The Effect of Environmental, Social and Governance (ESG) Reporting on Tax Avoidance

This thesis examines the relationship between tax avoidance and ESG performance in order to assess the possible effects of Environmental, Social, and Governance (ESG) on a company's tax practices. Although as a tactic, tax avoidance strategies are implemented to support immediate financial gain and profitability, this study examines the growing body of evidence indicating that businesses that prioritize tax transparency are more likely to obtain funding at a lower costs, accomplish long-term financial stability, and strengthen stakeholders trust. According to the study, abandoning aggressive tax avoidance tactics results in a number of positive ESG implications, including lower capital expenses, higher stock performance, and improved operational efficiency. These conclusions are supported by an in-depth review of the literature as well as a careful inspection of case studies from real-world situations.

The study aims to understand whether robust ESG practices influence a company's tendency to engage in tax avoidance strategies or not.