Does Google Care About Human Rights?

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Ruth Saldanha: In a few weeks, the 2021 proxy season will be launched. One of the investors in the company that we will be watching very closely is that of Alphabet. Google’s parent company just announced a 20-to-1 stock split. Shareholders filed 11 proposals with Alphabet on issues related to data privacy, racism and the environment, among others. However, due to a two-class share structure at Alphabet, it is virtually impossible for investors to secure a majority. So why deposit with Alphabet?

Sarah Couturier-Tanoh is the head of corporate engagement and advocacy at SHARE and filed one of 11 submissions, one relating to the human rights impact of her new advertising technology. She’s here today to talk about the declarations.

Sarah, thank you very much for being here today.

Sarah Couturier-Tanoh: Thank you for inviting me.

Saldanha: Now, SHARE has submitted one of 11 proposals to Alphabet, the one on human rights. What are some of the issues investors should be aware of regarding Google and human rights?

Tailor Tanoh: Well, Google is the biggest digital advertiser in the world. So I think it’s important for investors to pay attention to privacy issues and see exactly what the proposal we filed on behalf of one of our clients, United Church of Canada Pension Plan, is all about.

So the proposal asks the company to conduct what we call a human rights impact assessment of the new targeted advertising system called FLoC, i.e. Federated Cohort Learning , and it was to be implemented in 2023. In short, the current system relies on tracking cookies and it will be replaced by a different technology and civil society actors and technical experts have raised concerns about the FLoC , in particular on user privacy. And a week ago, Alphabet announced that it would ultimately not implement FLoC and replace it with another new technology called Topics. So obviously we’re glad the company recognizes the shortcomings of FLoC, but there’s still a lot to unpack to understand how the topics will impact user privacy. And one thing is certain, it is essential for Alphabet to carry out a human rights impact assessment of any new technology implemented, if it can affect the privacy rights of billions of users. .

Saldanha: So what are the other 10 proposals you are watching the most closely?

Tailor Tanoh: Well, I think all the proposals filed this year. At least one that I know of at Alphabet deserves investor attention, and I don’t think it would be fair of me to isolate specific propositions. That being said, due to the nature of its business and where it markets its products and services, Alphabet is exposed to technology-related risks that certainly require company actions such as privacy data, artificial intelligence, disinformation, etc. So I guess I’ll be paying close attention to how investors are addressing emerging risks through their voting practices.

Saldanha: Now, Alphabet has a two-class share structure, indicating that the proposals are unlikely to gain a majority. So what will these proposals even accomplish?

Tailor Tanoh: Well, I think the establishment of equal voting shares would certainly benefit shareholders. Alphabet is a public company, and the fact that there is a two-class share structure does not mean that the voice of shareholders should not be heard and taken seriously. So if a proposal garners significant support from unaffiliated shareholders, in my view, it doesn’t matter if it doesn’t get an overall majority, so boards should be responsive. And in this perspective, I do not believe that the proposals will be in vain if they are subject to shareholder validation.

And I’m sure all promoters expect to have a constructive dialogue with management and the board of directors of the company and to obtain the changes they are asking for if they are justified.

Saldanha: Thus, the company has already addressed the issues raised in the past and resolved them to the satisfaction of the shareholders, although it did not obtain a majority in the proposals and the votes of the shareholders. ?

Tailor Tanoh: Well, it’s quite common for a company’s management not to support shareholder proposals, and I’m sure every shareholder who’s filed the proposal at Alphabet has a different experience engaging with the company. But from what I know, management has had constructive dialogues with several investors in the past, and I know that changes have happened because proposals have been tabled and voted on. I also know that these changes are often not as satisfying as promoters would expect. So I think it’s important that shareholders continue to file these proposals to raise awareness of particular issues like this in technology and emerging technology risks and allow other shareholders to express their feelings on these issues.

Saldanha: Well, thank you very much for joining us today with your perspective, Sarah.

Tailor Tanoh: Of course happy to do so.

Saldanha: For Morningstar, I’m Ruth Saldanha.

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