Alex Vynokur

The Responsible Investment Committee (RIC) of the BetaShares Global Sustainability Leaders ETF (ASX: ETHI) has determined that Facebook will be removed from the index that ETHI is designed to track, and accordingly will be removed from the ETF.

The RIC is responsible for determining the list of securities that pass the responsible investment screens outlined in the index methodology.

Facebook has historically qualified for inclusion in the Fund’s index on the basis of its strong global leadership on carbon emission metrics (which are nearly 80% better than its industry peers) as well as its responsible advertising and other policies.

However, the company has in recent times been the subject of a number of controversies and reputational issues, which the RIC has been monitoring on an ongoing basis.

These issues include (but have not been limited to) the recent scandal involving data analysis company Cambridge Analytica’s use of personal data from 50 million Facebook users who did not agree to the use of their data.

The combination of the recent serious data breach with other previously identified issues has caused the RIC to determine that Facebook is no longer eligible for continued inclusion in the index (and, as a consequence, in the ETF).

With $170 million in funds under management, ETHI is the largest global ethical ETF traded on the Australian Securities Exchange.

“As a provider of a true-to-label ethical ETF, we have been careful to ensure there is diligent and ongoing monitoring of the constituents of the fund, to ensure the ETF continues to meet its objectives and those of its investors,” said BetaShares Chief Executive, Alex Vynokur.

Facebook (NASDAQ: FB) currently comprises 3.9% of the ETHI portfolio.

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