Bias and discrimination

This section discusses the risks posed by AI systems developing biases and discrimination. The briefing calls for companies to adhere to global standards for responsible AI development, including having board-level ethics expertise and an independent ethics committee that reports publicly. Long-term goals, an escalation plan and case studies should be included to ensure systems are not leading to biased or discriminatory outcomes. The briefing cites examples of AI systems perpetuating biases within recruitment processes and the criminal justice system.

Manipulation and influencing behaviour

This section examines the ethical concerns of technology companies manipulating and influencing user behaviour through products and services. The briefing recommends technology companies collaborate with independent third parties on their content governance structures. The briefing calls for governance expectations of investee companies developing AI systems, including an escalation plan, board-level expertise and an independent ethics committee. The briefing cites examples of social media platforms exacerbating societal inequalities through magnifying biased or discriminatory algorithms.

Big tech: Market dominance

This section covers technology companies’ market dominance and the associated reputational and regulatory risks. The briefing highlights how ‘big tech’ outgrowing itself through aggressive mergers and acquisitions strategies or abusing their power as dominant buyers poses significant risks. The briefing recommends investors engage with technology companies on how they are respecting anti-trust and competition norms. The briefing cites examples of how Amazon and Alphabet failed to support two resolutions at their AGMs relating to content management controversies on fake news, election interference and the proliferation of hate speech and violence.

Automation and the future of work

This section evaluates the risks of automation creating underemployment, job displacement and increasing precarious employment within the gig economy. The briefing cites evidence suggesting that up to 46% of current jobs are susceptible to automation in the next few decades. The briefing recommends policy makers consider introducing minimum gig wages and extending basic employment rights to gig economy workers. The briefing argues that investors should engage with companies on issues such as protecting workers’ personal data and the right to collective bargaining.

Conclusion

Technology sector companies account for 19% of new IPOs since 2010, and this is only expected to increase. The sector falls outside traditional ethical/SRI screenings, meaning that technology companies are likely to have a considerable weighting in many portfolios. The briefing suggests that the responsible investment community has historically overlooked technology, and calls for constructive dialogue with asset managers regarding these responsible investment risks. The report concludes by providing asset owners with questions to ask asset managers to engage on ambitious engagement with the technology sector.