The Role of Taxation in Strengthening Esg Compliance: a Study of Policy Incentives and Corporate Behavior
Year: 2026
Type: article
Abstract: ABSTRACT: ESG compliance is now necessity part of corporate responsibility and sustainable development. Nowadays organizations are increasingly required to match their operations with environment protection social welfare and ethical governance standards. In this context taxation has came up as powerful policy instrument which influences corporate behaviour by giving financial incentives for good sustainable practices and putting extra costs on those activities which harms environment and society. This work tries to access the role of taxation in strengthening ESG compliance by analysing how different fiscal measures such as environmental taxes carbon pricing and tax incentives shapes corporate decision making and encourage more responsible business conduct. The study explores how effective are various taxation tools in promoting sustainability strategies improving resource efficiency and enhancing corporate accountability. It also consider their impact on long term performance of the organizations. At same time study highlights key challenges in using taxation for ESG purposes like policy inconsistency across different regions administrative complexity and possibility of unequal impact on small and big firms. The findings suggests that if taxation policies are well designed and implemented consistently then it can significantly help in improving ESG compliance by aligning economic incentives with sustainability goals. But success of these policies mostly depends upon strong institutional frameworks effective enforcement and coordinated efforts among all stakeholders.
Institution: Kalinga University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7204247052