Through A Series Of Shareholder Proposals At Alphabet, Amazon, And Meta, Investors Underscore Digital And Human Rights Risks In Tech Sector
NEW YORK NY, TUESDAY, JANUARY 31ST, 2023 – Members of the Investor Alliance for Human Rights who have been engaging leading tech companies on their digital/human rights risks today announced a series of proposals filed for the 2023 proxies of Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Meta (NASDAQ:META).
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Human Rights Concerns
The 15 proposals raise a variety of human rights concerns at each company ranging from inadequate content moderation and the proliferation of hate speech to a lack of transparency and accountability through the use of opaque algorithms and artificial intelligence, violations of privacy rights, risks of the targeted advertising business model of Big Tech, as well as corporate governance concerns such as the dual-class share structures prevalent in the tech sector that limit voting rights for shareholders.
Investors say, taken together, the issues raised in the proposals speak to the power and influence these tech giants wield over society and highlight how a lack of adequate oversight structures to mitigate potential harms raises risks for all stakeholders.
“The Information and Communication Technologies (ICT) sector has a vital role to play in realizing human rights including by facilitating greater citizen participation, freedom of expression, and coordination of democratic movements.
Yet, without the proper safeguards in place, these companies can unwittingly be linked to serious human rights harms,” said Anita Dorett, Director of the Investor Alliance for Human Rights, which helps to coordinate investor engagements in the sector.
“For this reason, ICT companies must conduct human rights impact assessments and install risk-management systems before they design, develop, and deploy new technologies and services.”
The Need For Enhanced Human Rights Due Diligence
The last several years have seen an increase in both the number and diversity of rights-related proposals filed at tech companies. This year, several proposals call out this need for enhanced human rights due diligence more explicitly, particularly regarding the algorithms these companies use to target advertising to their users.
“Meta Platforms, Inc. has a GDP larger than 150 of the world’s countries, yet despite its outsized influence, it lacks a substantial commitment to human rights,” said Lydia Kuykendal of Mercy Investment Services, which filed a proposal at Meta calling for an independent third-party Human Rights Impact Assessment.
“To date, the company has ignored the human rights impacts of targeted advertising, its sole source of revenue, yet we know those impacts are felt every day across the globe.”
“The black box systems run by big tech suffer from a lack of public trust and confidence,” said Jonas Kron of Trillium Asset Management, which filed a proposal at Alphabet requesting enhanced disclosure around the company’s use of Algorithmic Systems to target advertising.
“The impact that they can have on the lives of ordinary people and society means that regulators, civil society groups, communities, individuals, and investors are right to seek better transparency and accountability.
Trillium’s shareholder proposal at Alphabet focuses on that lack of transparency and has thus far earned the support of 56% of shareholders not named Brin, Page, or Schmidt.”
Call For Greater Transparency
A chief and ongoing concern for investors has been the management of discriminatory, exploitative, incendiary, or otherwise harmful content generated by users as well as the geopolitical and censorship implications that emerge via compliance with government requests for the removal of certain online content.
Again, investors call for greater transparency around the oversight structures in place at tech companies to mitigate any human and digital rights risks.
“Amazon’s e-commerce platform is used by billions of people all around the globe, yet the company’s disclosures regarding products and user-generated content that are restricted or banned from the platform fall far short of industry and international human rights standards,” said Sister Judy Byron of the Northwest Coalition for Responsible Investment, which filed a proposal calling for Transparency Reporting at Amazon.
“Shareholders are concerned that by failing to disclose censorship requests from governments, Amazon may be obscuring its participation in an array of human rights violations.”
“Meta continues to maintain a platform that disseminates hate speech and disinformation while promoting child pornography and sex trafficking,” said Andrew Behar of As You Sow, which filed a proposal calling for increased Board Oversight of Harmful User-Generated Content.
“In dialogue, we hear that this is the best they can do; they have AI and other systems in place – we do not see these having an impact in the real world on people harmed by the content on a daily basis. It’s time to try a new strategy as this one clearly is not working.”
A proposal requesting a Racial Equity Audit which received 64% of the independent vote at last year’s AGM was refiled by the Nathan Cummings Foundation.
“We know greater racial equity leads to better results for companies, their shareholders, and our society,” said Laura Campos of the Nathan Cummings Foundation.
“Corporate racial equity audits can help companies like Alphabet uncover areas for improvement, ultimately leading to a stronger company and better returns. Rather than rebuffing investors’ request for a racial equity audit, Alphabet should embrace this critical tool.”
Governance policies including tech companies’ dual-class share structure which restricts shareholders’ ability to participate in company decision-making also raise red flags for investors.
Shareholders will vote on the slate of proposals at the annual meetings of all three companies in the spring.
About the Investor Alliance for Human Rights
The Investor Alliance for Human Rights is a collective action platform for responsible investment grounded in respect for people’s fundamental rights. The Investor Alliance’s over 200 members include asset management firms, public pension funds, trade union funds, faith-based institutions, family funds, and endowments.
Collectively, they represent nearly US$12T in assets under management and 20 countries. The Investor Alliance is an initiative of the Interfaith Center on Corporate Responsibility.