Why should investors care about digital rights?

When companies fail to respect users’ privacy and freedom of expression, users clearly pay a price, but they are not alone.

Luis Villa del Campo via Wikimedia Commons (CC-BY 2.0)

Building on the Ranking Digital Rights 2017 Corporate Accountability Index, our inaugural Investor Research Note analyzes how investors may be affected when companies fail disclose adequate commitments and policies affecting users’ rights.

With it we aim to build investor awareness of potential material risks related to digital rights in order to inform investment research and decisions, and to support investor engagement with companies on these issues. We address:

  • How digital rights provide a framework for evaluating risks associated with the management and use of content and personal data by companies.
  • How the financial implications of digital rights issues are growing, reshaping how investors should think about risk profiles of companies that provide services affecting consumer privacy, data security, and management of content affecting users’ freedom of expression.
  • How investors can use RDR’s Corporate Accountability Index as a leading indicator for what are potentially the most material digital rights business and investment risks.

2017 Investor Note

Click cover image to download report.

With a collective market capitalization in excess of US$3 trillion, the 22 internet and telecommunications companies evaluated in the 2017 Index have a significant impact on the performance of global portfolios and key indices such as the S&P 500. The Index findings and related analysis can be used to identify portfolio risks and engagement priorities that could be appropriate for active, long-term investors exposed to high value equities with significant digital rights risks.

We flagged the highest risk issues for investors identified by the Corporate Accountability Index as:

  • Security breaches and the lack of clarity about measures to secure user data;
  • Erratic disclosure of privacy protections and inadequate policies for responsible handling of user data; and
  • Failure to address growing demands by governments to shut down networks in the developing world.

The final page of the report offers a set of questions derived from the Index indicators which investors can ask of any company whose business has the potential to touch many aspects of users’ freedom of expression, privacy, or security.

Click here to visit our new resource page for investors and to download the report.

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