On Monday 5 January 2015, The Crowd hosted another successful event, this time entitled The CFO’s Dilemma. The key theme was the potential dilemma facing CFOs as to whether short term pressures can be balanced with long term sustainable value. Whether the investment in sustainable development (“SD”), with returns which are long term, and sometimes difficult to quantify, is consistent with a fiduciary duty to shareholders to create value.

After some excellent speeches, particularly from Gregor Alexander, FD of SSE plc, a CFO panel consisting of Ken Gregor (Jaguar Land Rover), Evelyn Bourke (BUPA) and Deidre Mahlan (Diagio) debated the existence and consequences of this dilemma, and took questions from the floor.

The panel were in broad agreement that SD forms a crucial element of the wider, long term value proposition, and that shareholder value should be about a long term sustainable approach to business, rather than measured by short term gain. Indeed, it was refreshing to hear parallels drawn between investment in sustainability, whether that investment is monetary, strategic or through greater transparency, and the commercial investment decisions made by businesses. Whether it is an investment in a new business line, accessing new resources or the development of new products for the market, commercial investments are measured by the long-term value they create. Sustainability should be measured in the same way.

What is interesting to me though is that tax was embedded in this debate. It was one of the main themes in Gregor Alexander’s excellent keynote speech, and was returned to regularly in the discussions. Whether it is initiatives like the Fair Tax Mark, responsible tax behaviour more generally, or tax stakeholder engagement, tax was part of this agenda. Tax, as part of the relationship businesses have with governments and other stakeholders, is important to the long-term sustainability of a business. However, this fell short of answering a very important question. “So what?”

The answer to this question is actually very simple. Businesses (not just CFOs) need to embed tax into the way they think about sustainable development. That means a tax strategy, policies and governance, married with transparency and stakeholder engagement. Sounds easy? Here is the real challenge: How to achieve this in practice.

In general, there are few touch points between SD and tax professionals. Most people on either side of this divide have little understanding of what the others do, and not much need to know in detail. So how do you embrace a holistic approach to sustainable development? Are SD and tax professionals just too different for this to be achieved?

Tax professionals work in a complex world of rules and reporting requirements. They have internal and external stakeholders, sometimes on very technical issues. They are usually resource constrained and measured by business KPIs. On the other hand, SD professionals are…very similar. The technical issues may differ, and they share only some of the same stakeholders, but there is more in common that we might sometimes think.

So what is the real challenge facing SD and tax professionals? I’m afraid it is three of the oldest ones in the book:

1. Communication
2. Collaboration
3. Congruent goals

In the world of SD, it would be considered perfectly normal for a business to have a safety strategy, water strategy, energy strategy and the like, and for these to represent the output from a collaborative piece of work.

There is nothing different about a Tax Strategy, except:

1. There is less existing best practice to follow
2. There is less track record of quantifiable benefits to hold up
3. The stakeholders are different.

But what is absolutely clear is that a tax strategy is as important a part of the overall SD approach of a business as safety, water and energy, so it is vital that it is given the same collaborative consideration and engagement.

So, what does this mean in practice? Some businesses will already be a way down this road, and will have an established tax strategy. If that is the case, and hopefully it is aligned to wider business objectives, the challenge is to embed those principles into the overall SD approach, narrative and messaging.

If a formal tax strategy does not exist, it is key that SD, tax and government relations/public affairs professionals work together to develop one, bringing together technical elements from the tax professionals with stakeholder engagement experience.

It is only though Communication, Collaboration and Congruent goals that the opportunities open to businesses with a responsible approach to tax can be fully realised.

The fact that tax formed part of this debate, fronted by the CFOs of four major organisations, gives me hope that businesses will take up this challenge, and see the interaction between SD and tax and essential, achievable, but most importantly as an opportunity.