New York State Presses Facebook, Twitter to Improve

The New York State Common Retirement Fund and Arjuna Capital, a sustainable investment firm, are taking on problems at Twitter and Facebook. The two organizations announced Thursday that they filed shareholder resolutions to combat sexual harassment, fake news, and hate speech at the two social media platforms.

“The rapid growth of the #MeToo movement, the 2016 U.S. election interference, the racist targeting of ads, and the unfortunate role that both Facebook and Twitter may have played in escalating sexual harassment, hate speech, and fake news online were key factors in the introduction of these first-of-a-kind proxy resolutions,” according to a statement from Arjuna and the pension system.

The resolutions ask for detailed reports from Facebook and Twitter about their policies and whether they are effective in deterring sexual harassment, fake news, and hate speech on the platforms. According to Arjuna managing partner Natasha Lamb, these issues pose a risk to both companies, as users often leave the networks following unpleasant or damaging experiences. 

“With the recent sea change — the awakening, if you will — to the unacceptable behavior towards women that has been swept under the rug for far too long, women are no longer putting up with what has been the status quo,” Lamb said during a press call.

In theory, policies on both platforms should protect users from hate speech and harassment. However, in practice, Lamb noted, this typically doesn’t occur.

“Companies have done very little to promote adherence to their terms of service,” said Patrick Doherty, director of corporate governance at the New York State comptroller’s office.

The retirement fund owns roughly 6.7 million shares of Facebook, which as of December 31 had a market value of about $1.1 billion, Doherty said. The pension fund owns more than one million Twitter shares, valued at $35 million, he added. The fund manages more than $200 billion.

“Our advocacy is not something we take lightly,” Doherty said. “Obviously these are not issues that are going away.”

The Illinois State Treasurer Michael Frerichs and asset managers Baldwin Brothers and Harrington Investments joined Arjuna and New York’s fund in filing the Facebook shareholder resolution.

What happens next is unclear. A Twitter spokesperson declined comment on the shareholder resolutions, while a spokesperson for Facebook said the tech company typically addresses concerns in a proxy statement it publishes in April.

“Our major concern is that people are going to lose faith in these platforms over time,” Doherty said.