For Immediate Release
Phone: +1 202.683.4816
Fax: +1 202.683.4849
Sustainability Panel Finalizes Public Tax Transparency Standard
New Rule from Global Reporting Initiative Could Bring Public Country-by-Country Reporting of Taxes, Profits, Revenues, and Employees to Thousands of Companies.
U.S. Launch Event to be Held at Noon EST, on Thursday, December 5th in Room SVC-200 of the U.S. Capitol Visitor Center in Washington.
WASHINGTON - A global sustainability standard-setting body finalized a proposal on Thursday to have multinational companies publicly disclose basic financial information on a country-by-country basis—a move that was praised by transparency advocates. 75 percent of the world’s largest companies that report their sustainability results use the GRI Sustainability Reporting Standards. Internationally, 62 countries have policies that reference or require the use of the GRI Standards for sustainability reporting—which includes capital market regulations in 45 countries. In the United States, 78 percent of the companies on the Dow Jones Industrial Average use GRI Standards for ESG disclosure.
The Financial Accountability and Corporate Transparency (FACT) Coalition, in partnership with GRI, AFSCME, and Oxfam America, is holding a launch event for journalists and other interested parties at noon EST on Thursday in Room SVC-200 of the U.S. Capitol Visitor Center in Washington, featuring remarks from Senator Chris Van Hollen (D-MD), ranking member of the Senate Banking Subcommittee on Securities, Insurance, and Investment; Eric Hespenheide, chairman of GRI; David Gonzales, vice president at Moody’s; Elise Bean, former staff director of the Senate Permanent Subcommittee on Investigations; among others.
GRI’s Tax Standard was developed by a multi-stakeholder technical committee consisting of representatives from PricewaterhouseCoopers, MFS Investment Management, Vodafone PLC, and the Tax Justice Network, among others. According to GRI, the proposal received very strong support from investors during the comment period.
Gary Kalman, the executive director of the FACT Coalition, issued the following statement:
“This new standard is the clearest and most significant recognition to date of the global trend toward tax transparency for multinational companies. The standard is both necessary and balanced.
“More nations are scrutinizing and cracking down on profit shifting schemes and other aggressive tax avoidance strategies. The resulting changes to tax planning and growing liabilities mean rising risk for investors. Company valuation estimates have varied by as much as 120% because of uncertain offshore tax liabilities. Determining company value is a textbook definition of materiality.
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“The hunger for this information is reflected in the fact that the Global Reporting Initiative (GRI) received more comments from investors on this issue than on any other in their history. We are also seeing growing interest in the U.S. and the European Union in tax transparency. Even chief executives of companies say they expect this type of tax transparency to be the norm in the near future.
“The multi-stakeholder process that produced this standard ensures that the information is helpful to investors while workable for companies. As a result, GRI has done something that is somewhat rare: they have produced a standard that is both relatively straight forward and enormously impactful.
“The required information is already known to company management and, in various forms, to national tax authorities. Prior to the release and adoption of this standard, the only ones left in the dark were the investors putting their money at risk. This standard rights that wrong. It levels the playing field for investors and analysts who need the information to properly assess risk.
“In numerous discussions, we have heard that investors don’t currently use much tax information in their risk models, but that’s not because it isn’t valuable, it’s because it does not exist in any public form. This standard would change that. We expect that, as companies adopt the standard, the information will quickly become an integral and routine part of investor risk analyses.
“We urge companies to quickly implement this standard and help make it the model for the transparency that will soon become common global practice.”
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Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition unites over 100 different civil society representatives from small business, anti-corruption, faith-based, government watchdog, human rights, investors, labor, public-interest, and international development organizations from across the ideological spectrum.
We seek an honest and fair international tax code, greater transparency in corporate ownership and operations, and commonsense policies to combat the facilitation of money laundering and other criminal activity by the financial system.