EthicsGrade’s latest quarterly ratings reveal the global companies implementing good governance, commensurate with their digital strategy, as well as those whose rankings have slipped in 2022.
Telecoms and IT companies performed well in the latest rankings, with online dating platforms performing worst - lacking transparency in data protection and security protocols.
Of the 330 companies graded, the average score was 50.61 or a ‘C rating’ suggesting the majority of companies are yet to integrate environmental, social and governance (ESG) policies within their digital strategy.
EthicsGrade’s AI model reveals that only a handful of companies, including Microsoft, and Deutsche Telekom, achieved an A rating in the latest rankings.
Microsoft and Deutsche Telekom were marked highly across their technology governance, including cyber and privacy-related safeguards, and consideration of the environmental consequences of their digital strategy.
Charles Radclyffe, Managing Partner, EthicsGrade said: “As one of the largest tech conglomerates globally, Microsoft has significant reach and responsibility. Its ESG and good governance strategy provides a high standard for the policy and efforts for the rest of the tech industry; although sadly many others are nowhere near the same level.”
Companies with highest corporate digital responsibility rankings:
1. Microsoft = 82.80 A
2. Deutsche Telekom = 82.68 A
3. Cisco Systems = 80.17 A
4. Sony = 76.70 B
5. Merck Group = 77.79 B
Companies with the biggest gains in corporate digital responsibility
1. JP Morgan Chase = +10.81 from 52.76 D to 63.57 C
2. Sonova = + 9.69 from 44.50 R to 54.19 D
3. OC Oerlikon Corporation = +6.83 from 46.36 R to 53.19 D
4. Tekada = +6.46 from 46.70 R to 53.16 D
5. ENGIE = +6.20 from 46.43 R to 52.63 D
The worst performing companies with little or no corporate digital responsibility
1. Gazprom = 1.20 NR
2. Renren = 11.95 NR
3. Scoop.it =14.55 NR
4. Rosneft = 16.34 NR
5. Plenty of Fish = 17.23 NR
1. Gazprom = -44.34 from 45.54 R to 1.20 NR
2. Rosneft = -40.32 from 56.66 D to 16.34 NR
3. VK = -12.99 form 57.02 D to 44.03 R
4. Vanguard = -9.41 from 37.04 NR to 27.63 NR
5. BMW = -7.41 from 66.75 C to 59.34 D
Telecoms & Communication and IT were two of the highest performing industries
Both telecoms and the IT sector have companies demonstrating a high quality of privacy and security policies, along with data and technology ethics principles.
Cisco (80.17) and Ericsson (74.95) both demonstrated a high-level of digital governance, public policy, privacy and sustainability; frequently publishing house-views and policies on these topics and contributing to wider public conversation.
Similarly, Deutsche Telekom is the second highest scoring organisation that EthicsGrade has rated. It exhibits a high degree of transparency regarding data ethics and AI.
Lowest Performing Industries
Online dating platforms
With more people using online dating platforms, they hold a large amount of very personal data. However, EthicsGrade was unable to identify meaningful transparency into their data and security protocols, how they are ensuring the use of AI and automation responsibly, and how they safeguard their users from cybersecurity risks, aside from catfishing.
Given these platforms rely on the use of matching algorithms in order to provide services to potentially millions of users with very small back-office teams, it’s critical that users can trust not just the person they are matched with, but the match-making AI with their heart.
Five of the largest online dating platforms in the UK: Tinder (27.23), Hinge (28.62) , Plenty of Fish (17.23), Match.com (18.64) and Grindr (31.76) were all below the tenth percentile of rated companies, and with insufficient data received a not-rated (NR) grade. This highlights the lack of transparency across this sector.
Over the last quarter, EthicsGrade saw a significant decrease in scores for companies based in Russia. Its analysts were unable to access Gazprom, Rosneft and VK’s corporate information due to their websites becoming blocked in outside territories, following the war in Ukraine.
Lowest scoring Russian companies:
Gazprom -44.34 from 45.54 R to 1.20 NR,
Rosneft = -40.32 from 56.66 D to 16.34 NR,
VK = -13.04 from 57.07 D to 44.03 NR
Geopolitics has an unintended impact on ESG ratings agencies, which are struggling to accurately ascertain the ESG risks of companies on the other side of the Russian firewall.
While this will matter less to the asset management industry, as most western investors will have already exited their holdings in Russia – this does have a bearing on other stakeholders, most notably consumers, employees and the Russian supply-chain, who, despite the macro-geopolitical landscape will be reliant on free and open data-sources like EthicsGrade to determine which companies they engage with best align to their values.
Charles Radclyffe continued: “Investors should see red flags at global companies which are unrated for data governance, particularly if their business models rely on AI and data analytics. Organisations that receive an ‘NR’ rating are not being sufficiently transparent about their technological governance and thus have failed to fully integrate ESG principles across their core business operations.”