Facebook removed from S&P’s Ethical Companies List in the Wake of Scandals & Mismanagement
Social media giant Facebook has been removed from Standard & Poor’s influential list of ethical companies after a disastrous ranking in the S&P Environmental, Social and Governance (ESG) list.
Concerns over privacy, mismanagement of data and poor governance are said to be the reasons behind Facebook’s rating of 22 and 6 out of a possible 100 for social responsibility and governance respectively. Chief amongst which are the recent revelations that Facebook was allowing more than 150 companies to access personal data without their knowledge or consent, misuse of personal information - as seen in the Cambridge Analytica scandal - and a data breach that saw more than 50-million accounts compromised.
Read Steadman, Standard & Poor’s social governance chief said that a raft of concerns over Facebook’s handling of personal data, as well as “a lack of transparency as to why Facebook collects and shares certain user information” have culminated in its removal from S&P’s list of ethical companies.
“These events have created uncertainty about Facebook’s diligence regarding privacy protection, and the effectiveness of the company risk management processes and how the company enforces them,” Mr Steadman said, adding that “these issues caused the company to lag behind some of its peers in terms of ESG performance.”
Facebook previously shared 2.5 per cent of S&P’s entire ESG index. It wasn’t the only company to be dropped from the S&P index, with Wells Fargo, Oracle and IBM also removed in its latest iteration.
It is the fourth-largest company in the S&P 500 list, behind Microsoft, Apple and Amazon respectively.
“As Facebook’s peers raise the bar in their ESG performance, Facebook will need to do even more to rejoin the ranks of the S&P 500 ESG Index,” Steadman said.
In recent months, Facebook has faced a raft of calls from the American congress in the wake of data scandals, many of which we’ve reported on previously. Concerns are centred on the fact that Facebook collects large amounts of data, accompanied by an alleged lack of transparency surrounding how this data will ultimately be utilised.