Supporting Statement
Tax transparency is increasingly important to investors. The PRI, representing investors with $89 trillion assets under management, states, “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 96% of US companies expect more tax disputes as governments increase scrutiny over tax avoidance. 2
In 2021, 136 countries signed a global tax reform framework.3 National and regional-level agreements also demonstrate growing consensus around the importance of tax disclosures: the proposed Disclosure of Tax Havens and Offshoring Act, passed by the House of Representatives, requires public country-bycountry reporting (CbCR) of financial (including tax) data by SEC-registered companies.4
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 requires CbCR for any large multinational doing business in Australia.6 Chevron does not disclose foreign tax payments, or revenues or profits abroad with adequately disaggregated data. This challenges investors’ ability to evaluate the risks of taxation reforms, or whether Chevron’s tax practices ensure long term value creation. Tax authorities have repeatedly challenged Chevron's taxation approach, producing significant costs for the company.7 For example, in 2017, an Australian court found that Chevron used offshore entities to underpay taxes and ordered Chevron to pay
$268 million.8 Despite releasing a report on approach to tax,9 Chevron is retreating from its transparency commitments. This includes withdrawing from the Extractive Industries Transparency Initiative, limiting information about payments to governments.10
The GRI Standards are the world’s most utilized corporate reporting standard.11 The GRI Tax Standard 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 governance, control, and risk management; stakeholder engagement; and management of tax concerns. 207-4 requires CbCR of financial information including revenues, profits and losses, and tax payments in each jurisdiction.12 GRI207 also re commends disclosing “industry-related and other taxes or payments to governments.” A GRI-compliant tax transparency report would bring Chevron in line with peer companies – including many in the oil, gas, and mining industries13 – who report using GRI 207.14 Chevron already reports CbCR information to OECD tax authorities privately, so any increased burden is negligible.