The G20 finance ministers have endorsed a historic plan that will see multinational corporations' profits reallocated and a global minimum tax implemented.
The agreement, which was reached in July at the G7 summit in London and aimed at combating tax evasion, established a minimum global corporate tax rate of 15%.
"Membership endorsed the final political agreement to address the tax challenges arising from the digitalization of the economy and establish a more stable and fairer international tax system," said a statement released after the fourth meeting of G20 Finance Ministers and Central Bank Governors in Washington on Wednesday.
Last week, the Organization for Economic Co-operation and Development (OECD) said that 136 countries and jurisdictions had agreed to join an agreement to implement a two-pillar global tax reform plan by 2023.
The G20 also endorsed coordinating their efforts to tackle climate change, protect the environment, and promote a greener transition.
The ministers also urged different G20 work streams to act in synergy to deepen the analysis of the economic and distributional impact of mitigation policies and develop the most appropriate policy mix to move towards low greenhouse gas emission economies.
"Such mix should include investment in sustainable infrastructure and innovative technologies, as well as fiscal, market and regulatory tools, including carbon pricing mechanisms, to support clean energy transitions," the statement said.
Sustainable finance is at the heart of promoting the transition towards greener economies and societies in line with the 2030 Agenda for Sustainable Development and the Paris climate accord, it said.