Facebook: Getting the Thumbs Down From Socially Conscious Fund Investors

“According to a Reuters/Ipsos poll, only 41% of Americans trust Facebook to obey laws that protect their personal information"[1]

There is little doubt that Facebook does not measure up to any reasonable ethical standard. The recent Cambridge Analytica fiasco and its fall out was an inconvenient truth which highlighted the fact that the social media gladiator is: “collecting far more information on its users - and even non-users - than it let on. And when... Mark Zuckerberg had the opportunity to come clean... during two days of congressional testimony, he ducked questions about how the company operates” [2]. Yet the platform's total disregard for its 'minion' users is coming home to roost. - A recent poll conducted by SurveyMonkey/Recode, asked respondents which tech company: “they least trust with their personal information among Amazon, Apple, Facebook, Google, Lyft, Microsoft, Netflix, Tesla, Twitter, Snap and Uber; and 56% chose Facebook” [2]. Google came in second with 5% [2].

“Mark Zuckerberg should quit according to an investor with a $1 billion stake in the technology giant” [3]

As reported by The Independent, Scott Stringer, a NYC Comptroller who heads New York City's pension fund, which includes a $1 billion stake in FB, told CNBC in no uncertain terms, that “there needs to be an independent chairman of the board... [and] we need more independent directors, and directors that have experience in terms of data and ethics...” [3].

And Nuveen's senior MD, Martin Kremenstein, noted that: “one reason it would be hard for the company’s socially minded funds to own Facebook is because the problems occurred despite a settlement the company struck with the Federal Trade Commission in 2011, which included a pledge to improve privacy protections' [4].

No Musical Chairs

Due to his controlling share in Facebook, Zuckerberg has the final say, when it comes to any personnel changes in the boardroom. Yet, judging by his behaviour of late, he has zero intention of losing his seat or crown... [3]. Of note: “A spokesperson for Facebook told The Independent that the company has no comment on Mr Stringer's remarks” [3].

Divestment – the New Watchword for FB Funds?

As reported by Reuters, a number of investment firms which have a socially conscious outlook, are either dumping or seriously reconsidering, their FB holdings. They are not impressed with Zuckerberg's or the platform's efforts to clear up their wrongdoings with users' data, and after his testimony before Congress, have reservations about Zuckerberg's commitment to fully resolve the issue [4].

Domini Funds' VP, Adam Kanzer, who plans to dump its FB shares, noted: “Facebook’s problems, we believe, are founded on a lack of sufficient attention to consumer privacy and data security, compounded by inadequate governance” [4]. Similarly, Calvert Research and Management disposed of their FB shares as they were concerned about lax controls [4]. With the likelihood of more scandals on the way, the investors in these and other funds that are giving FB the heave-ho, may in the future, be highly appreciative of such swift action.

Impact Investing

It seems clear that the reevaluation of FB by investors represents part of a bigger movement in which those with funds, put their money into companies which reflect their values, and “step up their impact investing over the next decade. Young investors, in particular, want their investments to be sustainable or make positive change” [5].

“When the Facebook scandal broke, there were roughly 80 ‘socially responsible’ funds which had Facebook as one of their top ten holdings” [6]

Socially Responsible Funds

Many moderate investors would be mystified to know that FB's “stock is commonly held by so-called socially responsible funds, which invest in companies deemed to do good for its citizens” [2]. The billion dollar asset, iShares MSCI KLD 400 Social ETF (exchange traded fund), represents the largest of such exchange-traded funds. It has been promoting itself as an: "exposure to socially responsible US companies" and urges investors to use the fund to "invest based on your personal values" [2]. Ironically, the fund has a 3.5% allocation to Facebook, so perhaps its billing is due for a revamp?

iShares MSCI USA ESG Select ETF ranks as the second biggest socially responsible exchange traded fund, and its stocks also include Facebook. It holds close to 100 large and mid-cap stocks "screened for positive environmental, social, and governance characteristics" [2]. Yet reading such a billing brings up more than one question mark. And while Zuckerberg's social platform takes up just 0.09% of the fund, it begs the question as to why: “there isn't a worthier company among the hundreds of candidates” [2]. So just how has FB made the cut?

“Many socially responsible funds are dominated by technology stocks. It is by far the most represented sector in the two iShares ETFs” [2]

As it turns out, socially responsible investing is not simply choosing the companies that appear the most virtuous. For instance, the MSCI “looks for industry specific environmental, social and governance policies that have historically made money. The idea is to simultaneously invest in responsible companies and beat or match the return of the broader market” [2]. In fact, “between 1990 and 2018: “the MSCI KLD 400 Social Index has beaten the S&P 500 Index by 0.5 percentage points every year” [2].

Because of its green footprint which is based on its low carbon output, when it comes to environmental screens, tech enjoys a super high rating. Yet screens on social responsibility do not take into consideration some of the sector's most worrisome characteristics, or the tech giants' questionable practices. So at the end of the day, serious ethical and socially conscious investors may need to look further afield than the tech giants, and see the enormous value and global potential in cutting-edge smaller companies which show complete transparency, and have the wherewithal to respect the rights and privacy of their users.

What is a Socially Conscious Investor?

This refers to someone who restricts him or herself to investing in funds which embrace ethical or socially responsible companies. Investors regard this category as one that includes various types of enterprises which empower social good as well as monetary gain. They look to make investments in companies which conduct business in responsible and positive ways. The areas of responsibility cover a broad spectrum of choices, for instance: some companies are centered on sound corporate governance policies, while others are focused on the environment, that is to say, companies which implement a green policy. And then there are others, such as OONA Mobile TV, which strives to work for the betterment of society by providing free entertainment services.

OONA's Social Mission

The tech industry has always shown leadership in innovation, and with great beacons of light such as Bill Gates, tech companies of all sizes are coming up with different ways to benefit society at large. Just like in Silicon Valley, there is now a growing hub of activity in Asia, where tech companies aspire to generate cutting-edge strategies and products which have the potential to make positive changes that help society.

“OONA goes beyond TV and OTT – it is a world 1st Free Entertainment & Messaging platform which gives users a cool way of choosing, sharing and editing their fab entertainment and ads”

OONA's founder and CEO, leading digital strategist, Christophe Hochart, together with TELCOM giant, Telkom Indonesia, have developed a unique way to bring data and subscription-free Mobile TV to 185 million plus Indonesians. Focusing on delivering free entertainment any time any where, OONA is fulfilling the fun factor for Indonesians, and is well on its way to doing the same for billions of under-served people in developing nations. These regions include other parts of Asia, Africa and South America, the Middle East, the US and Europe.

By bringing some sunshine into people's lives - many of whom have never owned a television set or laptop, OONA - via its AVOD mobile TV service, is facilitating a new type of user experience. This enables individuals and families to enjoy up to 300 top national and international channels which show fantastic films, shows, series, documentaries, educational broadcasts, celebrity news, cookery specials, live sports, breaking news and more, where ever they are, 24/7, 365 days a year, on any mobile device, or via a dongle on their home TV, without having to pay a service provider.

Everyone Should Be Able to Enjoy Free Entertainment

OONA's ethos is that “fun should be part of everyone's daily lives,” and through its regulated platform, the OONA Team are inspired to make people feel good by lifting their emotions and happiness levels via the platform's inclusive ethical free streaming service. In addition to this, users can say goodbye to pirate channels (the piracy content market comprises the highest level of consumers in the mobile TV market due to the fact that it does not involve any form of payment or subscription (a 99% prepaid market).

Users no longer have to waste away their time browsing, searching and switching channels, or going to pirate sites that are being systematically closed down. Now, OONA empowers them with all the television they could ever desire, all in one place. And viewers are even rewarded with tcoins, which they can earn for watching TV, sharing video ads, and engaging with other users and the helpful AI Genie in the OONA App, Siskabot. They can then redeem them for telkom products, and a vast selection of branded goods and services, as well as take away meals and other fun things.

OONA is a game changer, and is well on course to fulfill its company mission statement: “To make life fun for billions of people by providing Free Mobile TV.” It delivers fantastic high level entertainment to viewers free of charge, and at the same time, generates a ready to launch business synergy between TELCOM companies and content owners and broadcasters, enabling leading TELCOM companies to leverage their user base and network infrastructure to significantly expand their Mobile TV business. TELCOMS can now generate multi-revenues by offering the best ad supported live video and VOD, that goes way beyond OTT and TV, while at the same time, doing social good by providing high quality free entertainment. And perhaps in the future, OONA will set up a scheme in which people can donate their unwanted 3G and 4G phones to those in need in the third world countries that OONA serves.

In summary, while Facebook may have let us down and turned into an untrustworthy social monster with hidden agendas, and a greed that know no bounds - there is still a great deal of good intentions out there in the exciting and ever growing world of tech. - The innovation and magnificent ideas behind socially minded companies such as OONA, which strive to be successful, while at the same time, embrace doing good, and make respecting and protecting their users' data, a number one priority, do exist. – Hopefully, the future will be awarded to them...

Addendum

Only weeks after this article was written, on 25 July, 2018, Forbes published the following news: "Mark Zuckerberg's Net Worth Tumbles $18.8 Billion, More In One Day Than Ever Before." In this instance: "Facebook shares had fallen 16% to $181.89, shaving billions off the social network founder’s fortune" [7].

References

[1]. Snider, Mike & Guynn, Jessica (2018). “Facebook's FTC probe rocked the stock. But will anything rein in Facebook?.” USA Today.https://eu.usatoday.com/story/tech/news/2018/03/26/ftc-now-investigating-facebook-possible-data-misuse/458388002/ Retrieved 19 May 2018.

[2]. Kaissar, Kir (2018). “Doing good and making money an investment challenge.” AFR. http://www.afr.com/markets/equity-markets/doing-good-and-making-money-an-investment-challenge-20180417-h0ywm4 Retrieved 19 May 2018.

[3]. Cuthbertson, Anthony (2018). “Billion-dollar Facebook investor tells Mark Zuckerberg to quit as chairman.” The Independent.https://www.independent.co.uk/life-style/gadgets-and-tech/news/facebook-mark-zuckerberg-quit-investor-scott-stringer-a8286451.html Retrieved 19 May 2018.

[4]. Kerber, Ross (2018). “Socially responsible funds dump or rethink Facebook over data privacy.”

Reuters. https://www.reuters.com/article/us-facebook-investors/socially-responsible-funds-dump-or-rethink-facebook-over-data-privacy-idUSKCN1IJ1AX?utm_campaign=trueAnthem:+Trending+Content&utm_content=5affa39904d30110070c3929&utm_medium=trueAnthem&utm_source=twitter Retrieved 19 May 2018.

[5]. Montagne, Bobby (2018). “The Future Of Social Impact Investing? Consider Your Local Community.” Benzinga.https://www.benzinga.com/real-estate/18/04/11504271/the-future-of-social-impact-investing-consider-your-local-community Retrieved 19 May 2018.

[6]. Thalman, Matt (2018). “Socially Responsible Investing Isn't Cut and Dry.” http://www.ino.com/blog/2018/05/socially-responsible-investing-isnt-cut-dry/#.WwNUAdaaC7k Retrieved 19 May 2018.

[7]. Au-Yeung, Angel (2018). "Mark Zuckerberg's Net Worth Tumbles $18.8 Billion, More In One Day Than Ever Before." Forbes. https://www.forbes.com/sites/angelauyeung/2018/07/25/mark-zuckerberg-net-worth-tumbles-more-than-10-billion-after-weak-earnings-report/#779b73462670 Retrieved 25 Jul. 2018.