Adults in the UK typically spend over 3 hours per day on their phone. Over the course of a year, that’s just over 45 days. In an age where so much of our time is spent online, the relationship between our digital rights and human rights has never been so topical.
Our human rights are the basic freedoms and protections that belong to every person, regardless of your job, country, race, or beliefs. Digital rights are a specific application of traditional human rights, adapted to cover technology, the internet and data.
There is a small group of technology giants – the likes of Alphabet (Google), Meta, Microsoft, Amazon, and Apple – that have extraordinary influence over the infrastructure, services, and norms that shape our online lives. Their collective market power lets them set the terms of digital engagement for billions of people worldwide.
This concentration of power has profound implications for human rights.
How platforms are being used to amplify harm
The power social media platforms have to influence conflict has long been underestimated.
Both Myanmar and Ethiopia have seen first-hand the devastating human rights consequences of the amplification of harmful content. In both countries, social media platforms have been used to incite discrimination and violence against marginalised communities.
This power can be even more worrying in crisis situations like these, where those viewing the content are less likely to have alternative sources of information to counterbalance, contextualise and debunk inflammatory or false rhetoric.
If deemed complicit, companies at the centre of human rights controversies can face adverse market reactions. This can result in reduced investor confidence and share price volatility. A study of over 400 US companies found that their expected returns dropped by up to 2% in the period following reports of human rights and discrimination misconduct.
The risks to child safety
Children and young people are growing up in a world where their personal data is collected, tracked, and shared from the first time they download a game, to their first social media account, or to their use of online education platforms.
Platforms are known to employ features like infinite scroll, autoplay, and recommendation algorithms to keep kids hooked. These features are particularly risky for children less able to disengage from addictive experiences.
Young people are increasingly reporting a social media dependency, raising concerns about children's rights to development and wellbeing in the digital environment.
To reduce the negative influence of digital environments on children, more and more countries are implementing national bans on phones in school.
The dark side of AI
With the development of artificial intelligence (AI), comes the rise of deepfakes.
A deepfake is media that has been generated or altered by AI to make a real person appear to say or do things they never actually did. Like fabricating a politician’s speech to manipulate public opinion. Deepfakes can also be used to harass, intimidate and defraud.
Tech companies are having to implement processes to safeguard against the use of deepfakes and protect people’s right to freedom of expression.
In the UK, online platforms had until the end of September to implement automated technology to detect and prevent the sharing of illegal images, including deepfakes. If firms fail to comply, they could face significant penalties, including fines of up to 10% of their global revenue.
For investors, this could see a direct impact on their returns.
What is the financial cost?
The consequences are no longer theoretical. Big Tech is already facing legal, financial and reputational costs of treating human rights as an afterthought.
Social media giant Meta is the latest company to come under fire. Last month they agreed to a $16.7bn settlement to resolve claims that Facebook and Instagram caused harm to children through addictive design features and misrepresenting the associated risks to wellbeing.
This demand for stricter regulation and accountability by Big Tech firms is being felt worldwide.
Brazil’s National Data Protection Authority (ANPD) fined TikTok’s parent company ByteDance close to $30mn for the unlawful processing of personal data belonging to children and teens.
Large fines have a direct impact on a company’s earnings, while ongoing legal disputes can create market uncertainty and weigh on valuations. It remains to be seen whether such fines are merely a bump in the road or enough to trigger a real improvement in their digital and human rights practices.
As AI and social media become more deeply embedded in daily life, the defining question is not whether these companies can innovate faster, but whether they can build systems that protect people as deliberately as they capture our attention.
Investment ideas
This article is for information only and not personal financial advice. Investing can help your money grow, but the value of investments can rise and fall, so you could get back less than you put in. Investing is for the long term, typically 5 years or more.
If you’re not sure whether investing is right for you, a financial adviser can help.
Investing in these funds won’t be right for everyone. Investors should invest only if a fund matches their objectives and there’s a specific need for the type of investment being made, they understand its risks and charges, and it forms part of a diversified portfolio.
For more detail on each fund, its charges and specific risks, please see their factsheets and key investor information.
Janus Henderson UK Responsible Income
This fund aims to provide a good level of income alongside capital growth over the long term. While it invests across a broad range of UK companies, its responsible investment approach means human rights considerations form part of the way companies are assessed.
Manager Andrew Jones invests in companies with proven business models and good management teams generating resilient profits and cash flows. The focus is on large and medium-sized companies, although the manager can invest in higher-risk smaller companies too.
The investment process starts by excluding companies with significant involvement in areas some investors consider unethical, like alcohol, armaments, gambling, non-medical animal testing, nuclear power, tobacco and fossil fuel power generation. All investments must also be compliant with the UN Global Compact (a United Nations pact on human rights, labour, the environment and anti-corruption).
Principle 2 of the Compact states that businesses should ensure they’re not complicit in human rights abuses. Breaches of freedom of expression and censorship are just two ways in which a company could be deemed in violation of the Compact.
Janus Henderson aims to be a responsible steward of investors’ money, and Environmental Social Governance (ESG) is an important part of this. Company site visits, speaking to workers and questioning company management are just some of the ways fund managers actively assess a company’s ESG credentials.
Legal & General Future World ESG Tilted & Optimised Developed Index
Legal & General Future World ESG Tilted & Optimised Developed Index takes a different approach to the Janus Henderson fund. It tracks the performance of the Solactive L&G Enhanced ESG Developed Markets Index.
While the fund is diversified across many sectors, 44% is invested in communications and technology companies. Because the fund tracks a broad developed markets index, it still invests in many of the large technology companies discussed above, which make up a significant part of global stock markets.
Companies are assessed against a variety of environmental, social, governance and transparency metrics, including carbon emissions, water management, biodiversity, supply-chain standards and corporate controversies.
The index increases investments in companies that score well against these ESG factors and reduces exposure to companies that score poorly. This means the fund may hold more or less of some of the large technology companies than the broader index, depending on LGIM’s assessment and its engagement with company management.
The fund won't invest in persistent violators of the UN Global Compact Principles and companies that are involved in controversial weapons. It also excludes companies that earn a significant proportion of their revenues from tobacco, adult entertainment, gambling, civilian firearms, military weapon system manufacture, thermal coal and oil sands.
On top of this, the fund adopts a decarbonisation pathway. This means it aims to reduce emissions by 7% per year until 2050.
Investors should note that the fund invests in higher-risk smaller companies. The fund can also lend some of its investments to others in exchange for a fee in a process known as securities lending. This offsets some of the costs involved with running the fund but can add risk.
Want to learn more?
This week is Good Money Week, a national campaign promoting responsible investing.
If you’d like to learn more, visit our Responsible Investment Hub.