Speaking late last month, U.S. President Joe Biden threatened to pursue higher taxes on oil company profits if industry giants do not work to cut gas prices.
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Oxfam on Monday filed shareholder resolutions against U.S. oil giants Exxon Mobil, Chevron and ConocoPhillips, saying a lack of transparency over their global tax practices poses a material risk for long-term investors.
The international relief charity said the companies’ tax practices undermine the public’s interest in a fair tax system — especially in Global South countries “with the greatest tax revenue needs.”
“Exxon, Chevron, and ConocoPhillips’s threadbare tax disclosures leave investors, watchdog groups, and the general public in the dark about the companies’ secretive tax practices,” Daniel Mulé, policy lead on extractive industries and tax at Oxfam America, said in a statement.
ConocoPhillips confirmed it had received a shareholder proposal from Oxfam and would review it ahead of its annual general meeting in May next year. The company added that it “remains committed to following all applicable disclosure rules in the countries in which we operate.”
A spokesperson for Chevron said the company “complies with all applicable tax laws. Our approach to tax matches our efforts globally to conduct our business legally, responsibly, and with integrity.”
Exxon Mobil did not respond to a request for comment when contacted by CNBC.
It comes amid a broader push for greater tax transparency from large corporations, particularly as people around the world feel the squeeze of a cost-of-living crisis.
Oil majors have been repeatedly criticized for their global tax operations. And, in recent months, energy giants have faced growing calls for a windfall tax after raking in record-breaking profits thanks to a surge in the price of oil and gas following Russia’s invasion of Ukraine.
Speaking late last month, U.S. President Joe Biden threatened to pursue higher taxes on oil company profits if industry giants do not work to cut gas prices, accusing energy giants of “war profiteering.”
“Oil companies’ record profits today are not because they’re doing something new or innovative,” Biden said on Oct. 31. “Their profits are a windfall of war — the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe.”
Together, Exxon Mobil, Chevron and ConocoPhillips reported third-quarter profits in excess of $35 billion.
“Oil and gas companies frequently point to their contributions to the tax base in producer countries as a justification for their continued operations, particularly in poor countries, but secretive tax practices make it impossible to verify whether the companies actually contribute to shared prosperity,” Oxfam America’s Mulé said.
“If oil and gas projects are alleviating poverty, why hide the numbers?” he added.
Oxfam said the tax practices of Exxon Mobil, Chevron, and ConocoPhillips create a risk for investors who want to safeguard against potential reputational damage and the possibility of “shelling out millions due to lawsuits, blocked projects, and renegotiation of fiscal terms.”
To rectify this, Oxfam called on the companies to publish reports detailing their tax practices in line with the tax standard of the Global Reporting Initiative, which includes public country-by-country reporting of financial, tax and worker information.
A report from the Tax Justice Network published earlier this month showed that public country-by-country reporting could reduce tax revenue losses due to cross-border profit shifting by at least $89 billion.
Oxfam says the oil and gas sector is recognized as a particularly high-risk sector for corporate tax avoidance — and reaffirms the point that the burning of fossil fuels is the chief driver of the climate emergency.
Chevron last month reported its second-highest quarterly profit ever.
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“US extractive companies Hess and Newmont publish GRI-aligned tax reports, as do international oil companies including Shell, BP, and Total,” said Ian Gary, director of the Financial Accountability and Corporate Transparency Coalition, an international transparency advocacy group.
“Exxon, Chevron, and ConocoPhillips are seriously lagging behind their peers,” Gary said.
The resolutions were expected to be put to shareholders at Exxon Mobil, Chevron and ConocoPhillips at their annual general meetings in May next year.
“Shareholders need a full understanding of potential risks,” said Jason Ward, principal analyst at the Centre for International Corporate Tax Accountability and Research.
“Corporations should respect shareholders and lead the way to let the sunlight in,” he added.