EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Limited, each of which is a separate legal entity. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland.
How EY can help
How are you ensuring awareness, compliance, and accountability for the future?
Green taxes are a relatively new concept, and organizations may, until now, have scrambled to ensure they have an appropriate awareness and understanding of rules and regulations in all of their jurisdictions of relevance. New and upcoming sustainability regulation is far-reaching, and areas of focus will depend on specific industries and countries of operation. Whatever your sector, the topic of Green Taxes should not be seen as a regular and recurring compliance exercise, but rather as a fundamental shift in perspective. By analyzing the legislative trend, you can anticipate developments and align your strategy. In doing so, your organization emerges as a first mover with a potential competitive advantage.
Where might Green Taxes have an impact along your supply chain?
Supply chains are evolving as business models shift from traditional linear setups to circular business models. Green Taxes impact your business throughout the end-to-end supply chain. They are levied at every step of the way and cause a snowball effect through both direct and indirect costs. From sourcing and transportation to product end-of-life management, decisions throughout the supply chain need to be reviewed carefully. Although every stage of the supply chain is important, a focus on the (re)cycle stage can help you make the final leap toward the “ideal” state: circularity.
How do Green Taxes affect the operating model layers?
The overall operating model will need to be adapted to accommodate the shift to a sustainable strategy and business model. Based on what we have seen in the market, organizations are in the process of understanding the implications Green Taxes may have on their operations. Most companies focus initially on protecting their current operating model. This is understandable as a significant overhaul of strategy and business model takes time and demands a fundamental revision of established structures and processes. However, to meet ambitious net zero emissions plans and/or qualify for sustainability incentives, companies will need to rethink the way they operate. Moving to a sustainable business model starts with a gap analysis and impact assessment of the current operating model.