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Fasten your seatbelts, investors: Global threats to digital privacy, security, and freedom of expression and information are on the rise. As geopolitical turbulence persists, these digital rights risks will force regulatory action in 2021.
Today we release our Fall 2020 Investor Update. This special report for investors looks at salient geopolitical and regulatory issues for the coming year, highlights how leading companies have responded to recent investor concerns, and suggests key questions to ask as 2021 approaches.
Read RDR’s Fall 2020 Investor Update
A growing number of investors who hold shares in the world’s most powerful tech companies are paying attention to risks related to users’ digital rights. Shareholder advocacy is starting to have an impact. The number of shareholder resolutions addressing issues covered by the RDR Index has risen sharply in the past five years, from just two in 2015 to 12 both this year and last year.
Companies are paying attention to this shift. Apple recently published a new human rights policy after facing a shareholder proposal calling for a public commitment to freedom of expression that was widely supported by major institutional investors.
In this edition of our Investor Update, we analyze the human rights issues raised in the Apple proposal along with three other proposals—two for Alphabet and one for Facebook—each of which cited results from the 2019 RDR Index. We also discuss how RDR’s digital rights indicators, grounded in international human rights standards, can help investors identify which companies are better prepared for the known unknowns of 2021.
See our interactive table of digital rights-related shareholder resolutions filed in 2019 and 2020, cross-referenced to RDR Index indicators.
While 2021 promises to be unpredictable, investors can expect regulation and geopolitics to make digital rights more salient than ever.
- More regulation is coming: Regardless of the outcome of the general election in the U.S., the case for stronger privacy and antitrust regulation is building in both houses of Congress — and on both sides of the aisle. In Europe, hard questions are being asked in Brussels about whether digital platforms’ targeted advertising business models fundamentally clash with the public interest.
- Geopolitical competition and conflict are bringing digital rights to the forefront: How companies handle their exposure to China, and how Chinese companies address security concerns outside their home market, will remain materially important in 2021 regardless of 2020 election outcomes. We know companies will continue to face new demands from governments related to user data and online content. Investors should ask whether companies have clear frameworks and processes in place for mitigating threats to users’ rights to privacy and freedom of expression and information in these scenarios.
How companies address their impact on human rights is becoming more relevant to more investors than ever before with the exploding popularity of ESG (environmental, social, and governance) funds that consider companies’ impact on the environment and society, and that have relatively accountable governance structures. In fact, global assets invested in ESG funds hit $1 trillion over the summer. Highly valued tech giants like Facebook, Apple, and Alphabet not only figure prominently in many ESG fund offerings—they have been propping up the equities markets. Yet these tech giants contain serious overlooked digital rights risks, ranging from privacy violations and security breaches to misinformation and censorship. So far, the market has not minded. But as Exxon’s recent removal from the Dow Jones reminds us, nothing lasts forever.
Read RDR’s Fall 2020 Investor Update
For more investor-focused digital rights resources please see our investor page.
