Growing trend towards tax reporting as sustainability topic
Reporting on tax as a sustainability topic by major multinational companies is a growing trend but depth of disclosure is often lacking, according to new research from Global Reporting Initiative (GRI).
The research, carried out with support from Deloitte Netherlands, revealed that a quarter of the 1,000 largest companies in the world use GRI 207 – the leading global standard for tax transparency – in their sustainability reporting.
A majority of the companies disclose (all or partly) their approach to tax (73%), tax governance (56%), and stakeholder engagement (54%), while only a minority (22%) include country-by-country tax reporting.
The new analysis looks at reporting trends among 71 companies that referred to all four of the GRI 207 disclosures in their report: approach to tax, tax governance, stakeholder engagement, and country-by-country reporting.
It found that Europe is the leading region when it comes to disclosing on GRI 207 requirements (62%), significantly higher than the Americas (28%) or Asia Pacific (21%). GRI 207 disclosures are most widely applied by companies in oil & gas (67%), consumer goods & retail (57%), and energy & utilities (52%) – while at the other end of the scale is food & beverages, food retailers, electronics & technology (all 18%).
Bastian Buck, GRI chief standards officer, said: “It is encouraging that hundreds of companies around the world use GRI 207 to report their tax-related impacts in way that aligns with our global best practice. We acknowledge that reporting is a journey and applaud these leading companies that have taken the decision to make their tax practices more transparent. The next step is more comprehensive and detailed reporting, which fully reflects how businesses contribute in the countries and communities where they operate.”
He added: “Companies that align with the disclosures in GRI 207 will be best placed not only to respond to the needs of their stakeholders, investors included, but also to get ahead of legislative changes that are increasing requirements for tax transparency. This includes Australia’s recently launched country-by-country reporting rules, which are based on the GRI Tax Standard.”
