Investors confront online giants
Three years ago a wave of pressure from media and the public forced KiwiSaver providers to ditch investments in companies making cluster bombs, nuclear weapons and in tobacco stocks. Now providers are facing difficult decisions over investments in Facebook, Google and Twitter while also changing the way they invest to match the New Zealand Government’s ban on semi-automatic guns.
Facebook has been lambasted for its slow reaction to the livestreaming of the Christchurch terror attacks and the way it was shared on other sites.
Telecommunications companies and major banks have pulled advertising from social media sites in response.
Five government-related funds which manage more than $90 billion have called for Facebook, Twitter and Google to take action against the spread of harmful content.
The New Zealand Superannuation Fund, ACC, the Government Superannuation Fund Authority, National Provident Fund and Kiwi Wealth put out a joint statement late Wednesday saying the social media companies should “fulfil their duty of care to prevent harm to their users and to society”.
NZ Super Fund chief executive Matt Whineray said they had been profoundly shocked and outraged by the Christchurch attacks and their transmission on social media.
“These companies’ social licence to operate has been severely damaged,” he said.
The move is being backed by KiwiSaver providers, with some managers taking steps already.
KiwiSaver fund manager Milford Asset Management dumped its $14 million shareholding in Facebook on Monday.
Milford chief executive Mark Ryland said Facebook, Google and Twitter must take action following the livestreaming and content sharing of the mosque attacks on social media.
“Not acknowledging any responsibility for their platforms is not acceptable,” Ryland said. “Social media companies need to provide genuine assurance around their course of action.”
Others have joined their voices to support the government-backed funds but say they won’t be selling the shares for now.
Bruce McLachlan, Fisher Funds chief executive, said it had advised both Facebook and Google that it was very unhappy about their inability to keep footage of the events in Christchurch off their platforms.
“We have sought to engage with them to understand how this has happened and what investments they are making to ensure this cannot happen again in the future.”
McLachlan said it had chosen not to take any action beyond that at this time because the other side of the social media argument was that these platforms also did a tremendous amount of good.
“In the wake of terror attacks globally it has been a place for people to mark themselves as safe, get in touch with loved ones, organise events/ fundraising, and otherwise support those impacted.
“More broadly, it allows the public to communicate with friends and family, engage with their communities and become better informed about the world around them.”
McLachlan said the debate on social media had a long way to go.
“These platforms need to ensure they are doing all they can to protect users and the broader community, while still allowing people to benefit from the increased connectedness these tools provide.”
He said investment was about making long-term quality decisions in clients’ best interests that were considered and balanced.
“The decision on social media companies investment is no different, and will remain under review.”
Booster principal David Beattie said it had contacted the Super Fund and confirmed its support.
He said joining with other investors was a great example of how collective shareholder action could look to make change.
Beattie said if there was a determination that Facebook had broken the law by livestreaming the Christchurch attack, it would take that into account in its investment decisions.
“But we won’t be doing a knee-jerk reaction at this point,” he said.
Beattie said he was confident other global investors would come on board and support the Super Fund given the global reaction to the event.
Sam Stubbs, managing director of Simplicity, said it also got in touch with the Super Fund to give its support but would not be selling shares.
He said it was much more powerful to be in a company’s boardroom to try to initiate change.
Stubbs said the Super Fund’s stance was key as “no dollar was more valuable to any company than a Sovereign wealth fund”.
Anne-Maree O’Connor, head of responsible investment at the Super Fund, said its preference was to engage