A sustainable tax firm is characterized above all by a particularly high level of environmental awareness. This means using the most energy-efficient appliances and technologies possible, avoiding disposable materials of all kinds as far as possible and participating in recycling programs wherever possible. A sustainable tax firm therefore takes care to keep the negative environmental impact of everyday office life as low as possible. This is a relatively simple matter in theory and practice, concrete ideas and strategies for implementation are quickly found, and evaluating and measuring success is also easy: reducing electricity and water consumption, largely dispensing with paper through digital processes and reducing mobility by working from home and using video conferencing.
In addition to environmental awareness, high ethical standards and social responsibility are another key pillar of sustainability and therefore an obligatory exercise for tax firms working sustainably. What does that mean in concrete terms? The sustainable law firm focuses its business practices on promoting social justice and fairness and preventing the opposite. The range of possible measures is wide, but always includes behavior towards one’s own employees and business partners. In addition, we support charitable organizations, social projects and participate in local initiatives where this makes sense. Here, too, it is generally easy to find specific approaches and projects, define suitable measures and evaluate their success on an ongoing basis.
But is there such a thing as sustainable tax advice? This is where it becomes much more difficult and less concrete, but some approaches can already be defined and are actually obvious. On the one hand, this can be sustainability consulting in general, i.e. when the tax firm or individual tax consultants have internalized the principles of sustainability to such an extent that they recommend sustainable measures and investments to their clients as part of tax optimization and encourage sustainable business practices. Of course, this is all much fuzzier than the previous topic and very difficult to measure, but the use of tax benefits and incentives can lead to environmentally friendly investments and enable the promotion of renewable energies. If tax advice also includes incentives for responsible and environmentally conscious entrepreneurship in addition to the legitimate economic interests of the client, ethics and social responsibility are promoted and positively influenced in the long term.
Even if it may sound unpopular to some, sustainability necessarily means assuming social responsibility, i.e. promoting transparency and compliance. Ultimately, this also means complying with tax regulations and refraining from non-legitimate tax avoidance measures. Dealing responsibly with tax issues means being aware of our social responsibility and working towards long-term ecological, social and economic sustainability. We would like to go on to name a few specific fields of action that can make up a sustainable tax firm or sustainable tax consultancy.
But first a few basic thoughts on the concept of sustainability. In general, it is a principle of action in the use of resources with a simple basic idea: a voluntary restriction helps to maintain the natural regenerative capacity of all systems involved and thus ensure the possibility of satisfying needs in the long term. This basic idea is at least 300 years old and originates from forestry. A German chief mining administrator (Hans Carl von Carlowitz 1645-1714) transferred the concept of sustainability to forestry, where a stable balance between the use and regrowth of trees stood for responsible use of the forest as a resource.
The term gained international recognition when it was mentioned in the Brundtland Commission report, which was commissioned by the United Nations to outline long-term perspectives for a healthy development policy and environmental protection. Sustainable development today is not only environmentally friendly but also includes the idea of intergenerational justice. It is therefore important to note that sustainability is a broad term and can be interpreted and implemented differently by different companies and law firms.
Some law firms may specialize in certain areas, while others strive for a holistic sustainable corporate culture. When looking for a sustainable tax firm or tax consultancy, it is therefore advisable for clients to communicate with potential partners and understand their sustainability practices and values and ensure that these are in line with their own ideas of sustainability.
Tax firms are first and foremost commercial enterprises that consume resources. The more companies act sustainably in their everyday lives, the more we move towards a sustainable society. However, the impact of tax advice on the environment and society is considerably greater, both in a positive and negative sense. If tax advisors act ethically and pay attention to sustainability, they will advise their clients responsibly and achieve long-term positive effects. Put simply, tax advisors are multipliers for economic activity and can promote positive developments in this function.
The positive effects of sustainable tax advice are the promotion of sustainable business practices among clients: they encourage tax incentives for investments in environmentally friendly technologies or support socially responsible entrepreneurship. Well thought-out tax advice promotes the financial health of companies, which in turn create jobs through their growth and contribute to the economic development of their region. Last but not least, ethical and professional tax advice can help companies and private individuals to meet their tax obligations and pay taxes properly. A functioning tax system finances public investment, which ultimately benefits us all.
This is countered by possible negative effects. Tax advisory firms that primarily use unfair and aggressive tax strategies may please individual clients, but they tend to lead to a loss of tax revenue with a negative impact on the funding of public services. If tax advisors even support their clients in fraudulent practices such as tax evasion, this also undermines trust in our tax system and harms society as a whole. The environmental impact of the law firm itself is minimal compared to the impact of tax advice, but the energy consumption in the office, the use of paper and other resources should not be ignored. A particularly sustainable tax firm could even consider investing part of its profits in ecological and social projects in order to actively contribute to the promotion of sustainability.
Involving employees in sustainability initiatives promotes awareness of environmental and social issues and motivates all employees. Companies can offer training courses and workshops on various sustainability topics and appoint a team or an individual employee as a sustainability officer. Idea competitions also encourage creativity and commitment in terms of sustainability, and the best ideas must of course be implemented and appropriately rewarded. In the long term, sustainability goals must be integrated into the corporate culture so that they play a central role in the long term and are supported by all employees. Companies should report regularly on their efforts and share progress transparently with employees; participation creates commitment and promotes the responsibility of each individual.
Supporting charitable organizations and local community projects is an important way for companies to assume social responsibility. Donations – one-off or regular – are the most common form of support, while sponsorship of charitable organizations is a form of long-term partnership that can be mutually beneficial and achieve long-term effects. Educational initiatives are another way companies can support educational initiatives in schools or educational institutions to improve educational opportunities and raise awareness of important issues. Finally, companies themselves can organize or support events in the community, e.g. street festivals, cultural or sporting events that strengthen the sense of community and enrich local life.
Fair working conditions and equality in the firm are essential elements of a responsible and sustainable corporate culture, especially in a tax firm. This begins with equal treatment when hiring new employees and continues by offering all employees the same opportunities for professional development and promotion. The firm can offer flexible working hours to help employees achieve a better work-life balance, a fair remuneration policy helps, as do clear policies against discrimination and harassment in the workplace. Regular employee surveys gather feedback from employees and create a positive identification with the firm. Health and well-being through yoga courses or workshops on stress management are already part of the free program, leadership by example is a duty: management and executives should act as role models and actively exemplify the company’s values. What does this have to do with sustainability? Quite simply, a high level of employee satisfaction always leads to higher productivity and ensures the long-term success of the company.
AUTHOR: Dipl. oec. Claudia Jenewein, tax consultant
PROFESSIONALLY CERTIFIED: Dipl. Business economist (FH) Kerstin Schumacher, tax consultant