In December 2021, United Church Funds (UCF) filed a shareholder resolution calling on Meta, the parent company of Facebook, to prepare and publicly release a report, updated annually, disclosing its lobbying activities, payments made toward those activities and a description of the company’s decision-making and oversight processes with regard to those payments.
That resolution, known as Item No. 13, will be voted on at the 2022 Annual Meeting of Shareholders of Meta Platforms on May 25.
“The staggering and at times secretive influence that corporations have over our democratic institutions should be a concern for all Americans,” said Matthew Illian, UCF’s Director of Responsible Investing. “Along with many other faith and values investors, UCF continues to call on corporate America to transparently disclose the money it spends on lobbying efforts. To support this work, we urge all Meta shareholders to support Item No. 13.”
Lack of Transparency Erodes Trust
In 2021 alone, Meta spent $20.1 million on U.S. federal lobbying, the most of any tech company. In the same year, Meta spent €6 million ($6.4 million) lobbying in Europe, the second largest lobbying spender across the continent. Yet Meta fails to itemize how these amounts are spent and does not provide sufficient detail on their lobbying activities and oversight by its management and board.
Climate-sensitive investors are especially clear on lobbying disclosure and have developed a “Global Standard on Responsible Corporate Climate Lobbying” that calls for full disclosure of the amounts paid to lobbying organizations as a measure of the influence that these corporations have over the issue and organization.
Publicly, Meta has taken some strong leadership positions on climate change, with pledges to use renewable energy to power its operations and reduce its carbon footprint. Yet Meta is a member of and contributes to several public policy organizations such as the Competitive Enterprise Institute and State Policy Network, which are strong critics of climate science and opponents of legislation to address climate change. When corporations fail to disclose the amounts that they give to these organizations, investors and public are often left wondering what they may be hiding.
Every so often, an investigative journalist will uncover hints of secretive corporate influence that are particularly concerning. One such story about Meta was published on May 17, 2022, by the Tech Transparency Project. It revealed that Meta was the sole contributor of $4 million used to launch the dark money group, American Edge Project (AEP). Dark money groups are so named because they are not required by law to disclose their donors. However, they do need to disclose how much money they have raised and how many donors they have. When the Tech Transparency Project found that AEP only had one donor, it was able to determine through Meta’s own disclosure that the sole donor had to be Meta.
AEP has used this initial $4M investment – and what are assumed to be additional grants – to lead a lobbying campaign to protect the tech sector from its greatest fear: limits on its own power. AEP’s efforts are designed to avoid regulation on data privacy and anti-trust laws that would impact the tech sector. Not only is the amount of money concerning, but AEP uses much of this funding to place Facebook ads directly to users so that it appears that an independent voice is speaking when, in fact, Meta is paying for this content.
A Wider Problem Across the Tech Universe
Meta is not alone in spending millions on lobbying they do not disclose. New best practices need to be developed across the tech sector. Tech giants Amazon and Google, for example, also have lobbying disclosure resolutions pending, because their own disclosures have been deemed insufficient.
“As investors and as citizens, we are not opposed to corporations using their perspectives and their voice to shape federal policy and public opinion transparently,” Illian explained. “The problem arises when this persuasion happens secretively – and when companies act in ways that can lead to great public distrust.”
The failure of Meta and other companies to disclose the amounts they give to lobbyists opens up these corporations to unnecessary reputational and financial risks and poses serious problems for values-based investors like UCF. In an effort to address these vitally important issues, we urge all Meta investors to support Item No. 13.
 Standard 13 of the Global Standard on Responsible Corporate Climate Lobbying, 2022_global-standard-responsible-climate-lobbying_APPENDIX.pdf
 https://cei.org/studies/a-citizens-guide-to-climate-change/; https://www.fastcompany.com/90424503/facebook-google-amazon-are-ramping-up-their-secretive-influence-campaigns-in-dc; https://www.theguardian.com/world/2013/nov/14/facebook-microsoft-rightwing-lobby-network-spn.