How to Deal with Tax Avoidance in Sustainable Finance?

Gregory Schneider-Maunoury () and Mathieu Joubrel ()
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Gregory Schneider-Maunoury: CEPN Centre d’Economie de Paris Nord, Université Sorbonne Paris Nord
Mathieu Joubrel: ValueCo

Chapter Chapter 6 in Contemporary Issues in Sustainable Finance, 2025, pp 123-156 from Palgrave Macmillan

Abstract: Abstract This research aims at providing and understanding tools to assess tax avoidance in sustainable finance. Starting with the definition of tax avoidance, the chapter explores the different views on tax provided by tax macroeconomics and the different phenomena related to tax avoidance and evasion. It then assesses the initiatives taken by investors on this issue and review the changes provided by the sustainable finance regulation, notably in the European Union. Then the methodological part enables to sort out 3 ratios in order to better understand the phenomena. The availability of the data is checked among 3 different samples (US very large caps, EU large caps, French small caps. 2 of the ratios enable to display the level of financial risk represented by tax avoidance among European listed companies. Last, in order to assess rightly the results provided by these indicators, a deep data analysis is achieved on the EU large caps sample. This enables to see that control variables (sector, country) have an impact but do not determine the tax avoidance strategy of a company. Some conclusions are drawn on the role of governments in tax avoidance and the way tax strategy may be integrated into ESG analysis.

Keywords: Tax avoidance; Sustainable finance; Risk; Business practices; Deferred tax; E62; H23; H26; M41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-031-81178-4_6

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DOI: 10.1007/978-3-031-81178-4_6

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