These 5 Companies Have Low Social Scores
Facebook, Inc.
Just as it’s important to address the ‘E’ in ‘ESG’, to provide solutions that mitigate the overt environmental effects of climate change, it’s perhaps more crucial to focus on the social aspects, like employee health and overall satisfaction. Yes, there are companies doing a great job of ensuring employees feel supported. However, there are several others that are terrible at ensuring employees feel valued.
Investors know this as well, since ESG measurement tools and ESG ratings can reveal a poor social score, reflected in exactly what these companies offer in terms of social sustainability. Here’s a random sprinkling of cross-sector companies who are not exactly ‘blossoming socially’.
As part of Silicon Valley, Twitter workers used to enjoy several perks that came with their jobs. There were options to work from home, gourmet lunches, and other benefits like reimbursements for wellness, classes, and day care. But since Musk’s takeover, a lot of those perks are gone (along with a large number of employees), as the company is nosediving steadily.
Facebook’s decline in social scoring has played out in a similar fashion to Twitter's. You already get a hint of it from the fact that Mark Zuckerberg expected his own employees to work in the Metaverse, something that employees now begrudgingly comply with.
But the social culture of Facebook wasn’t always like this. As the S&P index noted in its removal of Facebook from its ESG index, its social score has been declining dramatically since 2015. This decline has stemmed from the fact that people are realising some of the dangers of the company. For sure, Facebook itself is offering some pretty nifty perks, and it was once a great place to work. But as of 2023, Glassdoor dropped both Facebook and Apple from that list.
Setting aside Apple’s work conditions, newer employees at Facebook might find themselves contracted out to other companies instead while still being part of the company. In 2019, we’ve seen glimpses of those conditions, which are playing out similarly to what’s seen on Twitter.
EchoStar Corp
Look up the ESG rating of EchoStar, and you’ll find it a big problem with disclosure. There are no reports at all on employee health and safety, product responsibility, or emissions. This doesn’t mean EchoStar isn’t aware of these issues; rather, they are making efforts to not disclose this information at all.
The only extent of their disclosure is that they volunteered to reduce the energy usage of their set-top boxes. This is undercut by the fact that they made this announcement in 2012 and there has been no announcement about progress or results.
Rex Minerals Ltd.
Even though there are many mineral and mining companies working to incorporate more ESG into the industry, there are several mining companies that lag behind. One example is Rex Minerals Ltd., a company that discloses less than other mining companies.
This has resulted in two conclusions: either Rex Minerals is hiding something or is unable to perform ESG surveys in general.
There is plenty of rationale for both cases, as Rex Minerals discloses in great detail about the projects it does. That can’t be said about its commitment to sustainability, where it lists several buzzwords but doesn’t point to specific examples or goals.
Fox
Setting aside the politics surrounding the company, employees have shared their own horror stories in the past. From the real reason Kimberly Guilfoyle left to Bill O’Riley’s sexual harassment cases and the recent and unexpected firing of Tucker Carlson, these events are indicators for how this company treats its employees.
In the recent case of Tucker Carlson, he was on air for years peddling known lies, conspiracy theories, and hate messaging. And yet he was fired via text message, and it was announced on the network.
Takeaway
Ok, so this wasn’t a deep dive into the specific reasons why certain companies are failing to deliver on selected ESG-derived social value metrics. It does, however, provide a wide-angle view on a batch of businesses that are currently deeply impacted by their lack of commitment to prioritising people, which is overtly reflected in their ESG ratings.
‘ESG’ is merely the contemporary attempt to capture the various streams of operational importance in a company’s workings, based around the premise that transitioning to sustainability requires several angles of approach. However, if the people really are the business, then the emergent logic is that we start with the social values and the rest, very connectedly, follows. Take a very quick glance at an expanding range of companies to determine their ESG performance, via our Company ESG Profiles.
