Danish labour market pension fund Sampension and the independent pension funds it runs are tightening tax scrutiny of firms they invest in, with the joint management operation now requiring companies to report the tax they have paid by region, rather than submitting a global total.
The pension fund community – which includes Sampension Liv, the Architects’ Pension Fund, the Pension Fund for Agricultural Academics and Veterinary Surgeons and ISP Pension – said the move aimed to ensure all companies were paying the taxes they should.
Sampension said it had been making the new demand in “improvement dialogues” with corporate giants such as BMW, BP and, most recently, Belgian brewery giant AB InBev.
Jesper Nørgaard, deputy CIO at Sampension, said: “In the dialogue with AB InBev, we have explained our desire for the company to strengthen its tax reporting by reporting its tax payments regionally rather than reporting an overall global figure.”
He added that the pension fund had also told AB InBev that it could be more transparent about its tax practices and policies.
Increased transparency regarding companies’ tax payments would not only help investors build a clearer picture of a company’s financial situation, but it would also encourage other firms to do the same, Nørgaard said.
Sampension said its demand for increased transparency around tax was based on the objectives of the United Nation’s sustainable development goals (SGDs), adding that any firms judged to be insufficiently integrating these into their operations would be subject to improvement dialogues.
“We don’t initiate improvement dialogues because we suspect that our guidelines are being violated, and unlike the critical dialogues, the improvement dialogues do not lead directly to a decision on possible exclusion,” said Nørgaard.
Unlisted investments would be subject to the same increased scrutiny as Sampension’s listed shares, he said.
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