Facebook has been removed from a list of companies that are indexed by S&P Dow Jones Indices as socially responsible, according to a report by CNBC.
The decision for the ousting, which was made on Thursday (June 13), stems from Facebook’s continued privacy issues. The list in question is called the S&P 500 ESG Index, which keeps track of companies that practice responsible social, governance and environmental practices. Companies in the Index have assets totaling $11.6 trillion.
The move comes as Facebook is under increased scrutiny regarding selling people’s data to advertisers. S&P said that while Facebook scored high in the environmental category – 82 out of 100 – its social score was 22 and its governance score was 6. The last two categories are weighed more heavily than the environmental factor.
“The specific issues resulting in these scores had to do with various privacy concerns, including a lack of transparency as to why Facebook collects and shares certain user information,” said Reid Steadman, global head of ESG at S&P. “These events have created uncertainty about Facebook’s diligence regarding privacy protection, and the effectiveness of the company risk management processes and how the company enforces them. These issues caused the company to lag behind its peers in terms of ESG performance.”
Steadman also said there’s always a chance for Facebook to raise its score and return to the Index. “As Facebook’s peers raise the bar in their ESG performance, Facebook will need to do even more to rejoin the ranks of the S&P 500 ESG Index,” he said.
The Index is up around 14 percent, which is in line with how the broader S&P 500 is performing. Wells Fargo, IBM and Oracle were also dropped. Other companies in the Index include Microsoft, Apple, Johnson & Johnson, JP Morgan Chase and Amazon.
Facebook did not reply to a request for comment.