Carried out with the help of EthicsGrade, a UK-based company specialising in corporate digital responsibility ratings, this study examined the practices of the 48 largest listed companies in Switzerland (SMI Expanded). The results show that companies still lack transparency about their digital practices and that their degree of preparation for issues such as ethics in artificial intelligence are still in their early stages. Ethos and EthicsGrade have already planned to reconduct the study in 2022 and 2023.
Ethos publishes this Wednesday a first study on the digital responsibility of companies listed in Switzerland. Carried out in collaboration with EthicsGrade, a UK-based company specialised in the ratings of companies according to their digital responsibility, it aims to measure the degree of preparation of the largest Swiss companies to face the growing challenges of the digitisation of the economy.
“In December 2020, we published an Engagement Paper which identified good practices in terms of digital responsibility, and which drew up a list of seven expectations for listed companies with which we constantly engage on ESG topics, explains Vincent Kaufmann, CEO of Ethos. After sending this report to the board of directors of the 48 companies in the SMI Expanded, we wanted to assess their current practices so that we could identify any gaps and highlight certain points during our dialogue activities.”
To perform this study, a questionnaire in seven chapters – addressing governance, transparency, data protection, artificial intelligence, sensitive activities as well as the social and environmental impact of digitisation – was sent to the targeted companies. At the same time, EthicsGrade analysts examined through all documents and public information of these companies to fulfil the survey themselves. Depending on the responses collected, a final score was assigned to each company and for each chapter.
Very low results
The results are striking: the average points collected stagnated at 10.5 points out of a maximum of 100, with only four companies exceeding 20 points. While the insurance sector seems to be the most advanced – with an average of 17.3 points – the banking and healthcare sectors, which are also particularly concerned by issues related to digital responsibility, remain behind with averages of 10.3 and 11.1 points respectively.
Another observation was that only 12 companies responded to the questionnaire, which most of the time allowed them to specify the existence of certain non-public practices and policies and thus increase their final score. It is therefore not surprising that among the seven companies that obtained the best score, five answered the questionnaire. The average thus rises to 15.4 points for the twelve companies which took part against only 8.9 points for the 36 others.
The low overall level is therefore partly explained by the lack of transparency of companies in terms of digital responsibility. For instance, only three companies clearly indicate that they have implemented ethical principles for the use of artificial intelligence and five confirm the existence of an ethical framework for data management. Only three companies also state that they have already assessed the impact that the digital transition could have on their workforce and communicate on this subject and five say that the recyclability of IT equipment is one of their purchasing criteria.
The beginnings of digital responsibility
However, according to EthicsGrade, Swiss companies do neither better nor worse than their foreign counterparts. “While our study reveals that large Swiss companies are still at an early stage of digital responsibility, we also noticed that there are examples of good practice for almost all points of our questionnaire, underlines Charles Radclyffe, CEO of EthicsGrade. This is encouraging and we hope there will be a consolidation of these best practices in the future so that real leaders can emerge and set an example for other companies.”
For Ethos, the digital responsibility of companies is one of the emerging but crucial topics for the future of socially responsible investment. Ethos will therefore continue and intensify its dialogue with companies to make them even more aware of the issues related to the digitisation of the economy. Shareholders play a key role in encouraging the companies they co-own to act, whether to better protect private data, ensure that artificial intelligence is used responsibly or reduce the social and environmental footprint of their technologies or, in general, the use of technology.
At the same time, Ethos and EthicsGrade have already planned to repeat this study in 2022 and 2023 in order to be able to measure the evolution of practices. Ethos also hopes that companies, which are more aware of these issues and of the need for transparency in this regard, will be more likely to answer and actively participate in our questionnaire next year.