HLS Student Journals

Corporate social responsibility ("CSR") has a tax problem. The field encourages companies to do more for society than the minimum that is legally required. But, when it comes to companies avoiding tax, CSR has very little to say. Activists even allege that CSR merely distracts from companies' much costlier tax minimization strategies that deprive the state of needed revenue and thereby undercut the state's capacity to perform these very same functions.

Though CSR has historically sidestepped questions of tax, this is beginning to change. Some major companies now discuss tax as a part of their corporate sustainability reporting. And CSR standard setters have started to consider including tax as a factor in their evaluation of corporate behavior. At the same time, countries around the world are starting to implement the Organization for Economic Cooperation and Development ("OECD") and G20 plan for a Global Minimum Tax. This program aims to enforce a minimum tax rate for large multinational corporations, thereby reducing incentives for tax arbitrage. Though this focus on tightening the rules regarding how much tax business entities owe is significant, companies will still retain much discretion as to where they pay tax.

This Article argues that corporate discretion regarding where to pay tax is a pressing issue about which a more robust version of CSR may provide important guidance. It proposes that future dialogue between tax and CSR should focus not just on how much companies pay but also on where companies pay tax. The Article articulates how considerations of economic development, human rights, and environmental protection may inform the exercise of corporate tax discretion, and it examines the important ramifications of these decisions for global inequality.