Environmental taxes: new focus of impact on the reputation of multinationals

During the last few years, different countries and regions have started to formulate new public measures with the aim of enhancing sustainability, increasing the well-being of citizens and curbing climate change..

One of the most popular measures in this regard has been to employ taxation to reward sustainable behavior, such as with green energy subsidies, and to discourage more polluting practices, for example through carbon taxes.

The latter is the case of the so-called new “Amazon tax”, a new tax that will come into force in Barcelona in 2023 and that taxes the delivery of goods purchased online and delivered at home for “use of public space”. Despite its name, this tax will not only affect shipping giant Amazon, but all large e-commerce postal companies such as DHL, UPS, Seur, MRW or Correos Express, whose gross revenue exceeds one million euros obtained from deliveries to their final destinations.

The objective? As the project states, to encourage proximity commerce and prevent the city from being saturated with delivery vehicles that cause pollution and congestion.

This new tax has been presented as a “David versus Goliath” style measure to support small commerce against the multimillion-dollar multinationals that “did not contribute to the general interest”, according to the Barcelona authorities, who have studied the measure in detail to avoid any legal action by these companies.

A decision that, of course, has generated much controversy and opposition. In Spain, the Spanish Logistics and Transport Business Organization (UNO) warns of possible comparative grievances between regions in Spain. In other countries, such as the United Kingdom, the measure has been directly rejected because of the risk of creating unfair distortions between different commercial models, as well as for fear that it will generate the opposite effect to that intended in terms of decongestion and reduction of pollution in cities if what is achieved is that more and more consumers move physically to make their purchases.

Whatever the case, the reality is that the tax burden is increasing for large multinationals, which are not only taxed under the weight of wealth redistribution, but now also pay more taxes as part of the fight for sustainability.

Regardless of the potential benefits or detriments of this measure, multinationals are increasingly exposed to the presumption of guilt in the fiscal and now also in the environmental dimension. Often, large logistics companies such as Amazon are inherently assumed to be contrary to the general interest and are criticized for being considered to pay little tax or for being highly polluting and contrary to sustainable consumption, regardless of whether they comply with current tax and environmental regulations in the cities where they operate.

Therefore, beyond any legal action they may take against public institutions, it is advisable for companies to make an effort at the communication level to explain how their fiscal model contributes to promoting sustainability and helping local communities. Therefore:

1. As could not be otherwise, large multinationals must comply rigorously with their tax and environmental obligations, updating and informing themselves about the particularities and legislative trends of each jurisdiction in which they operate.
2. Similarly, all these companies must really engage in sustainable practices, adapted to their business models and to each place where they operate, contributing positively in each community.
3. But it is not only worth doing it but also looking like it. In addition to promoting sustainable practices, large multinationals must know how to convey to each of their stakeholders (municipalities and public bodies, consumers, transporters, employees…) how their tax system makes sense in the framework of the specific activity of each of these companies and how their tax and environmental contribution helps to achieve sustainable development objectives.

Whether they abide by these new taxes or, failing that, take legal action against public bodies for imposing them, multinationals will continue to have, and increasingly so as sustainability concerns grow, this image of large unscrupulous companies damaging the general welfare..

Therefore, it is increasingly important that large companies not only comply with their tax obligations and become truly involved in practices that favor sustainability, but also that they are able to explain how their contributions contribute to increasing the social well-being of the communities in which they operate, since respect for sustainability is already expected as a transversal element in all company activities and constitutes a determining factor in their social license to operate.

If you are interested in learning about the new risk factors that threaten the reputation of multinationals with regard to their tax activity, we invite you to download: “Taxation and reputation: multinationals in the spotlight.”

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“Taxation and reputation: multinationals in the spotlight.