ESG Review: Meta Platforms, Inc.

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Social media has grown rampantly over the last couple of years or so. It’s hard to blame people for being captivated by the allure of reconnecting with friends and family online. In times like the pandemic, social media platforms have become great avenues for socialization when people can’t do otherwise.

One of the leading brands when it comes to social media is Facebook. The platform has been the undisputed king of social media over the last decades and it seems like there’s no stopping it. For impact investors such as yourself, does Facebook or Meta Platforms, Inc. prove to be a good name for impact investing?

Company Background

In 2003, Harvard University student Mark Zuckerberg built a website called “Facemash.” The website competed university students against each other in a game of “hot or not.” The website was an instant hit but was shut down by the university administration a few days later.

After a host of troubles with the administration, Zuckerberg continued his plans on creating a student directory, which led to the creation of TheFacebook. With help from an investment by a fellow student, Eduardo Saverin, launched in 2004. It wasn’t until in 2006 that Facebook launched to the public.

Since then Facebook has become the biggest social media platform out there. In fact, it might have led to the rise of social media platforms in general. The company went on to incorporate other social media platforms such as WhatsApp and Instagram into its ecosystem. As of this writing, Facebook currently has 2.9 billion users on its platform – a huge lead over its competitors.

Facebook, Inc., as it was formerly called, changed its name to Meta Platforms, Inc.(NASDAQ:META) in Oct. 2021. The name change was done as a means to signify the company’s shift towards implementing metaverse technologies into its systems. Although there’s a new vision for the company, Meta Platforms, Inc. is and will always still be a social media-focused company.

As big a name as it is, it might be an interesting find for investors. But of course, impact investors like yourself will probably want to check out what the brand has to offer in terms of ESG first. Here’s our company scorecard on Meta Platforms, Inc.

Environmental Concerns

As it deals in the field of digital media and social media, Facebook doesn’t directly affect the environment through waste. However, it consumes a lot of power and produces carbon emissions through its services. Meta Platforms, Inc. makes its environmental impact concerns well-known.

Let’s discuss the company’s move toward the metaverse first. A recent study reveals that the metaverse could lead to an increase in greenhouse emissions. As per the research firm’s data, a single AI model can generate around 626,000 pounds of carbon dioxide. Meta Platforms, Inc plans on increasing its projects towards virtual reality technology and cloud gaming. Both of which can increase carbon emissions by 2030 as well.

Oddly enough, Meta Platforms, Inc plans on reaching net-zero emissions by 2030. So far, the company has yet to reveal how they plan on achieving this goal, all while shifting its focus toward the metaverse. This is a major oversight in Meta Platforms, Inc’s ESG score from other sources.

Still, the company has its fair share of efforts geared toward’s environmental concerns. As of 2021, the company has a total of 28 certified LEED Gold data centers, which amounts to 17 million square feet. Six of those data centers got their LEED Gold certification just in 2021.

Each of the sites is focused to promote biodiversity, plant native and adaptive landscapes, and more. With the help of the Forestry Stewardship Council (FSC)-certified sources, the company is able to save around 80,000 kilogallons of water annually.

Meta Platforms, Inc says this when it comes to its environmental efforts:

“We are committed to creating a positive impact on the communities where we operate. That is why all of our renewable energy projects are interconnected to the same electric grid as our facilities. This map highlights our renewable energy procurement and deployment efforts worldwide, water stewardship efforts in the communities we operate in, as well as sustainability features across our global portfolio of data centers.”

While its plans are impressive, there’s still the worrying matter of how its metaverse projects will affect carbon emissions moving forward. Hopefully, Meta Platforms, Inc. addresses this problem soon.

Social Concerns

Meta Platforms, Inc. is a business that focuses on bridging gaps between socialization digitally. As that is the main business of the company, it shouldn’t be surprising that it takes a lot of care and effort when it comes to addressing social concerns surrounding the company.

Facebook continues to drive its social projects actively through the platform. For instance, if a calamity hits a certain nation, Meta Platforms, Inc. will add a feature to Facebook that will let people easily get updates or even donate to the affected areas or the victims. The company has also added a Blood Donations tool which helps people register as blood donors and find local blood banks on the platform.

When New South Wales in January 2020, Celeste Barber – an Australian actress-comedian, used Facebook fundraisers to help bushfire relief efforts. Her efforts became one of the biggest in the platform’s fundraising history as it generated $36 million from the NSW Rural Fire Service and Brigades Donations Fund.

Responding to emergencies and calamities is one of Facebook’s biggest strong suits in social concerns. The company has also made it easier for everyone to mark themselves safe during an earthquake, typhoon, or some other natural disaster.

Moving on, Meta Platforms, Inc. maintains a lot of integrity when it comes to its workforce. In 2021, the company has reached several milestones when it comes to its employees:

  • It has increased the representation of women in technical and non-technical leadership roles globally. In the US, it has done the same for Black and Hispanic employees.
  • The company went above its employment rates for underrepresented minorities, people with disabilities, and veterans which now make up 45.6% of its workforce.
  • Facebook’s Responsible Innovation Dimensions and Inclusive Product Councils are shared with its employees to build more accessible and equitable products.
  • It has increased Black leadership by 38.2% in 2021.

Facebook has taken extra steps to ensure that it provides equal opportunities for minorities and underrepresented groups. It’s safe to say that it has become a role model with its fast pace over the last year.

Let’s talk about another pressing matter though. Facebook’s handling of data in the past has been far more than satisfactory. The Cambridge Analytica scandal is one of the biggest issues that the company has faced. 

As per reports, Cambridge Analytica allegedly misused data provided by Facebook, which in turn helped then-running candidate, Donald Trump as he was running for the presidency. Reports also suggest that Cambridge Analytica first tested out the experiment in the Philippines 6 months prior to what they did in the United States.

Mark Zuckerberg has refuted that they’ve sold data to Cambridge Analytica but the scandal has indeed put a dent in Meta Platforms, Inc. How the company handles user data is one of its biggest issues and this has since affected how the company performs during ESG ratings.

While Meta Platforms, Inc. has ramped up its privacy and data security efforts over the last years, it seems like people are still untrusting Facebook and how it handles data.

Last but not the least, it’s time to talk about Meta Platforms, Inc.’s human rights abuses. The company has been accused of tolerating online abuses made by online users of Facebook. These abuses then resulted in cases of violence in the real world. The company has taken notice of the issue in its first human rights report as Meta released later this year.

Meta Platforms, Inc. apparently did not take action for a variety of reasons. Meta Human Rights Director Miranda Sissons said in an interview with Reuters that, “affected stakeholders, personnel or to legitimate requirements of commercial confidentiality,” are a part of the reasons.

Meta Platforms, Inc. is one of the latest tech giants to release a human rights report but that doesn’t spare the company from rough criticism.

Governance Concerns

Talking about governance, Meta Platforms, Inc. and Mark Zuckerberg have faced a lot of lawsuits over the last couple of years. The biggest lawsuit they have was settled last year when the company settled to pay $37.5 million when it was accused of tracking users through their smartphones.

Just this year, the company has faced a total of 17 lawsuits – most are related to privacy violations of Facebook. Meta Platforms, Inc. has faced all of these issues head-on but that doesn’t spare them from the fact that they’re a common customer in the courtroom.

Aside from private individuals and firms, the company also settles lawsuits in the courtroom against entire communities due to its practices. 

The company’s board of directors is diverse. Its executive tree includes 23 people, many of whom are either female or from a different ethnicity. This is good, especially considering that the company is pushing to have more women and underrepresented groups in leadership positions within the company.

Salary-wise, not much is known regarding how executive pay compares to employee pay at the company. Mark Zuckerberg’s salary is reported as $1 in filings for the SEC. However, the company still shoulders millions worth of dollars for the CEO’s security and travel. This has been the trend for years which leaves many to question why the CEO goes for such a small salary.

The highest-paid executive in the company is Sheryl Sanberg who makes around $900,000 base salary. The highest-paid employees are senior developers who make $117,000 annually.

The good news is that upon checking online, you’ll be hard-pressed to find any complaints about how the company compensates its employees which may be a good sign overall.

The company does a great job when it comes to its charitable works. It does make a lot of effort when it comes to supporting small businesses and companies on the platform. It also does a great job serving as a fundraising platform for various causes around the world. 

Compared to other platforms, Facebook gives all of the fundraised profits to their beneficiaries. Platforms like GoFundMe and others take a small cut.

But how does it fair when it comes to doing charitable work directly?

In 2015, Mark Zuckerberg and his wife, Dr. Priscila Chan donated 99% of their Facebook shares to charity. At the time, both shares combined amounted to over $45 billion.

The company itself isn’t active in engaging in charitable work or donating to NGOs directly. However, considering its approach to fundraising, the company still does well in this regard.

Apart from its lawsuits, the company does a sub-par job when it comes to governance concerns too. It’s lack of direct charitable work can be problematic for most impact investors which is why it’s imperative that the company moves on to more charitable ventures in the future.


Unfortunately, we’d have to give Meta Platforms, Inc. a 60 out of 100. It does have a solid plan when it comes to its environmental efforts but the uncertainty of how the metaverse will affect its plans for the future puts its projects into question. Hopefully, Meta Platforms, Inc. becomes more clear about how it will go with this moving forward.

Another major reason for its score is Meta Platforms, Inc.’s refusal to do any direct actions on the human rights abuses done on Facebook. Still, we highly commend Meta Platforms, Inc. for being able to make fundraising and emergency planning in times of need easier on Facebook. The company’s governance issues are something that can’t be overlooked as well.

The good news is that with its new name, comes a more solid plan for the future. If Meta Platforms, Inc. is able to fulfill its plans for ESG, then its score can definitely increase moving forward.