‘Room for improvement’: Investors respond to Meta’s first human rights report

AXA IM, EOS at Federated Hermes and NEI Investments will continue to engage the tech giant.

Meta’s first human rights report is a step in the right direction but fails to fully address key issues in the area, asset managers told Responsible Investor.

Published last week, the document follows the tech giant’s adoption of a human rights policy in March 2021, which included a commitment to report annually on efforts to address its human rights impacts. The report covers Meta’s “learnings and progress” in 2020 and 2021.

RI has previously reported on efforts by responsible investors to strike a balance between reaping the profits of the tech industry and managing its ESG risks.

Théo Kotula, ESG analyst at AXA Investment Managers, told RI that the report provides investors and other stakeholders with a clear description of Meta’s approach, policies and commitments regarding human rights. “It also makes its governance of human rights pretty clear, with the involvement of Meta’s audit and risk oversight committee at board level.”

At the same time, he highlighted a statement on page 10 of the report: “Our human rights policy laid a strong basis for action. In the coming years, we intend to build the maturity of our programme, function and reporting.”

This illustrates that Meta is “only at the beginning of its journey on human rights”, Kotula said.

He also noted that disclosing policies “is not enough to concretely address the issue”, even though Meta does provide some case studies and examples. “We were already aware of most of the human rights policies and commitments laid out in the report through our discussions with Meta, but as investors we need to disentangle words from actions, and understand what are the concrete steps Meta will take to address recurrent privacy, content and human rights issues, as well as its remediation actions.”

Michela Gregory, director of ESG services at Canada’s NEI Investments, agreed that the report marks a positive step for Meta and the industry – however, she also suggested there was room for improvement.

“Targeted advertising is a cornerstone of the company’s business – but that topic was barely mentioned aside from vague references to its advertising policies without much context about the effectiveness of these policies,” she said. “So, that’s at least one big question that remains unanswered.”

She noted that the issue was raised in a shareholder proposal filed by Mercy Investment Services – with NEI Investments as co-filer – at the company’s AGM this year, which received 20 percent support from shareholders.

For NEI, two things stood out from the report: “First, its current definition of salient human rights risks, and second, its commitment to do a comprehensive company-wide salient risk analysis.”

Gregory stressed, however, that the report is light on details about Meta’s intended process in undertaking the saliency assessment. “We will be looking for the company to work with an experienced third party, and to be transparent about how it considers the insights and feedback it receives from any stakeholders in the process,” she said.

Nick Pelosi, human rights engager at EOS at Federated Hermes, also welcomed Meta’s actions to enhance disclosure on human rights, noting that the report provides helpful information on policies and procedures in areas such as enforcing the community standards governing content on its platforms.

However, like Gregory and Kotula, he highlighted limitations in the initial version. “We think there could be more direct disclosure from the company on whether its business model – which correlates higher revenue with higher quantities of clicks, likes, posts and shares – contributes to the spread of problematic content on its platforms. The report falls short of the highest standard for user privacy rights in our view, which is a commitment to obtain user consent for collection, inference, sharing and retention of their data.”

All three investors told RI that they will continue their engagements with Meta regarding human rights and wider ESG issues.

“Digital rights are an important part of our approach to active ownership,” said Gregory. “Meta is a player with global influence, whose actions have global repercussions. We aren’t asking tech companies to provide a human rights report as part of a ‘one and done’ process. Instead, this will inform the dialogue between investors and the company so that we can deepen the conversation and better understand corporate strategy. The reporting, and our dialogue, will both evolve. We will continue to consider next steps on engaging Meta on how they can improve their approach to human rights issues, and hold themselves accountable to the various stakeholders that their business impacts around the world.”

Others were more critical of the report. Andrew Behar, CEO of US nonprofit As You Sow, told RI: “[It] looks like the same old story. Meta continues to insist that they just own the pipes and are not responsible for the content causing harm. This is flawed logic. Zuckerberg has total control of the company by virtue of his majority voting preference. He has decided to not solve the problems, rather he spends billions of dollars on a well-designed report chock-full of photos featuring very serious diverse people, to try and shift the story, leaving millions in harm’s way.”

At the time of publication Meta had not responded to RI’s requests for comment on the reactions to its report.