Oxfam America, part of the global Oxfam organization fighting inequality to end poverty and injustice, filed shareholder resolutions urging oil giants ExxonMobil, Chevron, and ConocoPhillips to end their secretive tax practices and adopt tax transparency measures in line with the tax standard of the Global Reporting Initiative (GRI), the world’s most utilized corporate reporting framework. The companies’ current lack of transparency, Oxfam argues, creates material legal, regulatory, and reputational risks for long-term investors and undermines the public’s interest in a fair tax system, especially in Global South countries with the greatest tax revenue needs.
Oxfam’s resolutions ask the companies to publish regular tax transparency reports that include public country-by-country reporting (pCbCR) of certain financial information, including company revenues, profits and losses, and tax payments within each jurisdiction – critical information to understanding the risks of profit shifting and tax avoidance. Co-filers include KLP, Nordea, Folksam, Benedictine Sisters of Baltimore, Benedictine Sisters of Mount St. Scholastica, and the Province of Saint Joseph of the Capuchin Order.
“Make no mistake: the failure of Exxon, Chevron, and ConocoPhillips to publicly disclose their disaggregated tax data jeopardizes the returns and reputations of long-term shareholders,” said Aubrey Menard, Senior Policy Advisor on Extractive Industries Transparency at Oxfam America. “This kind of financial secrecy hampers scrutiny of possible tax avoidance and creates legal, regulatory, and reputational risks for investors – not to mention the risk of having to shell out millions for lawsuits, blocked projects, and the renegotiation of fiscal terms as a result. These companies owe it to their investors to commit to public country-by-country reporting.”
A July 2023 report shows that pCbCR could reduce tax revenue losses due to cross-border profit shifting by $311 billion. The oil and gas industries are particularly high-risk sectors for corporate tax avoidance, in part due to their high reliance on related-party transactions. Emissions from oil and gas are also fueling the climate crisis.
Public country-by-country reporting allows companies to get out ahead of potential regulatory changes and can help to show whether companies are paying taxes in line with their economic activity in every country where they operate. Nevertheless, despite repeated requests from Oxfam and large asset managers like Nordea and KLP, Exxon, Chevron, and ConocoPhillips have declined to release a tax report in line with the GRI standard.
This marks the second year in a row that Oxfam America has filed similar resolutions with these oil and gas supermajors.
“There’s more than shareholders’ peace of mind at stake here. The public has a vested interest in ensuring the maintenance of a fair tax system at the international level,” said Menard. “These oil and gas companies operate at large scale in lower-income producer countries, but there are virtually no legitimate mechanisms that prevent secretive tax practices and allow investors and the public to verify whether or not companies actually contribute to the local economies and public revenues where they’re operating. Companies like Exxon, Chevron, and ConocoPhillips are clearly desperate to avoid public scrutiny, and that, of course, begs the question: what could they be hiding?”
The resolutions are expected to be put to a shareholder vote at ExxonMobil, Chevron, and ConocoPhillips’ annual general meetings in May 2024.
As a shareholder that advocates for responsible corporate governance, Oxfam challenges companies for their lack of transparency and their broader lack of social responsibility—including promoting climate disinformation and lobbying against extractive industry transparency measures—and uses its shares in the companies to hold them to account.
Oxfam is a global organization that fights inequality to end poverty and injustice. We offer lifesaving support in times of crisis and advocate for economic justice, gender equality, and climate action. We demand equal rights and equal treatment so that everyone can thrive, not just survive. The future is equal. Join us at oxfamamerica.org.
/ENDS
Notes to editors:
The full text of the resolutions is downloadable here: ExxonMobil, Chevron, ConocoPhillips
Oxfam’s shares in these companies are funded by a past donation dedicated specifically to the purpose of shareholder engagement. Oxfam did not purchase its holdings in Chevron, ConocoPhillips, or ExxonMobil with money from public donations.