Tax footprint as environmental, social and governance dimension: a conceptual insight for climate policy coherence

Purpose This paper aims to address the integrity gap in current environmental, social and governance (ESG) frameworks regarding the divide between firms’ environmental performance and their fiscal behaviour. Design/methodology/approach This study uses a critical-theorist research design underpinned by a systematic literature review methodology to develop a novel conceptual model, using the theory-building approach, which links tax footprint to climate policy coherence as well as how corporate fiscal commitment affects ESG integrity and legitimacy, using the lens of institutional, legitimacy and political economy theories. It integrates existing knowledge and identifies gaps that warrant new theoretical constructs. Findings This conceptual paper finds that a firm’s tax footprint encourages corporate fiscal commitment and climate policy coherence. Tax footprint drives climate policy coherence through corporate fiscal commitment. Greater corporate fiscal commitment strengthens ESG integrity and legitimacy. The findings imply that without a clear application of fiscal aspects, the ESG frameworks would unintentionally support greenwashing and cause policy incoherence. The proposed model explains how open tax activities strengthen corporate credibility and increase the capacity of the population to access climate finance. Research limitations/implications The proposed model reveals five theoretical suppositions that can undergo empirical testing in subsequent research. Practical implications Firms should align their tax behaviours with climate goals to reinforce stakeholder trust and governance integrity. Regulators and standard setters should embed fiscal indicators, such as tax footprint, in ESG reporting to enhance accountability in sustainable finance. ESG rating agencies should incorporate fiscal legitimacy as a distinct evaluation pillar. Governments negotiating climate finance commitments should recognise that corporate fiscal responsibility directly affects national capacity to fund adaptation and mitigation. Social implications This study enhances public resource availability for climate action. It exposes how firms can appear environmentally responsible while depleting tax revenues through fiscal opacity. It highlights direct harm to citizens who depend on public funding for education, healthcare and climate adaptation. The proposed fiscal legitimacy framework strengthens the social contract between communities and firms. Originality/value This conceptual study challenges existing studies that treat tax behaviour as an outcome or a moderating variable. It introduces “fiscal legitimacy” as a new theoretical construct, arguing that tax transparency ought to be an autonomous dimension of ESG. The study goes beyond practical guidance on tax transparency and develops a theoretical conceptual model that positions tax behaviour as a prerequisite for climate policy coherence under Sustainable Development Goal 13.