ESG funds generally had a screening process that disregarded companies involved in the production of tobacco or alcohol, manufacture or provision of gaming facilities, weapons or armaments, pornography, mining of uranium for weapons, and thermal coal and oil sands.
However, Facebook does not break any of these requirements, but actions by the company could be ethically contradictory to what investors wanted to invest in.
The most recent example was The Wall Street Journal had reported that Facebook executives had thwarted efforts to minimise misinformation and make the social media site less divisive.
Facebook chief executive, Mark Zuckerberg recently also said the company would not directly censor posts and criticised companies like Twitter for doing so.
Twitter chief executive Jack Dorsey drew the ire of US President Donald Trump, after the social media company added a disclaimer to one of the President’s posts for misinformation, and later another for glorifying violence.
Big tech firms in the US, like Facebook, Alphabet, Microsoft and Apple, had become popular options for ESG funds because those companies offered high returns while adhering to ESG screening criteria.
Simon O’Connor, Responsible Investment Association Australasia (RIAA) chief executive, said the actions of social media companies had been strongly scrutinised by some responsible investors.
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