Tax Transparency (GRI 207) — Why investors care and what good looks like.

Tax has become one of the defining issues in the ESG debate, and the GRI 207 standard on tax transparency has brought this topic into sharper focus for both companies and investors. At its core, GRI 207 requires organizations to disclose their approach to tax governance, strategy, and risk management, as well as country-by-country reporting of revenues, profits, employees, and taxes paid. For investors, this information matters because aggressive tax practices are increasingly seen not just as a compliance or reputational issue, but as a signal of broader governance quality. Companies that rely heavily on tax havens or opaque structures may face heightened regulatory, political, and social risks that can undermine long-term value.

From the investor perspective, good tax transparency is a proxy for trust. A company that pays fair taxes in the jurisdictions where it operates demonstrates alignment with the social contract and reduces the risk of backlash from regulators, civil society, and consumers. In contrast, companies with inconsistent or vague disclosures risk being excluded from ESG-focused portfolios, or targeted by activist campaigns that link aggressive tax planning to inequality or erosion of public services. Investors increasingly want to see not only how much tax is paid, but also the governance framework behind it—board oversight, alignment with business models, and integration into broader sustainability strategies.

What does “good” look like under GRI 207? Leading companies go beyond boilerplate policies and publish clear, granular data that reconciles group-level profits with tax contributions across key markets. They disclose the rationale for their tax structures, provide assurance over the numbers, and explain how tax risk is managed at the board and executive level. Some even integrate tax into their broader ESG and stakeholder narratives, framing it as part of their contribution to sustainable development. By doing so, they move tax from being a potential reputational liability to being a positive differentiator in investor relations.

For issuers, adopting GRI 207 is not just about compliance—it is about building credibility. As ESG reporting frameworks converge and investor scrutiny intensifies, transparent and responsible tax disclosure is becoming a marker of governance quality on par with anti-corruption, data privacy, or climate risk management. The message is clear: in a market where investors are looking for reliable indicators of long-term resilience, tax transparency is no longer optional; it is a key piece of the ESG puzzle.