Quarter of public companies using GRI’s Tax Standard
Standard to help with incoming regulations such as Corporate Sustainability Reporting Directive
A quarter (26%) of the 1,000 largest public companies worldwide are voluntarily using the Global Reporting Initiative (GRI) Tax Standard (GRI 207) in their sustainability report, according to new analysis from GRI. It said use of GRI 207 to meet tax disclosure requirements will help businesses comply with incoming regulations, such as the EU’s Corporate Sustainability Reporting Directive and Taxonomy Regulation, while addressing perceptions of greenwashing.
GRI’s report, Global adoption trends for the GRI Tax Standard, charts citations of GRI 207, which was launched in December 2019 as the first and only global standard for public, country-by-country reporting on tax, alongside tax strategy and governance. It found that policymakers and influential stakeholders are increasingly looking to GRI 207 when articulating tax transparency expectations.
Dave Reubzaet, director tax & sustainability at Deloitte, said: “The fast and widespread global adoption of GRI 207, by companies and other stakeholders, can be seen as evidence that this standard addresses a variety of needs and is in line with the international trend where the worlds of sustainability and tax meet. GRI 207 facilitates meaningful discussions in this field. For companies, GRI 207 also helps to move away from ‘self-made’ tax reporting and apply a recognised multi-stakeholder standard, which is applicable in key regulations, including the EU Corporate Sustainability Reporting Directive. This will certainly drive further adoption in the coming years.”
Key findings in the research paper include:
- At 34%, Europe is the leading region where headquartered companies are referencing GRI 207, followed by Asia (23%) and the Americas (19%).
- At the national level, Switzerland leads the way, with 52% of the companies citing GRI 207, ahead of Italy (43%), Russia (40%), Germany and Spain (both 38%).
- Mentions of the Standard per disclosure are fairly equal: 207-1 Approach to tax (28%); 207-2 Tax governance, control and risk management (26%); 207-3 Stakeholder engagement (23%); 207-4 Country-by-country reporting (22%).
Eelco van der Enden, CEO of GRI, said: “When we launched the Tax Standard in 2019, it was well received by business, investors and society. Tax data provide useful insights on the quality of profits, risk appetite and a company’s vision tax. This is highly relevant for assessing the contribution that organisations make in the societies where they operate – information that investors and other stakeholders continue to demand. It’s therefore hugely encouraging that, in less than five years, GRI 207 has made such strong headway. Not only are more than a quarter of large companies looking to our standard to inform how they communicate about tax, it is also shaping the global debate on tax.”
He added: “Given the need for internationally comparable data on tax, driven by both voluntary and mandatory mechanisms, I fully expect continued alignment behind GRI 207 and encourage regulators not to deviate from GRI 207 when it comes to introducing tax transparency regulations. As Nobel laureate Joseph Stiglitz said, GRI 207 ‘is regarded as the gold standard. It is supported by large global corporations and some of the world’s biggest investors’.”
GRI said GRI 207 is helping create a global baseline on tax transparency, which is needed to reduce the compliance burden and provide stakeholders with universal and comparable information.
