PKA to screen investee companies’ tax payments

Denmark’s PKA, for those working in the health sector, is to begin a review of the tax paid by the companies it invests in.

The company has long focussed on other environmental, social and governance (ESG) issues such as labour rights, climate and sustainability but it is now turning its attention to tax. It believes that tax payment is an important part of economic sustainability and social responsibility, which is why it is supporting a new international initiative.

In October this year, an OECD deal saw 136 countries and jurisdictions commit to ensuring multinational enterprises are subject to a minimum of 15 per cent corporation tax from 2023. The new minimum tax rate will apply to companies with revenue above €750m and is estimated to generate around USD 150bn in additional global tax revenues annually. Currently in Denmark, corporation tax is set at 22 per cent for 2021.

PKA CEO, Jens Johnsen, said: “We are already starting to review the largest companies we invest in to see if they are moving in the right direction towards the goal. We believe that responsible tax practice in the world's largest companies will spread to smaller companies.”

PKA has begun screening the companies that it invests in, including larger companies and smaller companies that are not yet listed. If it finds that a company is not meeting its expectations, then it will open a dialogue with them on the matter.

"It is no different than what we do with, for example, CO2 emissions or those of the UN's global goals that we focus on: We use our investments to influence companies’ behaviour. This is what we call active ownership, and it is a way to help make a difference,” Johnsen said.

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