Article
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Preserved in Portico This version is not peer-reviewed
ESG, Taxes, and Profitability of Insurers
Version 1
: Received: 24 August 2023 / Approved: 25 August 2023 / Online: 28 August 2023 (10:06:25 CEST)
A peer-reviewed article of this Preprint also exists.
Bressan, S. ESG, Taxes, and Profitability of Insurers. Sustainability 2023, 15, 13937. Bressan, S. ESG, Taxes, and Profitability of Insurers. Sustainability 2023, 15, 13937.
Abstract
The growing concerns on sustainability urge insurance companies to incorporate Environmental, Social, and Governance (ESG) policies in order to remain competitive.
As all dimensions of sustainability involve taxation, it is important to establish if this association reflects on financial performance.
Our analysis of worldwide property and casualty (P&C) insurers during 2013-2022 reveals that high ESG insurers pay more taxes, while are less profitable compared to low ESG insurers. This pattern is confirmed using instrumental variable regressions and simultaneous equations systems. We argue that sustainable insurers are less tempted to avoid taxes, and don't shift their tax burdens on policyholders and investors.
However, the interplay between taxes and sustainability seems to harm insurers' profitability, potentially sorting negative consequences on investment and economic growth. This is an important insight for tax authorities and insurance managers.
Keywords
Insurance; ESG; Sustainability; Taxes
Subject
Business, Economics and Management, Finance
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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