Press Releases & Statements

SEC Stands with Investors

Agency Advances Amazon Shareholder Proposal for Country-by-Country Reporting

WASHINGTON, DC – The Financial Accountability and Corporate Transparency (FACT) Coalition applauds the Securities and Exchange Commission (SEC) for standing with investors and advancing an, Inc. shareholder proposal asking the company to voluntarily engage in public country-by-country reporting (PCbCR) in line with standards promulgated by the Global Reporting Initiative, a leading standard for transparent corporate reporting.

“This precedent-setting ruling confirms that the SEC is concerned with protecting investors and public markets,” said Ian Gary, FACT’s Executive Director. “Building off its decision to heed the calls of Amazon shareholders, FACT now calls on the SEC to use its clear rulemaking authority to advance country-by-country reporting for large, public multinational companies within the year.” 

Amazon sought to reject the shareholder proposal and avoid a vote on the matter in connection with the tech giant’s annual meeting. However, the SEC did not ignore Amazon shareholders with nearly $4 trillion in assets calling for greater financial transparency, and ruled that the proposal “transcends ordinary business matters.” In the past year, investors have been joined by Members of Congress in calling for PCbCR by companies.

“We welcome this historic ruling on increased tax transparency by the SEC and applaud the growing demand by investors for reliable material tax information. Far too many companies are continuing to shirk their responsibility to contribute their fair share to the promotion of  the common good and the protection of the planet for future generations,” said Fr. Séamus Finn of the Missionary Oblates of Mary Immaculate, one of the filers of the shareholder proposal.

The ruling is particularly welcome following the recent decision by the Financial Accounting Standards Board (FASB) to narrow the scope of its income tax disclosure review to exclude the possibility of adopting PCbCR for public multinational companies. FASB is an independent body that determines U.S. generally accepted accounting principles (GAAP), subject to the SEC’s authority to determine public company accounting requirements.  

“It’s like FASB has pressed the mute button on investors with trillions of dollars in assets who have repeatedly said they need more information to assess risks stemming from aggressive tax planning and international operations as they make decisions about where to allocate capital,” Gary said. “It’s nearly impossible to reconcile FASB’s recent decision to ignore clear investor calls for public reporting with FASB’s stated mission to provide useful information to investors and other users of financial reports.” 

Previously, FASB sought input on whether investors and other users of financial statements would benefit from clearer disaggregation of information relating to international operations, assets, personnel and taxes paid on a country-by-country basis. Large multinationals already report this information to tax authorities under an OECD agreement. Nonetheless, in public filings, multinational companies may report oversea revenues, investments and taxes in oversimplified, aggregated amounts. 

“We should be focused on investors,” indicated one FASB Board member in voting to narrow the scope of the FASB review, implying that PCbCR is a public policy initiative and not primarily an investor concern. Investors with $2.9 trillion in assets under management (AUM) commented on FASB’s most recent public consultation confirming the need for PCbCR. 

“Fortunately, FASB’s folly can be corrected by the SEC,” said Gary. 

Recent global conflict spurred by Russia’s illegal invasion of Ukraine has highlighted the lack of information that investors have with respect to public multinational companies’ offshore operations.  

“Investors finding out that they face monumental geopolitical risks after the fact is in direct conflict with supporting efficient capital allocation,” said Gary. Current disclosure requirements would not necessarily require that any details with respect to operations or investments in, or taxes paid to, Russia or other potential adversaries would be separately disclosed.


Notes to the Editor

  1. The SEC ruling can be found here
  2. The Amazon shareholder proposal was filed by the Greater Manchester Pension Fund (GMPF), which is the UK’s biggest local government pension fund, and the Oblate International Pastoral Investment Trust.
  3. FASB’s March 23 decision can be found here. FASB’s mission statement can be found here
  4. In September 2021, investors with $2.9 trillion AUM encouraged FASB to adopt PCbCR. 
  5. The letter signed by investors with $3.6 trillion AUM regarding the Amazon annual proxy is here. 
  6. Last year, the House of Representatives passed the Disclosure of Tax Havens and Offshoring Act. This legislation would require the SEC to mandate PCbCR by publicly listed companies reporting to the SEC. Investors with trillions of dollars in assets also supported its adoption by Congress.