Sustainable, inclusive economies depend on fair, effective tax systems, and tax is one of the primary ways in which companies can contribute positively to the societies in which they operate. Companies that sign up to The B Team Responsible Tax Principles (“the Principles”) acknowledge this, and recognize that since tax is so fundamental to their social impact and license to operate, it is imperative that they demonstrate a responsible approach.

A new report monitoring the progress of signatories to the Principles has revealed that five years on from the launch, companies are performing well on average, with a fulfillment rate of 93%.

The aim of the Principles is to articulate ‘what good looks like.’ Launched in 2018, they have provided a blueprint for companies wishing to send a signal to their stakeholders that they are seeking to act transparently and with integrity. As of early 2024, 27 companies have formally endorsed the Principles, spanning numerous sectors and geographies, with different sizes and ownership structures. Raising standards and leadership takes time, and what works for one company will differ to the next. Therefore each signatory has charted its own unique path -- with the Principles as the foundation.

The report also highlighted that tax governance, compliance, and relations with tax authorities were also areas of strength among the majority of signatory companies. However, every company’s tax journey is unique and there is room for greater alignment with the Principles, including relating to tax incentives and aspects of tax transparency.

Amongst a group of peers - The B Team Responsible Tax Working Group - signatory companies have shared best practices, seeking to learn from each other whilst also taking inspiration from wider stakeholders such as investors, civil society organizations and international institutions. This forum for engagement has supported many companies to make significant strides.

In 2023 - five years on from the launch of the Principles - companies also identified the need to reflect and take stock. How were they currently performing against the Principles, individually and as a group? How far along the journey had they traveled, and how far did they still have to go? What else could they learn from each other? What are the common or shared challenges, which they might collectively seek to overcome? And -- crucially -- how could they demonstrate accountability, by showing that their commitment to responsible tax was matched by action?

In an initial attempt to answer some of these questions, 20 signatory companies participated in an accountability exercise. Supported by The B Team, they embarked on a process of self-assessment, peer review and engagement, with a view to creating a snapshot of their performance against the Responsible Tax Principles, and a benchmark from which to build. Today, The B Team is publishing the findings of that process, including aggregate data, key learnings, and company case studies.

The report highlighted:

• On the whole, companies are performing well against the Principles: the average fulfillment rate was 93%. Areas of particular strength include tax governance, compliance, and relations with tax authorities.
• However the picture is not uniform: some of the Principles presented a challenge to some companies, including some of those relating to tax incentives and - in particular - aspects of tax transparency.
• While companies found the process of self-assessment and peer review to be useful, many felt that the main value derived from participation in this exercise was to be found in the discussion with their peers. The view from outside a company can differ from the view inside, and the sharing of new, external perspectives presented companies with welcomed challenges and inspiration, as well as promoting deeper reflection.
• Five of the companies that took part in this process - A.P Moller-Maersk, bp, Enel, Ingka Group (IKEA Retail) and TotalEnergies - share further reflections and learnings in the report.

In 2024, The B Team initiated a second round of this accountability exercise, with a view to tracking progress against an established benchmark. Many companies are once again involved, and we look forward to sharing findings once again in 2025.

Both The B Team and the company participants welcome stakeholder reflections on the report. Please contact info@bteam.org if you would like to share.