Responsible Investment News

Facebook Turns Toxic for Some ESG Funds

As Facebook has struggled to contain the damage from Cambridge Analytica’s use of personal data from 50 million users, some ESG funds have started to rethink their interest in the company. In a nutshell, they’re viewing the breach as the digital equivalent of a toxic waste spill — one that has prompted calls for greater government oversight of social-media companies.

The BetaShares Global Sustainability Leaders ETF removed Facebook from its fund last week, citing a reassessment after the Cambridge Analytica data breach and other controversies. Facebook accounts for about 3.9% of the fund, the largest ethical ETF traded in Australia. Nordea Bank also blacklisted the stock last week, saying it won’t let its sustainable-investment unit buy more amid concerns about "systemic issues." 

Other Nordic investors focused on ESG issues also are reviewing their holdings. "Data security and privacy are significant ESG risks," Janicke Scheele, head of responsible investments at DNB Asset Management, said in an email, adding that she’s following the situation closely.   

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