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Newton – ESG: On the radar of the tech giants

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As the world slowly emerges from the pandemic, we assess the technology sector’s shifting attitudes to ESG issues.

  • The five US technology giants were collectively worth twice as much as the FTSE 100 index at the end of May 2020
  • Their growing dominance has led to calls for greater regulation to counter this
  • Technology giants are starting to address some of their own environmental, social and governance (ESG)-related issues, but much more needs to be done

 Investors and the wider public are increasingly likely to demand ESG improvements from them, and may punish those that drag their heels.  

We have long talked about how disruption permeates a broad range of sectors, from traditional retail through to media and health care. At the epicentre of this disruptive shift is technology, which has undergone profound change over the last two decades, as the hype of the dot-com era has finally come to fruition. 

This has been amply reflected in share-price performance, with the five US technology giants, or so-called ‘FAANG’ stocks, worth more than the entire FTSE 100 index at the end of May 2020.[1]  But how does ‘big tech’ fare from an environmental, social and governance (ESG) perspective, and have these aggressive market-share gains come at the expense of good corporate behaviour?

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