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Roadmap on Responsible Tax Practices by Pension Funds

November 2015 - The Global Unions Committee on Workers' Capital (CWC) has released a roadmap on how tax evasion and corporate tax planning risks can be integrated in responsible investment practices. The CWC roadmap follows on a Global Union Call for Responsible Tax Practices signed by 45 trade union bodies from 19 countries a year ago.

Commenting on the release, Ton Heerts, President of the Dutch trade union centre FNV and Chair of the CWC said: “Aggressive tax planning schemes by multinationals represent a threat to the sustainability of our economies and to our pension systems. We expect pension funds, managing workers’ capital, to integrate tax risks in their responsible investment framework alongside environmental, labour and human right risks. This roadmap is a concrete tool for pension trustees representing workers to address tax risk in the boardroom meeting of pension funds”.

Sharan Burrow, General Secretary of the International Trade Union Confederation (ITUC), which created the CWC in 1999, said “The G20, meeting in Antalya last week, made a firm commitment to implement the Action Plan by the OECD on Base Erosion and Profit Shifting (BEPS). The emerging international consensus to curb aggressive tax planning by global corporations is welcome. But to be effective, it needs to be supported in the financial markets and by shareholders in particular, including the USD23tr worth pension fund industry where unions and their trustees have a voice in fund governance. This is where the CWC roadmap comes in”.

The investor brief outlines key aspects of the tax evasion and aggressive tax planning policy debate and why they matter for investors – including the outcome of the G20/OECD action Plan on Base Erosion and Profit Shifting. The roadmap identifies a selection of corporate governance indicators to look for when engaging with the management of invested companies or when preparing the annual general meeting of shareholders.

The roadmap, posted here is part of a series of thematic investor briefs to help union pension trustees address key elements of responsible investment practices in the boardroom discussion of pension funds.

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