Press Release

Human rights risks of targeted advertising warrant third party assessment, shareholders say: significant support among investors on eve of vote

TORONTOAlphabet shareholders will vote on June 2 on a proposal requesting third-party scrutiny of the company’s targeted advertising system.

The proposal calls for the company to undertake a human rights impact assessment (HRIA). Filed by the Shareholder Association for Research and Education (SHARE) on behalf of the United Church of Canada Pension Plan, the proposal speaks to growing concerns that Alphabet’s advertising infrastructure relies on technology that has not been subject to a robust human-rights due diligence process. This kind of assessment would identify, address and prevent the potential adverse human rights impact of targeted advertising technologies.

“Alphabet’s targeted advertising business represents about 80% of the company’s revenue, which means that until a rigorous assessment is done, its shareholders are exposed to a litany of regulatory, legal and reputational risks,” said Sarah Couturier-Tanoh, Associate Director Corporate Engagement and Advocacy at SHARE. “Ultimately, the lack of clear oversight puts investors’ long-term value at risk.”

Investors and proxy advisors agree with SHARE’s perspective. Glass Lewis and Institutional Shareholder Services (ISS), the dominant proxy advisory firms, are recommending in favour of SHARE’s proposal. Large U.S.-based pension funds CalPERS, CalSTRS, New York City pension funds, and Norges Bank are among the investors who have publicly declared that they will support the proposal.

Alphabet is a “controlled” company, with a large portion of shares controlled by insiders, through a dual-class share structure which affords outsized voting power to certain shares.

Alphabet has taken limited  steps to mitigate the risks associated with targeted advertising, but according to Couturier-Tanoh, these are insufficient relative to the scale of the risks themselves said Tanoh.  “A third-party assessment will provide the proper expertise, independence, and comprehensiveness to ensure investors, users, and regulators that the company is taking these risks seriously.”

The Annual Meeting of Shareholders is being held on Friday, June 2 at 12:00 PM EST through a virtual format.


For more on the rationale for this proposal, read SHARE’s exempt solicitation here.

Contact: Jennifer Story, 416.461.6310


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