ActionAid report has revealed that top companies in the fossil fuels and financial sector, often funding fossil fuel use, made over $420 billion in windfall profits in the 24 months preceding July 2023.
ActionAid Secretary-General Arthur Larok said acccording to the report, a tax of 90 per cent on these windfall profits could generate as much as $382 billion in revenue, an amount that could be spent on public services such as education, or climate action.
ActionAid calls for urgent introduction of windfall profits taxes.
ActionAid report also revealed that thirty-six top companies in the fossil fuel industry and their funders made over $420 billion in ‘surplus’ profits in July 2021.
According to the report shows that taxing these extraordinary profits, referred to as windfall profits, could generate funds to boost public spending, especially for key areas such as education and climate action. Windfall profits are often attributed to external context changes and are considered a ‘surplus’ above the regular and expected profits.
Arthur Larok said “A tax of 90% on the windfall profits of these 36 firms could generate as much as $382 billion in revenue shows the report launched as world leaders meet at Davos for the World Economic Forum. This amount is almost 20 times more than the $21 billion provided by donors for climate adaptation in 2021.
ActionAid’s research is an analysis of the profits of the top 14 fossil fuel companies and top 22 financial corporations by value on the stock market.
“In the 24 months to July 2023, these firms made US$1,218 billion in profits. Windfall profits from this amount come to $425 billion. Fossil fuel company profits in the 12 months before July 2023 were up by an astounding 278% compared to the average in the period between 2017/8 and 2020/1.
