The tax transparency proposal filed by the Greater Manchester Pension Fund (GMPF), along with Etica Funds and the Missionary Oblates, for Cisco Systems will be put to a vote of shareholders at the company’s annual general meeting (AGM).

The shareholder proposal calls for the company to publish a tax transparency report aligned with the GRI Tax Standard, including a tax strategy and a country-by-country breakdown of tax and financial information.

This is a watershed moment for investor engagement on tax transparency, the Pensions & Investment Research Consultants (PIRC) announced.

Together with the similar proposal filed at Microsoft in June, it is the first time that a tax transparency proposal has not been challenged in the US and comes on the back of’s unsuccessful Securities and Exchange Commission (SEC) challenge earlier in the year.

Cisco’s opposition statement reveals a company that is out-of-step with leading companies globally, PIRC stated. Anglo American, Philips, Randstad, Vodafone, Royal Dutch Shell, NN Group, Ørsted and Newmont are just some of the companies already reporting in line with the GRI Tax Standard and publishing full country-by-country reports of their tax and financial information.

A review of the DAX40 found over 70% of companies reviewed provided reporting that was compliant with at least one of the GRI indicators. A Dutch NGO found that 8% of the largest listed Dutch companies report against all or almost all GRI indicators. This research found that 20% of the largest listed Dutch companies published full country-by-country reporting in 2021, up from 13% in 2020.

With the GRI Tax Standard only coming into effect on 1 January 2021, these numbers are set to increase in the latest round of company reporting, further isolating laggards like Cisco and Microsoft, PIRC continued.

Katie Hepworth, responsible tax lead at PIRC, said: “Cisco’s opposition statement puts forward the same tired arguments against greater tax transparency and shows a company that is increasingly out-of-step with investor expectations globally. Rather than align itself with global leaders and voluntarily disclose tax and financial information for each country of operation, it has instead chosen to continue on a path of secrecy.

“Cisco’s tech peers have been repeatedly singled out by global governments for their aggressive approach to tax avoidance; they should not be held up as exemplars of reasonable tax disclosure.

She noted that in light of historic reforms to the global taxation system to ensure that companies fairly contribute to the revenue of the countries in which they operate and earn profit, companies must, at a minimum, provide investors with the tools to assess the risks of company tax strategies.

“Cisco only provides an aggregated worldwide figure of their taxes paid, leaving investors unable to properly analyse where the company is paying its taxes, and the risks associated with the company’s tax strategy and the governance frameworks that it has in place to monitor and mitigate these risks,” she added.

Gerald Cooney, chair of the GMPF, said: “We have supported this shareholder resolution since it was filed earlier this year, and appreciate the importance of providing investors with important and relevant financial information. Having seen Amazon try to throw out our proposal, it is pleasing to see Cisco accept the need to put this to a vote.”

He said there were “serious concerns” regarding the company’s financial practices, which, with increasing global policies on tax transparency, could pose risks for investors like GMPF.

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