Tax transparency debate moves center stage
Published date: 30 May 2022
Amazon resolution highlights demands for accountability on tax
A group of investors put forward a shareholder resolution at the Amazon AGM last week, calling for the company to disclose its tax affairs in line with GRI 207: Tax – the globally applicable standard for country-by-country tax reporting.
This historic first took place after the US Securities & Exchange Commission (SEC) sided with shareholders in allowing the motion to progress, ruling that tax transcends ordinary business matters. While the vote did not pass, it was backed by 21% of independent shareholders, including Norges Bank, Legal & General Asset Management, and Morningstar Sustainalytics.
The request for Amazon to adopt GRI 207 follows a succession of multinational organizations who are now voluntarily reporting using the GRI Tax Standard – including Allianz, Anglo American, BP, Credit Suisse, Deutsche Bank, Enel, Lukoil, Nestlé, NN Group, Novartis, Orsted, Phillips, Publicis Groupe, SAP, Swiss Re, UBS, Unibanco, Visa, Volkswagen, and Zurich Insurance.
Eelco van der Enden, GRI CEO, said:
“It is highly significant to see that major investors are putting pressure in this way on large business to be transparent about how much and where they pay their taxes. Since we launched the GRI Tax Standard in 2019 – providing the first global reporting standard for tax transparency – the discourse around tax has evolved, from being centered on only legal and financial issues to recognition that tax is a crucial contributor towards sustainable development.
Many stakeholders are actively demanding that companies do more to disclose their tax practices. In addition to investor-led pressure, we are also seeing civil society led initiatives, such as the recently published draft UN Tax Convention Bill. Meanwhile, action from the OECD and European Union is expected to bring further requirements for businesses to take tax reporting more seriously.
While the Amazon proposal on tax did not carry, the wider debate will not diminish. Indeed, the momentum towards investor and other stakeholder interest in companies impacts – on the economy, environment and people – is growing. That is why we continue to be a strong advocate for transparency on tax and other sustainability issues, as enabled by the GRI Standards.”
A recent edition of The GRI Perspective – We need to talk about tax – explored the growing relevance of tax as an ESG metric, and the rationale for companies to voluntarily disclose on the topic through their sustainability reporting.
GRI developed a topic Standard on Tax in recognition of the vital role tax contributions have on sustainable development. Developed by a multi-stakeholder expert group, GRI 207 encompasses country-by-country tax reporting, alongside tax strategy, governance and risk management.
The GRI Academy offers a training course on GRI 207, to equip reporting organizations and business practitioners with its features.