The SEC rejected Meta’s push to block a slate of human rights proposals, including one focused on targeted advertising
A round of rulings by the Securities and Exchange Commission (SEC) has made it clear that Meta (FB) cannot escape shareholder scrutiny on fundamental human rights issues. The SEC has rebuffed the company’s efforts to keep five proposals from going to a vote at its annual meeting in May. One of them, which RDR helped prepare, calls on Meta to assess the human rights impacts of its golden goose: targeted advertising.
If adopted, the proposal would require Meta to commission an independent third party to conduct and ultimately publish a human rights impact assessment (HRIA) of its targeted advertising policies and practices. This fully aligns with our human rights-based standards. Every company that forms part of the targeting ecosystem should continuously assess its human rights impacts, especially major players like Meta, which accounts for more than a quarter of all US digital ad spending, surpassed only by Google.
When faced by such resolutions, companies routinely try to convince the SEC to block them. In this case, Meta argued that the proposed HRIA would interfere with its ordinary business operations, claiming that the filer was “impos[ing their] own views and preferences on advertising strategy and standards.” Shareholders, it declared, should not get to manage “complex and strategic” issues such as targeted advertising—heaven forbid shareholders scrutinize the engine behind Meta’s nearly $40 billion in revenue. The company pointed to a 2021 case in which the SEC allowed the Walt Disney Company to exclude a resolution on the impacts of advertising on social media platforms, including Facebook.
But Mercy Investment Services and NEI Investments, the shareholders leading the proposal, were undeterred and countered accordingly. Where Disney is but one of hundreds of millions of advertisers, Meta and its ad platform are the fabric that knits many of them together. Surveillance advertising is Meta’s lifeblood, with advertising windfalls comprising a staggering 98 percent of the company’s total revenue. The human rights harms that targeting enables are indisputably a significant policy issue. In other words, shareholders are not snooping into Meta’s “ordinary business”: they are investigating the causal relationship between the guiding logic of the company’s entire business operations and widespread human rights harms.
The SEC rejected additional attempts by Meta to exclude several other resolutions, clearing the path for a vote in May. Assessing human and civil rights impacts is the unifying theme of two of these proposals, mirroring broader trends this proxy season. Arjuna Capital and several co-filers targeted Meta with a resolution calling for a report on the potential harms of the so-called “metaverse” project. The scale of the project and Meta’s penchant for “moving fast and breaking things” before thinking about the consequences of its ventures reinforce the company’s basic duty to conduct this kind of assessment. Shareholders also demanded a new civil rights and non-discrimination audit, a report on the external costs of misinformation, and an account of why Facebook and Instagram’s Community Standards have proven ineffective against harmful speech.
In addition to the five proposals that will go to a vote next month, a proposal on stock ownership incentives was withdrawn after Meta promised to implement some of its components in 2023, while the SEC sided with the company in excluding another proposal related to lobbying disclosures.
Shareholders’ growing focus on the business models that sow the seeds of human rights harms makes it clear that companies can no longer evade accountability. Of course, Meta’s dual-class stock structure will allow Mark Zuckerberg to single-handedly defeat proposals like these. But the voices and votes of independent shareholders will still resonate widely, keeping the issue in the headlines, bolstering internal reform efforts, and laying bare just how detached Meta’s leadership is from public demands for accountability. It is past time for policymakers to intervene, and shareholder advocacy efforts like this one are key to keeping the pressure on.
