Supporting Statement: Tax transparency is increasingly important to investors. The PRI, representing investors with $89 trillion assets under management, states that, “For investors, tax risk is financially material at the individual asset level. With tightening regulations and shifting societal expectations, tax avoidance activities of multinational enterprises have attracted large fines and highlighted growing reputational, governance, and earnings risks.”1 Economic challenges have increased government concern about corporate tax avoidance, and 96% of US companies expect more tax disputes as governments become more rigorous in tax examinations.2 In 2021, 136 countries signed a global tax reform framework.3 The proposed Disclosure of Tax Havens and Offshoring Act, passed by the House of Representatives, would require public country-by-country reporting (CbCR) of financial (including tax) data by SEC-registered companies.4 Further, in November 2021, the European Union approved a directive to implement public CbCR for large multinationals operating there.5 In April 2023, the Australian government released draft legislation that would, if legislated, require CbCR for any large multinational doing business in Australia.6
ExxonMobil does not disclose revenues or profits in non-US markets, nor foreign tax payments, with adequately disaggregated data. This challenges investors’ ability to evaluate the risks of taxation reforms, or whether ExxonMobil engages in responsible tax practices that ensure long term value creation. Tax authorities across the globe have repeatedly challenged ExxonMobil's taxation approach, producing significant costs for the company.7 For example, ExxonMobil was recently issued a $215 million fine by Russian authorities for their Sakhalin 1 oil and gas project for alleged non-payment of back taxes.8
The GRI Standards are the world’s most utilized corporate reporting standard.9 The GRI Tax Standard - GRI 207 - is the first comprehensive, global standard for public tax disclosure. It includes four components. GRI 207-1, 207-2, and 207-3 require companies to disclose their approach to tax; their tax governance, control, and risk management; and their stakeholder engagement and management of concerns related to tax, respectively. 207-4 requires public CbCR of certain company financial information, including revenues, profits and losses, and tax payments within each jurisdiction.10 GRI 207 also recommends disclosing “industry-related and
other taxes or payments to governments.” Given the significance of other project-specific payments to governments in the oil and gas sector, GRI identifies disclosures of all significant project-level payments to governments as relevant for that sector in reporting under the Tax Standard.11
A GRI-aligned tax transparency report would bring ExxonMobil in line with peer companies – including many in the oil, gas, and mining industries12 – that report using GRI 207.13 ExxonMobil already reports CbCR information to OECD tax authorities privately, so any
increased burden is negligible.