SI Opener: Protecting Digital Human Rights in the Post-Covid-19 Era.
The SI opener states, "The volume of digital data can cause serious privacy and human rights issues - especially when it comes to sensitive health data now being used in the fight against Covid-19. The global amount of data will increase to approximately 40 trillion gigabytes in 2020, or more than 5,000 gigabytes for each inhabitant of the planet.(1) That's five times the capacity of an average PC - and much of that data affects YOU.
A release on the SI Opener states, "In the Corona crisis - as with many other fundamental ESG issues, for that matter - digital human rights are being put to the test. On the one hand, apps that can track infected individuals can save lives and help ease measures to contain the pandemic, thus helping the economy. On the other hand, the use of such apps puts privacy at risk if not done carefully."
Some seem to believe that privacy should be sacrificed for this purpose. However, AccessNow, a leading nonprofit organization in the field, argues that strong digital rights can indeed help improve public health.(2)
Robeco (see box below) fully shares this view. "If digital rights are not adequately protected, people will not voluntarily use apps to track infected people, so the only way these apps will succeed in this case is if their use is made mandatory. In many countries, people won't accept that, and the governments of those countries would thus not be able to use digital health tools successfully."
Problems with regard to digital human rights
But there are other, the SI opener continues, "less obvious problems." Health data is among the most sensitive data there is. Data protection is of utmost importance here. The analysis of health data by authorities may be necessary to respond to a massive outbreak of an infectious disease. However, poor handling of this data can lead to mistrust and less use of digital health tools.
Another important issue is surveillance. Some governments may use the crisis to install surveillance tools on a large scale, which could be seen as controversial. For example, facial recognition is already playing a large role in monitoring and controlling the movements of people in the Corona crisis. China is making use of this to detect infected people and identify people who are not wearing masks.
In Moscow, authorities are reportedly using surveillance cameras and facial recognition and location tracking systems to enforce quarantine regulations and track down infected individuals and their family members.(3) While we recognize that individualism is more valued in Western countries than elsewhere, we believe these practices risk seriously violating the basic human right to privacy - without clear societal benefit.
Censorship and dissemination of false information
IT and telecommunications companies around the world are increasingly facing orders from governments to restrict access to their services and disrupt networks. Such disruptions have resulted in restrictions on the internationally recognized right to freedom of expression, cutting off access to emergency services, payment and healthcare services, and limiting contact with family members and friends.
In some cases, such orders carry an additional risk of human rights violations if they impede the free flow of information in the run-up to elections or if the orders target specific regions, districts or ethnic groups. In the current crisis, we are seeing authorities in China, Iran, and even the U.S. attempting to control information disseminated by journalists and health professionals on social media.
However, we are also seeing a great deal of misinformation being spread, such as holding your breath to check if you are infected, or the recommendation of a wide variety of medications being touted as the solution to the Corona pandemic. In response, large platforms such as Facebook, Google and Twitter are directing consumers to reliable sources of information such as health authorities.
What can companies do?
In the absence of a good regulatory framework, we believe digital human rights bring risks to the companies we invest in. Risks related to data privacy, cybersecurity and the societal impact of AI can have a very negative impact on their business. Therefore, companies can set themselves apart by addressing these issues in an exemplary manner.
As part of our fundamentals-based investment process, Robeco therefore systematically analyzes how companies deal with these issues. To assess the risks in this regard, they examine not only the strength of companies' editorial and information security policies, but also the approach and outcomes when it comes to breaches and fines. Some companies also act more transparently than others with respect to these outcomes.
We combine this analysis with other material aspects such as corporate governance and human resources policies to assess the impact on the value drivers of companies in these sectors. Privacy and cybersecurity risks, as well as societal risks related to AI, are often difficult to quantify in terms of their impact on revenue and cost drivers. Based on our analysis, we therefore primarily adjust our figure for a company's cost of capital to get an estimate for reputational, legal, and business risks.
The tip of the iceberg
In our investment analysis and active influencing of companies, Robeco focuses on imminent risks and challenges such as discrimination or data privacy breaches as a result of building algorithms. We also look at the effectiveness of corporate governance in relation to digital human rights and their impact on human capital, but also at the opportunities that AI offers. All these aspects are essential for the financial success of a company.
Robeco concludes in the SI Opener with a commitment that promises much: "We ask companies to acquire appropriate knowledge at board level and to establish robust policies and processes that ensure human rights compliance in our increasingly digitalized world. We also ask them to be transparent when issues or violations are identified. Lest there be any doubt: Of course, an app that could help track Covid 19 cases and curb the spread of the coronavirus is a good idea. But its success depends on how well human rights are protected."
Link to the original PDF version of SI Opener's #1
Background information about the SI Opener:
As with all rapidly evolving trends, the lack of a sound regulatory framework brings new risks and opportunities for all stakeholders. At Robeco, we recognized many years ago that data privacy is a major business risk for Internet and telecommunications companies. Some companies' business models are based entirely on collecting, using or selling data about consumers. Cyber security and the societal risks associated with artificial intelligence (AI) are therefore points that we focus on when it comes to digital human rights.
We believe that sustainable investing is not black and white. Nor is it about quick fixes or easy answers. We also believe that some common assumptions about sustainable investing may be wrong. That's why we at Robeco like to use our leadership in this field to educate investors about sustainable investing. In our new series of articles titled "SI Opener," we look at surprising aspects that affect Sustainable Investing and human progress. We start with the digital threat to privacy and human rights. With this series we would like to point out that Sustainable Investing is a complex topic and you need a lot of expertise and experience to make the right investment decisions.
Sources:
1) Source: https://techjury.net/stats-about/big-data-statistics/#gref
3) Source: AccessNow.org
