Achieving change in the world can be slow, and we have seen NGO's, lobbyists (for better or worse) and protestors achieve change. But investors have the power to achieve quite a lot of change, particularly by joining together to address issues. This is 'active engagement' which is a key part of ethical investing.
Formal collaborative engagement frameworks exist under the UN PRI (Principles for Responsible Investment) and other global and national groups, but collaborative engagement can also be driven by one or two investors (ie fund managers) who are prepared to commit the time, energy and resources to getting change.
At the September 2022 RIAA conference, we heard from people involved in the Christchurch Call initiative, in their roles at the New Zealand Super Fund.
This was in response to the Christchurch terrorist attack on the Mosque on 15 March 2019, with a goal of getting the three key social media companies (Facebook, Alphabet and Twitter) to prevent the spread of objectionable material.
They said that the keys to getting some traction was to have clear simple goals, not get distracted and to be persistent.
The New Zealand Super Fund joined with the other Government owned investors, ACC, GSF, NPF and Kiwi Wealth and built on this by engaging with other investors around the world to provide the 'power and authority' to ask for change. A total of 105 investors participated representing about NZD $13.5trillion of funds invested.
Where possible the group engaged with key executives to express their concerns about how content risk is managed by the respective companies. However, they remained frustrated and disappointed that all three companies continually declined their requests to meet with Board Members.
As the New Zealand Super Fund has noted:
“An important achievement of the initiative occurred in late 2020 when Facebook informed us that they had strengthened the Audit and Risk Oversight Committee charter to explicitly include a focus on the sharing of content that violate its policies. It included a commitment not just to monitor and mitigate such abuse, but also to prevent it.
“This notable improvement is directly attributable to this engagement and represents a real strengthening of governance and accountability for the Board on this issue. It puts the company on the front foot in working towards prevention of the issue rather than just fire-fighting inherent problems.”
To conclude the engagement research was undertaken to assess whether the changes made were appropriate for the scale of the problem. "Brainbox found that the measures put in place by the platforms are likely to be highly effective in mitigating the scale in which objectionable content of a similar type to the Christchurch terror attack, can be disseminated online. It also noted, however, that it is unlikely the platforms will be able to entirely prevent a similar type of incident in the future."
It was noted that this was just the start of the journey of addressing objectionable content and that the companies must keep the issue elevated.
We are proud that our New Zealand institutions have been able to drive change (albeit slow and small) in such a manner and with the launch of the Stewardship Code we look forward to seeing more changes over the future years, as more investors start engaging with the companies that they are invested in to get things changed.
