and ESG as a silent partnership. The public ESG spotlight often places disclosures centre front, but the more nuanced relationship between environmental taxation and ESG principles works quietly in the background. The chapter considers how this potential relationship—the silent partnership—may have the capacity to improve environmental protection.

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Vorheriges Kapitel Government Procurement and Sustainable Development in the WTO

Nächstes Kapitel International Fiscal Cooperation to Better Integrate Public and Private Efforts on Sustainability: The Case of Carbon Offset Credits

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See, e.g., OECD (1989).

See generally Milne and Andersen (2012), pp. 15–29.

See, e.g., Krupnik and Parry (2012), pp. 1–21. Other taxes on fossil fuels, such as taxes on gasoline, can operate as implicit carbon taxes. The tax rate is not explicitly calibrated to the greenhouse gas emissions, but fuel taxes increase the cost of fossil fuels, and their tax rate can be translated into the cost per tonne of CO2-e emissions. See generally OECD (2021a).

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Id. at 2 (internal footnotes omitted). The “environment more broadly” is defined as “air and water pollution, resource depletion, and biodiversity loss”. Id. at 2 n. 7.

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Id. paragraphs 8–14, 23–25.

Id. paragraph 7, 23.

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Securities and Exchange Commission, The Enhancement and Standardization of Climate-Related Disclosures for Investors, 87 Federal Register 21334, 21373-81 (April 11, 2022). The proposed rule exempts small companies. Id. at 21390.

Id. at 21382–21383.

Securities and Exchange Commission, Enhanced Disclosure by Certain Investment Advisors and Investment Companies About Environmental, Social, and Governance Investment Practices, 87 Federal Register 36654, 36661 (June 17, 2022). The notice of the proposed rule requests comment on whether to require quantitative information about emissions and possible emissions metrics. Note that the proposed rule also details where and when the disclosures are made within the array of SEC filings, which is a topic that is not discussed in this chapter, information about emissions, and possible emissions metrics. The proposed rule also details where and when the disclosures are made within the array of SEC filings which is also a topic that is not discussed in this chapter. Id.

Id.

Id. at 36676–36679. The proposal treats Impact Funds as a subset of ESG-Focused Funds. Id. at 36662.

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An unanticipated, abrupt change in carbon pricing could significantly affect the financial markets’ carbon-intensive industries that might be left with stranded assets in the transition to a low-carbon economy, but the transition to greener technologies can also generate “creative disruption”. OECD (2020), pp. 46–47.

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100

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101

102

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103

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104

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105

A full analysis would also inquire into the compatibility with World Trade Organization rules.

106

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107

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Titel: Environmental Taxation and ESG: Silent Partners
verfasst von: Janet E. Milne
Verlag: Springer Nature Switzerland
Buch: Sustainable Finances and the Law
Print ISBN: 978-3-031-49459-8

Electronic ISBN: 978-3-031-49460-4

Copyright-Jahr: 2024
DOI: https://doi.org/10.1007/978-3-031-49460-4_11