87 Investors Call on Regulators to Require Public Country-by-Country Reporting for U.S.-Listed Multinationals

WASHINGTON, DC – On Wednesday, FACT filed a petition on behalf of 87 investors with more than $2.3 trillion in assets under management calling on the U.S. Securities and Exchange Commission (SEC) to require greater tax transparency from U.S.-listed companies.

“When multinational companies gamble on risky tax-planning strategies, it’s their investors that ultimately pay the price,” said Ian Gary, executive director of the FACT Coalition. “The message sent by today’s petition is clear. The SEC must act to give investors the information they need to determine whether these companies are building sustainable, long term earnings based on genuine competitive advantage, or prioritizing short-term profits through aggressive tax avoidance.”

The petition – signed by diverse investors including the Office of the New York City Comptroller, Boston Common Asset Management, AFL-CIO, the Local Authority Pension Fund Forum, and Ethos Engagement Pool International – calls on the SEC to require U.S.-listed companies to publish basic tax and other financial information for each country in which they operate, called public country-by-country reporting (CbCR). While there have been various investor-led efforts to improve multinational tax transparency in recent years – including through new accounting rules completed last year by the U.S. Financial Accounting Standards Board (FASB) – today’s petition is the first of its kind to demand full, mandatory public CbCR from U.S.-listed multinationals.

The stakes for investors are high. The urgent need for greater tax transparency – brought into stark contrast by high-profile, ongoing transfer pricing cases against household names including Apple, Microsoft, Coca Cola, and Amgen – has spurred a wave of direct, company-level advocacy from investors in recent years. In 2022, investors in global retail and tech-giant Amazon led the first ever shareholder resolution calling for country-by-country tax reporting, with 21 percent of independent shareholders voting in favor. Investors have subsequently brought similar resolutions at Microsoft, Cisco, ConocoPhillips,  ExxonMobil, and other major U.S.-based multinational corporations. 

This burgeoning investor demand has been heeded by lawmakers in jurisdictions around the globe, with public CbCR quickly becoming the norm for multinational tax transparency. In 2021, the European Union finalized a limited public CbCR regime for major multinationals with European operations, which is now coming into effect. Meanwhile, last month Australia introduced legislation to require country-level disclosures in line with the world-leading Global Reporting Initiative (GRI) standard.

“As headquarters to the most major multinational corporations, and as a market for thousands more, the U.S. has an opportunity to lead a sea-change in global tax transparency,” said FACT policy director Zorka Milin. “Decisive action by the SEC to require public tax disclosures will not only help to protect investors, but also promote a fairer, more robust global market where success is based on innovation, not tax dodging and accounting gimmicks. The SEC should listen to investors and write a proposal to require public country-by-country reporting for U.S.-listed companies.”

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Notes to the Editor: 

• Read the full petition signed by 87 investors with more than $2.32 trillion in assets under management, as filed with the SEC, here.
• The petition’s signatories include major institutional and private investors from the U.S., Europe, and Australia, in addition to international and domestic labor organizations. Notable signatories include the Office of the New York City Comptroller, ABP, Dana Investment Advisors, KLP, Ethos Engagement Pool International, the Local Authority Pension Fund Forum (LAPFF), Sampension, Brunel Pension Partnership, Boston Common Asset Management, Toniic, Mirova, AFL-CIO, AFSCME, and USW.
• For more information on the need for public CbCR, including how public data would help investors assess various geopolitical, supply chain, and tax reform and enforcement risks, see FACT’s 2022 report, “A Material Concern: The Investor Case for Public Country-by-Country Tax Reporting,” and accompanying FACT Sheet.
• A bill that would require the SEC to introduce new public country-by-country reporting rules for U.S.-listed multinationals, the Disclosure of Tax Havens and Offshoring Act (S.638), was reintroduced in the Senate last year. The bill previously passed the House during the 117th Congress (H.R. 3007 / S. 1545), and has been endorsed by investors with more than $2.9 trillion in assets under management.
• For more information on Australia’s country-by-country reporting legislation, see FACT’s latest official comments here.