The Swedish AP funds' Council on Ethics has brought together investors representing €6.4 trillion ($6.81 trillion) in assets to engage with tech firms on strengthening the management of their human rights risks and impacts.
The Council on Ethics, which represents the sustainable efforts of AP1, AP3 and AP4, Stockholm, and AP4, Gothenburg, said in a news release that "digital services are increasingly prominent in our everyday lives and tech companies have a significant potential for societal impact."
While a focus on maximizing interactions with content and providing relevant information to users has benefits for transparency and connectivity, the business model for many online platforms "also comes with notable risks." The council warned that the "spreading of malicious or untrue content can cause far-reaching damage," such as jeopardizing individual human rights, and spreading hate speech and misinformation, which can have system-level consequences such as hyperpolarization, discrimination, violence and erosion of democracy, the release said.
Failure to manage these impacts may harm companies' social license to operate and present reputational, legal and regulatory risks, which the council said "may have material implications."
The group will collaboratively engage with focus companies Alibaba, Alphabet, Amazon, Apple, Meta, Microsoft and Tencent in a three-year initiative, with the goal of ensuring that these companies "take concrete measures to address operational and human rights pertaining to their products and business model, and to encourage a more transparent reporting on the related impacts and efforts." Activities and results of the engagement will be publicly reported.
"We, together with this investor group, recognize the systemic nature of the challenges related to online content, and in addition to effecting company-level improvements hope to raise broader discussion and awareness of the risks with the services of these tech companies," Magdalena Hakansson, chairwoman of the Council on Ethics, said in the release.
Participating investors include APG Asset Management; Church of England Pensions Board, London; Railpen, London; and Universities Superannuation Scheme, London.