In an opinion piece in Institutional Investor Magazine, Frederick Alexander, founder of The Shareholder Commons, claims that public companies often ignore the negative impact their platforms have on public interest in efforts to drive stock prices and this is often left out institutional investors’ ESG calculations.
In an opinion piece in Institutional Investor Magazine, Frederick Alexander, founder of The Shareholder Commons, argues that public corporations drive to increase stock prices and seek financial gain can run counter to public interest—and institutional investors fail to address this issue.
The author takes a case against Facebook brought by Frances Haugen, whose family member was radicalized on the platform. The company, she claims, knows how to make the platform safer for its users, but side steps these issues in favour of profits. After the mountain of criticism on the issue, Facebook changed its name to Meta and COO Sherly Sandeberg stepped down.
Alexander writes: “Most individual and institutional investors . . . hold diversified portfolios. But when Meta threatens the public interest to drive up its own value, it can compromise the long-term value of the economy that supports these portfolios. In our complex economy, decisions by a single company can have profound effects on almost every other company an investor owns. Meta’s decisions can degrade public discourse, instill social unrest, and undermine efforts to create an informed public, reducing the intrinsic value of the economy, which is directly correlated with the long-term performance of diversified portfolios . . . And yet, most institutional investors, including those that analyze a company’s impact on the environment, social responsibilities, and corporate governance (so-called ESG factors), fail to address this conflict.”