Big Tech Fails to Account for Israel-Palestine Role

Investors have taken action through engagement and exclusion but are being encouraged to double up efforts to increase transparency in the sector.

Research conducted by the Business & Human Rights Resource Centre (BHRRC) has revealed the extent to which tech companies are failing to take responsibility for fuelling the Israel-Palestine conflict, highlighting the crucial role that investors can play in setting the record straight.

In December last year, the BHRRC invited 115 tech companies operating in or providing services to the Occupied Palestinian Territory (OPT) and Israel to respond to a survey focused on transparency and heightened human rights due diligence (HRDD).

Of all surveyed companies, only three responded with specific answers – Ericsson, Hewlett Packard Enterprise (HPE) and TikTok. A fourth – Meta – responded with general information on its due diligence practices.

“Our outreach was largely met with a deafening silence, revealing that tech companies providing services to Israel and the OPT are falling woefully short of their human rights responsibilities,” said Phil Bloomer, Executive Director at the BHRRC. “We are appalled at the opacity of the tech sector given its high risk of contributing to devastation and suffering in the region. Heightened due diligence is not only a fundamental responsibility to this – but in these circumstances, makes compelling business sense.”

It is common practice for companies and investors to adhere to the UN Guiding Principles on Business and Human Rights (UNGPs) – the global standard for business responsibilities on human rights. Guidance on heightened HRDD in conflict-affected areas was also published by the UN Development Programme and the UN Working Group on Business and Human Rights in 2022. However, NGOs have noted that this guidance is largely aimed at businesses, with very little detailed information for investors.

Firms globally are facing further regulatory pressure for transparency and accountability on human rights risks, notably through Europe’s Corporate Sustainability Due Diligence Directive, but also the US government’s plans to introduce HRDD guidance to manage tech firms’ exposures.

Heightened responsibilities

Since Hamas’s attack on Israel on 7 October 2023, tech companies operating in the region have been linked to numerous human rights violations, according to the BHRRC – including the use of AI to target Hamas, censorship of Palestinian narratives, unlawful surveillance, disinformation, denial of internet access, internet shutdowns, and failure to address hate or incitement content.

The human consequences of these violations can range from facilitating civilian killings in bombing campaigns, limiting access to lifesaving information and infringing people’s right to privacy, to increasing hostilities and discrimination against a vulnerable population, the resource centre suggested.

“The private sector has a key role to play in ensuring it is not contributing to further harm in the region – and tech companies, in particular, must recognise their role in this crisis,” said Bloomer. “They must demonstrate they are straining every sinew to avoid worsening the disaster by undertaking heightened HRDD – identifying salient risks and plans to mitigate them.”

Given the danger of perpetuating the conflict, this goes beyond what is normally required of companies, Bloomer suggested, underlining the importance of transparency. Findings from the survey also highlighted the crucial part that investors can play in making the tech sector more accountable on its human rights track record in conflict areas.

“With notable exceptions, tech companies’ apparent sense of impunity sends a clear message to investors and governments: robust regulation and continuous engagement are critical to ensure the sector’s respect for human rights,” Bloomer added. “This shows the central importance of investor engagement to insist these high risks be removed from their portfolios. Responsible investors have to be uncompromising and unstinting in their application of heightened HRDD.”

Poor record

According to the BHRRC, the 3% rate of response to the survey is unprecedented in its history, and a “damning reflection” of the tech sector’s commitment to transparency as a “foundational tenet” of corporate accountability.

Amazon, Apple, Google, Microsoft, Siemens and Spotify were notably among the 111 companies that ignored the survey.

“BHRRC’s work comes at a time when major data providers are not sufficiently covering human rights issues in conflict-affected areas,” said Tulia Machado-Helland, Head of Human Rights and Senior Sustainability Analyst at Storebrand Asset Management. “This is very valuable information for investors conducting enhanced HRDD in their portfolios.”

Earlier this year, Storebrand excluded First International Bank of Israel (FIBI) for its involvement in the OPT, singling it out for contributing directly to the establishment, expansion and maintenance of illegal Israeli settlements in the region through its direct financial activities.

Machado-Helland said she was not surprised by the BHRRC survey results. Despite guidance being available on the subject, company policies typically reveal very little or no mention at all of international humanitarian law.

“Since we have started engaging with companies on conflict areas, we find that they either do not answer, or they say that they follow all local laws and regulations and don’t take sides in conflicts and are aligned with UNGPs – without describing what this means in practice,” she added. “As would be expected for conflict areas, even fewer of them refer to mitigating measures, remediation, or stakeholder engagement.”

Of all companies surveyed by the BHRRC, HPE was the only one whose human rights policy contained measured on enhanced HRDD in conflict areas. Despite reports on the role that social media has played in contributing to abuse in the Israel-Palestine conflict, only two of the seven social media companies included in the survey – TikTok and Meta – provided details on measures taken to combat the dissemination of misinformation, hate speech, and incitement to violence.

“Clearly, investors have a greater role to play in holding companies accountable for respecting human rights,” said Machado-Helland. “We see a growing interest among investors in discussing heighted HRDD with companies in conflict areas, reflected in educational workshops offered by the Investor Alliance for Human Rights (IAHR) and the PRI Advance initiative.”

Advance is a collaborative initiative helping institutional investors advance human rights and positive outcomes through stewardship. Storebrand is also part of the Investor Engagement on Conflict-Affected and High-Risk Areas (CAHRA), coordinated by the IAHR, Heartland Initiative and Peacenexus.

“Investors must use their collective voice and demand international business standards are upheld by the tech sector,” said Bloomer. “They must urgently insist on heightened due diligence, risk mitigation and stakeholder engagement in the context of this conflict – as they have done in others. Unwillingness to proceed with these basic steps only serves to increase the risk of business complicity in the unfolding humanitarian crisis.”

Engagement and exclusion

Since 2009, Storebrand has been working on the issue of managing risk related to the OTP, developing a set of criteria to assess the extent to which companies contribute to the regime resulting from Israel’s occupation. These include: providing surveillance and identification equipment at checkpoints; contributing to the construction, maintenance and expansion of settlements and exploitation of natural resources, including infrastructure and direct financing; and buying goods or services from companies with operations in Israeli-occupied territories.

Companies falling within the first and second categories are candidates for engagement and potential exclusion, if engagement fails. As part of its Q1 2024 sustainable investment review, Storebrand decided to exclude US-based multinational tech company IBM, bringing instead tech and consulting services group DXC Technologies within its investment universe.

“Over the years, we have excluded over 20 companies on these issues, and the exclusions are publicly documented on our website,” said Machado-Helland. “Furthermore, we engage in collaborative efforts to improve methodologies that all businesses can utilise to address this type of harms and violations of human rights in CAHRA – including Palestine.”

Last year, the asset manager also began collaborating with a group of NGOs and investors to develop and pilot a process for identifying, analysing, prioritising, and managing portfolio risks linked to business operations and relationships in CAHRA.

But Storebrand isn’t the only investment manager that has taken action in this field. In 2021, Norges Bank Investment Management (NBIM) – which runs Norway’s sovereign wealth fund – excluded Israel-based international conglomerate Elco and real estate and infrastructure development group Electra. The decision following a recommendation from Norway’s Council of Ethics, which found “unacceptable risk that the companies contribute to systematic violations of individuals’ rights in situations of war or conflict”.

“As a responsible investor, we expect that the companies we invest in respect human rights,” said Line Aaltvedt, Head of Communications at NBIM. “In our ownership efforts, we have had dialogues with companies with operations and business connections to war and conflict areas, and have aimed to understand their guidelines and risk assessments, encouraging them to prevent, manage and report risks.”

Last year, however, NBIM had to face action from pro-Palestine protesters, who blocked the entrance of its headquarters in Oslo, accusing its asset management arm to profit from war crimes in Gaza through investments in the arms industry.

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