EY CEO Carmine Di Sibio has suggested that the main threat to businesses under the Biden administration will be the possibility of higher corporate taxes.
Di Sibio told Karen Tso that he thought U.S. President Joe Biden, who was sworn into office last Wednesday, would “listen to business.”
“I think he’s a centrist,” Di Sibio said in an interview recorded last week, adding that he believed Biden’s policies would be “pro-business.” He also said there would likely be more consistency on policy under Biden, than his predecessor President Donald Trump, which would be good for businesses.
However, Di Sibio added that the “danger for business in this administration would be taxes.”
He argued that the corporate tax cuts implemented by the Trump administration were “incredibly important to U.S. corporates,” particularly for remaining competitive compared to other countries.
Although changes to corporate taxes don’t appear to be on the Biden administration’s immediate agenda, if they do come to the fore it would “drive business away from the U.S.,” Di Sibio said.
Trump cut U.S. corporate tax to 21% from 35% in legislation passed in 2017.
Biden has proposed to increase that corporate tax rate to 28%, along with a 15% minimum book tax. Last week, in her Senate confirmation hearing to become Biden’s treasury secretary, former Federal Reserve Chair Janet Yellen said the U.S. could afford higher corporate taxes if they were in line with other countries.
Climate change a priority for Biden
Di Sibio recognized that climate change was a top priority for the Biden administration, and discussed how he expected it to work on this issue with the business community.
“I’ve said this before, I think Europe has been way ahead when it comes to sustainability, the U.S. has been catching up, and the U.S. has been catching up frankly for the last couple of years,” Di Sibio said.
One of the first executive orders signed by Biden, after being sworn in on Wednesday, was to rejoin the Paris Agreement. Trump withdrew the U.S. from the international climate change treaty in 2017.
Biden appointed former Secretary of State John Kerry as U.S. climate envoy, who Di Sibio said will “work with business to make sure that we achieve what needs to be achieved according to the Paris Accord.”
EY’s carbon negative target
Di Sibio’s comments come as EY announced on Monday its own commitment to be carbon negative in 2021, by significantly reducing its absolute emissions. This will entail “removing and offsetting” more carbon than the professional services firm emits, EY said in a statement Monday.
EY is also aiming to achieve net zero emissions in 2025, which will mean reducing total emissions by 40%.
Di Sibio said the targets were “ambitious,” but that EY’s employees and clients “expect it.”
In order to achieve these goals, EY plans to reduce its business travel emissions by 35% by 2025, compared to what it emitted in 2019.
Di Sibio explained that this represented an “overall reduction on business travel permanently,” but that EY’s employees would still need to travel for business so the firm would “need to buy some offsets as well to be net zero and to be negative.”
Buying carbon offsets is a method that companies can use to compensate for their own emissions by investing in other environmental projects.
Di Sibio said EY had modeled how its business would operate going forward, which included factoring in a year where business travel would be high immediately after the pandemic because of pent-up demand.
However, he said that following those 12 months, EY expected business travel to re-adjust to a “new normal,” which would see the firm slashing “non-client travel” by half. For example, if a senior employee typically traveled for four in-person meetings a year, they would be expected to reduce that to two physical and two virtual meetings, Di Sibio explained.
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