Insight

ESG and Transfer Pricing

How transfer pricing practitioners can respond to ESG-related changes

Jessie Coleman

Jessie Coleman

Principal, Washington National Tax, Economic & Valuation Services, KPMG US

+1 202-251-8879

Jack O'Meara

Jack O'Meara

Principal, Washington National Tax—Transfer Pricing , KPMG LLP

+1 415 963 5191

Erkan Erdem

Erkan Erdem

Principal, Economic & Valuation Services, KPMG US

+1 703-286-8188

Understanding ESG-related impacts on transfer pricing

Environmental, social, and governance (ESG) policies and the movement towards greater sustainability will continue to transform many businesses. As internal and external stakeholders focus on ESG policies, multinational companies (MNCs) are responding to these pressures by making ESG-related changes to the business. 

Given the rapid emergence and broad scope of these initiatives, transfer pricing leaders in tax departments need to take steps to:

  • Understand ESG-related changes to the business.
  • Revisit their analyses into what creates value and drive business profits.
  • Determine if modifications to their transfer pricing policies are needed.

Read the report

ESG and Transfer Pricing
While the breadth and depth of how and if companies embrace ESG varies significantly by industry and company, many companies are moving toward more sustainable business practices. Given this change, companies need to reevaluate the value drivers of their business to determine if they need to modify their transfer pricing policies.

Read this report to learn more about addressing ESG business changes step-by-step:

  • Determine who is making ESG recommendations and establishing sustainability strategy
  • Identify prospective changes in the business
  • Assess the anticipated impact on business results
  • Analyze the transfer pricing policies for ESG-related changes
  • Update transfer pricing documentation

Read the full article from which this report originated - May 2022.