Sector special: ‘Fair payment of tax is a key element of responsible investing’


In this series for the Fair Tax Foundation, our accredited organisations tell us how the Fair Tax Mark has helped open opportunities or overcome challenges specific to their sector. 

Here, Mike Head, Director of Ethical Investors and Andrew Harper, Executive Director and Chief Responsibility Officer at Epworth Investment Management, discuss demonstrating ESG and standing out from the crowd.

As we explored in our Sector special on building societies, financial services don’t have a great track record of building trust with consumers.

“The investment sector can sometimes be perceived as being a little shady, especially when it comes to tax,” said Mike Head, director of Ethical Investors.

Ethical Investors, which were first awarded the Fair Tax Mark in 2018, have been advising clients on their financial plans, including their investments, since 1989. As pioneers of financial advice on ethical, social and governance (ESG) investing, Head said the Fair Tax Mark allows the firm to “share our beliefs that not only is tax essential, but that fair payment of tax is a key element of responsible investing”.

As well as being an indicator of responsible corporate governance practices more broadly, the fair payment of tax can also demonstrate social responsibility – bolstering the coffers of governments and communities in which corporations do business to elevate public services.

The investment sector is increasingly looking at corporation tax in the context of responsible practices, and at corporate ESG strategies more broadly.

“Where once we were an outlier in seeking to talk about non-financial issues with our clients and investee companies, more recently we have observed a crowded marketplace full of bold claims about the environmental and societal benefits of investment products,” noted Andrew Harper, Executive Director and Chief Responsibility Officer at Epworth Investment Management.

Epworth Investment Management, which were first accredited in 2020, use the Fair Tax Mark as part of their engagements with investee companies, for example in addressing the topics of tax justice, promoting the right payment of tax in the right jurisdiction at the right time, and tax transparency.

But the Fair Tax Mark can also help Epworth Investment Management stand out from an increasingly ESG-focused sector for their own corporate practices.

“We have found the Fair Tax Mark to be one example of a key differentiator between us and the marketplace of general investment providers, demonstrating our commitment to sustainable society,” Harper said.

The same can be said for Ethical Investors. Head added: “Being Fair Tax Mark accredited allows us at Ethical Investors to demonstrate the sort of adviser we are. It allows us to prove our commitment to honesty and our transparency.”

 

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