“All that glitter is not gold, often have you heard that told.”
Tech giants have long been deemed ESG good-will ambassadors. They usually couple a meaningful value proposition together with a garageland background, which makes the formula extremely appealing to people, especially the young. However, since they moved out the garage to become fat-rich twenties with pioneering and eco-friendly headquarters, they have had hard times managing their golden casket.
Investors concern with Environmental, Social and Governance (ESG) issues are targeting tech giants such as Twitter, Facebook and Alphabet, which owns Youtube, to shed light on their data and content management as well as their role in enabling corporate and governance surveillance.
On September 2019, New Zealand’s sovereign wealth fund, NZ Super Fund, started a global investor initiative to “prevent the live streaming and distribution of objectionable content”. The initiative, which has grown to 89 entities representing $13tn assets under management, came following the 15 March Christchurch mosque terrorist attack. The perpetrator live streamed the massacre on Facebook raising concerns about Facebook’s content distribution management.
Criticism to tech giants will not stop next year. At Apple‘s 2020 annual meeting, shareholders will vote a non-binding resolution for transparency over human rights. On 10 October 2019, the iPhone maker banned the app HKMap.live following pressure from state-run Chinese news agencies. The ban sparked a series of revolt over Apple’s free speech policies, which later pushed the resolution on Apple shareholders’ 2020 agenda.
Moreover, Apple is among the five corporate sued by International Rights Advocates (IRA). The law firm filled a motion against Apple, Google, Microsoft, Dell and Tesla as they “knowingly benefitted” from the primitive and dangerous working conditions of cobalt miners in the DRC’s cobalt industry.
ESG investors’ initiatives and campaigns against tech giants are very similar to those against oil and gas companies in terms of techniques employed. However, there is a substantial difference. Tech companies and their products evolve far more rapidly than the development pace of oil and gas companies. Consequently, regulators and public opinion, whose knowledge and competence in the subject is very little, fail to keep up with tech companies’ achievements, leaving tech giants room to operate freely often with no regards of their behavioural impacts on human rights and democracy.
ESG investors’ manovre does not aim at disrupting the tech industry. In fact, they heavily invest in this sector, which often guarantee them conspicuous returns. What is at stake for them, at least from an economic perspective, is the value and the profitability of their investment in the future.
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