Thumbs Down, Facebook, updated
Facebook stock plummeted in the weeks after Canadian whistle-blower Chris Wylie reported that Cambridge Analytica misused the personal information of tens of millions of Facebook users. #DeleteFacebook was trending on Twitter, shareholders are filing lawsuits and authorities in the US and UK questioned Zuckerberg.
We own Facebook stock in three of our funds.
At this stage, the ESG Services team is undertaking three activities to help address risks at Facebook and other internet and technology companies:
First, we've launched a formal, deeper investigation into Facebook's ability to navigate the ethics around data privacy and — perhaps most significantly — assess the impact of its business model on society.
Second, alongside other responsible investors we're looking into how we can advance the right to online privacy. The Ranking Digital Rights Index published its 2018 benchmarking of IT and Telecom companies in April, and ESG Services was present at its launch.
Third, we're currently leading engagements with several companies, including Amazon and Verizon, on cyber security and responsible data stewardship. We are also addressing tax responsibility concerns by leading engagements with Alphabet (Google) and Apple.
I must confess that in my personal life, I have also willingly participated in a study that told you "all Facebook knows about you" if you would give the platform one-time access to your data. Not smart in hindsight, but while some of us forfeit our personal data every day for comfort and ease of communication, experts say that blaming users is an oversimplification. It's impossible for users to know the full consequences of hitting 'I agree.' But companies do — or at least should. As consumers and investors it's time for us to take control, assert our influence and call for responsible data stewardship from these companies.
Update May 30, 2018
Facebook's Annual Shareholder Meeting is on May 31, 2018. We have voted against all board members, including Chair Mark Zuckerberg, because we think the board failed in its duty to provide risk oversight in relation to many issues, including data privacy. We also supported shareholder proposals on the ballot filed by responsible investor colleagues, calling for a risk management board committee, a report on global content governance, an independent chair, and the dismantling of Facebook's dual class structure.