ESG Reporting and Tax
Project Description
This project explores how taxation can be integrated into environmental, social, and governance (ESG) reporting frameworks, and how technology can support this process. While tax transparency has become an increasingly important topic in global debates, the absence of a clear regulatory framework means that most multinational enterprises (MNEs) disclose tax strategies in voluntary and unstructured ways. Only a few jurisdictions, such as the UK and Australia, require mandatory disclosure, whereas in the EU, Switzerland, and Liechtenstein, such reporting remains largely volun-tary.
This project addresses two interconnected areas. First, it examines how tax is positioned within ESG reporting and the extent to which companies integrate tax-related information into their non-financial disclosures. As investors and regulators increasingly expect businesses to embed tax governance into sustainability strategies, the project aims to clarify the role and weight of taxation within ESG frameworks and to identify best practices in corporate reporting. Particular attention will be paid to the drivers of tax and ESG reporting, and to insights from previous research on corporate tax disclosures in the DACH region.
Second, the project investigates how digitalisation can shape the future of ESG and tax reporting. Multinationals are under growing pressure to collect, verify, and disclose vast amounts of both financial and non-financial data. In this context, technology plays a central role in ensuring accuracy, comparability, and timeliness. The project explores how advanced tools such as artificial intelligence, blockchain, and other software solutions can help companies structure disclosures more effectively, enhance transparency, and transform tax governance from a compliance activity into a forward-looking strategic function.
This project addresses two interconnected areas. First, it examines how tax is positioned within ESG reporting and the extent to which companies integrate tax-related information into their non-financial disclosures. As investors and regulators increasingly expect businesses to embed tax governance into sustainability strategies, the project aims to clarify the role and weight of taxation within ESG frameworks and to identify best practices in corporate reporting. Particular attention will be paid to the drivers of tax and ESG reporting, and to insights from previous research on corporate tax disclosures in the DACH region.
Second, the project investigates how digitalisation can shape the future of ESG and tax reporting. Multinationals are under growing pressure to collect, verify, and disclose vast amounts of both financial and non-financial data. In this context, technology plays a central role in ensuring accuracy, comparability, and timeliness. The project explores how advanced tools such as artificial intelligence, blockchain, and other software solutions can help companies structure disclosures more effectively, enhance transparency, and transform tax governance from a compliance activity into a forward-looking strategic function.
Relevance to Liechtenstein
The relevance of this project for Liechtenstein is considerable, given that many locally based multinational groups operate internationally and are therefore exposed to evolving expectations around transparency and responsible tax behaviour. For companies already publishing tax strategies, moving towards more structured and standardised reporting could strengthen credibility, improve comparability, and support constructive dialogue with regulators, investors, and the broader public. For those without a publicly available strategy, adopting one could enhance stakeholder trust, mitigate reputational and compliance risks, and reflect alignment with international norms of responsible tax conduct. In this regard, the findings from various analysed markets in Europe-such as Austria (ATX), Germany (DAX), and Switzerland (SMIEXP)-can serve as a benchmark for Liechtenstein-based companies seeking to implement tax sustainability disclosure practices, while those already reporting can compare their approach against peers across the region.
At the same time, Liechtenstein's entrepreneurial and internationally oriented economic model underscores the relevance of enhanced tax transparency in promoting clarity in corporate reporting and alignment with international and European standards, including public Country-by-Country Reporting. Moreover, digitalisation forms a central pillar of national economic development. As the government advances digital innovation, businesses are increasingly expected to integrate technology into governance and reporting processes. Applying advanced tools such as AI, blockchain, or other specialised tax reporting systems would allow companies to enhance internal data management while positioning Liechtenstein as a demonstrator of modern, technology-enabled sustainability reporting.
At the same time, Liechtenstein's entrepreneurial and internationally oriented economic model underscores the relevance of enhanced tax transparency in promoting clarity in corporate reporting and alignment with international and European standards, including public Country-by-Country Reporting. Moreover, digitalisation forms a central pillar of national economic development. As the government advances digital innovation, businesses are increasingly expected to integrate technology into governance and reporting processes. Applying advanced tools such as AI, blockchain, or other specialised tax reporting systems would allow companies to enhance internal data management while positioning Liechtenstein as a demonstrator of modern, technology-enabled sustainability reporting.
Scientific, Economic and Societal Impact
ESG and tax reporting have gained substantial significance in the contemporary policy and business landscape. As sustainability regulation progresses across Europe and globally, the integration of tax governance within ESG strategies is becoming a core expectation for multinational enterprises. Stakeholders increasingly demand transparency not only in financial performance, but also in how companies contribute to society through responsible tax behaviour. In this context, taxation is emerging as a key indicator of corporate accountability and sustainable value creation. Despite this, tax transparency reporting remains fragmented. While several countries, such as the Netherlands, the United Kingdom, and Australia, require disclosure of tax strategies, most jurisdictions rely on voluntary reporting, resulting in unstructured practices. Multinationals have begun issuing voluntary tax transparency reports, yet the absence of consistent standards means the role of taxation within ESG remains conceptually underdeveloped.
This project addresses that gap. It first analyses how multinational groups currently integrate tax information into ESG disclosures and evaluates evolving regulatory and standard-setting approaches. Second, it examines the role of technology, including AI, blockchain, and data analytics, in enhancing accuracy, comparability, and strategic tax governance. Through comparative assessment and practical case insights, the project aims to clarify how digital innovation can support credible, decision-relevant, ESG-aligned tax reporting.
This project addresses that gap. It first analyses how multinational groups currently integrate tax information into ESG disclosures and evaluates evolving regulatory and standard-setting approaches. Second, it examines the role of technology, including AI, blockchain, and data analytics, in enhancing accuracy, comparability, and strategic tax governance. Through comparative assessment and practical case insights, the project aims to clarify how digital innovation can support credible, decision-relevant, ESG-aligned tax reporting.
