Press Release: META PLATFORMS (FACEBOOK) NEEDS THIRD-PARTY ASSESSMENT OF METAVERSE USER RISKS AND ADVISORY SHAREHOLDER VOTE

Shareholder proposal filed in wake of whistleblower testimony, anti-trust litigation, and congressional hearings that put Meta’s ability to govern metaverse technology under question

BOSTON, MA – December 13, 2021 – Mark Zuckerberg’s vision of the metaverse is being challenged by shareholders who are concerned that it “will generate dystopian downsides” and investment risk.

In response to Meta Platforms’ (formerly Facebook) announced plans to invest billions of dollars in the long-term development of a metaverse project, the Company will face a proxy resolution at its shareholder meeting in May 2022 pressing it to commission a third-party assessment of “potential psychological and civil and human rights harms to users that may be caused by the use and abuse of the platform, and whether harms can be mitigated or avoided, or are unavoidable risks inherent in the technology.” Following that assessment, the resolution urges, the company should hold a special advisory shareholder vote that would allow investors to express an opinion on whether continued implementation of the project is “prudent or appropriate.”

The resolution has been filed by investment management firm Arjuna Capital, with co-filers Storebrand Asset Management, SHARE, and SumOfUs. It was developed with support by Open MIC, which works with shareholders to encourage corporate accountability in the tech and media sectors.

“Facebook’s (Meta’s) transformation into the metaverse is not a fait accompli,” said Natasha Lamb, managing partner of Arjuna Capital, who has engaged with Facebook for the last five years. “In the face of anti-trust litigation, whistleblower testimony, congressional hearings, and abysmal governance practices, investors seriously question Zuckerberg’s ability to lead this transformation and whether Facebook has the social license to operate a potentially dangerous emerging technology. The same issues Facebook is reckoning with—discrimination, human and civil rights violations, incitement to violence, and privacy violations—will only be heightened in the metaverse. That’s why investors need to understand the scope of these potential harms, and weigh in on whether or not this is a good idea, before we throw good money after bad.”

The many harms caused by Meta’s current social media platforms – Facebook and Instagram – have stirred global controversy. The shareholder resolution cites an October 2021 investigation by The Wall Street Journal, based on hundreds of internal documents provided by a Facebook whistleblower, which revealed the company’s failure to address those harms proactively and effectively. The Journal series concluded: “Facebook Inc. knows, in acute detail, that its platforms are riddled with flaws that cause harm, often in ways only the company fully understands.”

Meta is “betting its future” on the metaverse project, according to the shareholder resolution. CEO Mark Zuckerberg has said the company will spend at least ten billion dollars on metaverse investments in 2021, approximately 50 percent of capital expenditures, with additional future spending planned.

Kamil Zabielski, Head of Sustainable Investment at Storebrand Asset Management, said: "As a shareholder, Storebrand is concerned that the metaverse project, if not thoroughly assessed, could compound many of the challenges the company is currently facing. Before entering the virtual world, it is critical for Meta Platforms/Facebook to thoroughly assess the human rights impacts of the metaverse project, outline how they intend to mitigate potential harms, and engage its stakeholders to develop a path forward that builds trust with users and society at large."

"Without appropriate care and diligence, Mark Zuckerberg's vision for the 'metaverse' risks becoming a dystopian nightmare for the public and investors alike,” said Sarah Couturier-Tanoh, Manager, Corporate Engagement & Advocacy of SHARE (the Canadian Shareholder Association for Research & Education).

“The SumOfUs community is outraged by the impacts Meta’s platforms already have,” noted Christina O’Connell, shareholder advisor for SumOfUs, a co-filer of the resolution. “Many of our members are also Meta shareholders and they are concerned by recent disclosures that make it clear Mr. Zuckerberg and his team are not able to responsibly manage their existing ‘universe’ -- as shareholders, how can they trust in the company’s ability to manage a metaverse as well?”

A third-party assessment and shareholder vote on the metaverse project would allow Meta to mitigate potential future societal harm, while also retaining shareholder value. Without proper due diligence and governance of the metaverse project, shareholder value could be harmed, according to the resolution. After the company’s governance failings were exposed this past fall, share value dropped 13 percent within six weeks. Shareholders believe that a thorough assessment of the platforms’ potential risks, and a plan to mitigate these potential risks, will only benefit Meta’s value in the long run.

Arjuna Capital is a sustainable and impact investment firm that works with high-net-worth individuals, families, and institutions to invest their assets with a lens toward Environmental, Social, and Governance (ESG) risk and opportunity. Natasha Lamb and Arjuna Capital have been recognized for using shareholder resolutions to promote effective content governance in the tech sector. Lamb was named to the “Bloomberg 50” list of influencers who defined global business in 2017. For more information, visit www.Arjuna-Capital.com.  

CONTACT:  Natasha Lamb, (978)704-0114 or natasha@arjuna-capital.com.