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Tax and ESG Roundtable: From Compliance to Strategic Value

Name: MHA
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· Posted on: June 13th 2025 · read

On 11 June 2025, MHA, alongside All Things Business, welcomed business leaders, advisors and sustainability advocates to its Milton Keynes office for a roundtable exploring the intersection of tax and ESG. Chaired by Adrian Pryce, the session brought together representatives from consultancy, construction, legal, manufacturing and finance for a wide-ranging discussion on how businesses are navigating growing expectations around environmental, social and governance (ESG) practices and the increasingly important role tax plays in this narrative.

The ESG Landscape: Drivers and Definitions

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Milton Keynes

The session began with reflections on how organisations define and engage with ESG. While some referred to it as “CSR” or “sustainability,” there was consensus that terminology matters less than intent and impact. For many, external pressures from supply chains and clients are pushing ESG up the agenda, while internal motivations such as attracting and retaining staff, fulfilling purpose-led missions or securing B-Corp status are shaping strategic priorities.

Participants shared their experiences with frameworks like B-Corp certification and Planet Mark, which have helped embed sustainability into operational practices, even if the process is resource-intensive. The conversation highlighted a growing realisation among SMEs that ESG is becoming essential to stay competitive, particularly when selling into larger corporates or European markets.

From Cost Centre to Value Driver

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Sustainability & ESG

A recurring theme was the need to shift ESG from a reactive compliance exercise to a proactive value creation strategy. One participant noted that “value is defined differently by each organisation,” highlighting the importance of tailoring ESG to business purpose and stakeholder expectations. This point came up again in discussions about “impact measurement,” with participants supporting the use of social return on investment (SROI) frameworks and the “Theory of Change” model to help quantify intangible benefits like improved wellbeing or reduced healthcare costs.

There was agreement that while environmental metrics such as waste, water and energy are becoming mainstream, social impact remains harder to measure and potentially more transformative. Contributors called for better tools and clearer guidance to help SMEs communicate their ESG impact in a credible, data-led way.

Tax: The Overlooked Lever in ESG Strategy

The second half of the session focused on the tax dimension of ESG, with insights from MHA’s tax specialists and industry attendees. There was broad agreement that tax policy is increasingly being used to shape sustainable behaviour through mechanisms like plastic packaging taxes, R&D reliefs and capital allowances for energy efficiency investments.

However, it was noted that ESG and tax are often considered separately within organisations. This siloed approach can miss opportunities for integration, especially as supply chain transparency, due diligence and anti-tax avoidance obligations gain traction in different jurisdictions. Participants pointed to growing regulatory divergence, such as between UK and EU environmental taxes, as a challenge for cross-border operations.

One key insight: ESG teams need to think more strategically about tax, and tax teams need to be included in ESG planning.

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Tax

People, Purpose and Engagement

The discussion also touched on the importance of employee voice in shaping ESG efforts. While several attendees expressed frustrations about low engagement, others shared examples of success, including regular feedback loops, regional giving strategies and employee ownership trusts (EOTs). The consensus was that fostering purpose-driven cultures starts with listening and responding. ESG must be embedded into everyday business thinking, not just captured in policy documents.

Key Takeaways

Terminology varies (ESG, CSR, sustainability) but the focus should be on authentic impact
SMEs are under increasing pressure from supply chains and clients to demonstrate ESG credentials
Frameworks like B-Corp and Planet Mark are useful but present resourcing challenges
Social impact is the next frontier in ESG and requires better metrics and storytelling
Tax must be part of ESG strategy, both for compliance and for unlocking incentives
Employee engagement is difficult but vital. Organisations that succeed listen, act and embed feedback into culture
Cross-sector collaboration among business, academia, charity and government will be key to ESG innovation