It has been a bumpy ride for financial markets in 2022 and technology stocks have been particularly volatile due to factors such as rising interest rates affecting many companies in the sector. The impact of these movements has been especially evident in US stock markets, where Technology is the largest sector to make up the S&P 500.
In fact, even the hugely popular FAANG stocks (the likes of Google, Apple and Facebook – now META) have demonstrated considerable turbulence in recent months
Despite the short-term headwinds facing the sector, there are a number of technology companies playing a crucial role in improving society and facilitating our transition into a more sustainable planet. So, naturally, our Ethical Plans have a healthy exposure to technology stocks to support them with their advancements and developments, and for our customers to benefit from these long-term trends.
Below are 3 companies in our Ethical Plans that are utilising technology to have a positive impact on their customers and the wider community.
Spotify 🎵
Spotify has a unique and powerful position to inspire change as the world’s largest audio streaming service.1 One way the company takes advantage of this is by providing a platform for underrepresented voices, such as the LGBTQIA+ and ethnic communities.
An example of this is the recent ‘Stop Asian Hate’ programme, which was initiated to support Asian American and Pacific Islanders following the misplaced blame on the community after the spread of Covid-19. As part of this campaign, Spotify created a number of playlists to raise awareness of the issue, provided information to educate consumers, and allocated resources to help people support the community. The company has also matched the $10million of donations that were made by its employees to racial equality organisations.1
Another way Spotify positively impacts society is through the work they do with mental health. The platform offers an extensive library of mental health themed podcasts for its audience in over 170 countries, and the company has also launched several initiatives for its employees. This includes ‘Wellness Week’ where staff receive a paid week off to focus on their health and mental well-being.
However, the company previously faced criticism following the spread of misinformation regarding Covid-19 through various podcasts broadcast on its platform (which is a topic that we have actively engaged with Liontrust about). In response to this, Spotify played various adverts to its listeners that highlighted the benefits of getting vaccinated, which made 17million impressions in the US. A playlist was also created consisting of vaccine-related songs which was streamed over 48million times.
Spotify also places significant importance in environmental issues, encouraging education and inspiring action by sharing climate change content with its vast number of listeners.
Spotify features in the Liontrust Sustainable Global Growth Fund.
GB Group 🔎
The adoption of technology within countless processes and facets of daily life has unfortunately also introduced cybersecurity threats and risks. One key threat which is on the rise is fraud, with 4.6million offences being believed to have occurred in England and Wales in 2021.2
One company that focuses on preventing such threats is GB Group, a British company that helps organisations across the world to validate and verify the identity of their customers.
GB Group’s services have resulted in numerous positive outcomes around the world. In 2020, the company partnered with a fraud prevention bureau in South-East Asia and together they have already prevented confirmed fraudulent credit applications worth a total of £5million.3 In addition to this, utilising GB Group’s technology has also resulted in a 67% reduction in the fraudulent applications received by leading South African retailer, HomeChoice.4
Besides fraud prevention, GB Group also seeks to positively impact society by donating laptops to young carers. The company also boasts stellar environmental credentials and has committed to being carbon neutral in its operations by next year.
The prevalence of fraud has led to the value of the global identity verification market reaching a colossal $10bn in value, and this is expected to continue to expand rapidly going forward.3 The Group’s innovative offerings has also seen its revenue increase by 323% since 2015, demonstrating the company’s significance in an increasingly important industry.
GB Group features in the Liontrust Sustainable UK Growth Fund.
Agile Technologies 🔎
Agilent Technologies is a leader in life sciences and diagnostics, and like Spotify and GB Group, it serves numerous communities around the globe, boasting customers in 110 countries. Across its businesses, the company provides 50 technology platforms which seek to improve people’s health and safety by providing reliable information on these topics to its users.
There are six ‘end markets’ that Agilent Technologies aims to positively influence through its platforms, such as ‘diagnostics and clinical’. The company invested $441 million in several technologies in this market alone in 2021 with the goal of improving the quality of life.5
Other end markets include ‘chemical and energy’, in which new technology such as biofuels is developed, and ‘food’ where the company’s software ensures that the supply chain is safe through rigorous testing and surveillance. The combined value of the opportunity in the six end markets is estimated to be a staggering $65billion.5.
Agilent Technologies features in the Royal London Sustainable Leaders Trust.
To wrap up 🎁
2022 has served as a valuable reminder of the volatility associated with investing in technology. However, the scale of the opportunities available does mean that this risk is coupled with the potential of achieving strong returns in the long-term.
After all, as more and more aspects of our lives become digitalised over time, and the importance of ensuring efficiency continues to grow in many industries, the value of innovation stemming from technology will also rise considerably.
Technology companies such as GB Group, Agilent Technologies and Spotify have established unique and effective platforms to take advantage of these opportunities as well as to substantially improve their and wider society’s ESG (Environmental, Social and Governance) practices.
- https://www.lifeatspotify.com/diversity-equity-impact/racial-equity
- https://victimscommissioner.org.uk/news/who-suffers-fraud/#:~:text=4.6%20million%20people%20are%20affected,report%20from%20the%20Victims'%20Commissioner.
- https://www.gbgplc.com/media/dnlc1w5d/annual-report-and-accounts-2022.pdf
- https://www.gbgplc.com/en/our-customers/homechoice/
- https://www.agilent.com/about/esg/en/2021-agilent-esg-report.pdf
