It’s too early to predict how COVID-19 will reshape the future. The travel, entertainment, hospitality and personal-services sectors have already been devastated. A Canadian Federation of Independent Business survey found that 32% of owners who had shut down their businesses in March were unsure if they would ever reopen.

The media has also identified the first winners of this global reckoning. Setting aside for a moment the immeasurable personal tragedies caused by the virus, here are some preliminary results:

• Greater concern for the environment could be COVID’s legacy, wrote columnist Gwynne Dyer. “The clean air over China’s cities in the past month, thanks to an almost total shutdown of the big sources of pollution, has saved 20 times as many Chinese lives as COVID-19 has taken . . . People will remember this when the filthy air comes back and want something done about it.”

• Movements for social change may be empowered by governments’ rapid moves to restrict behaviour and unleash financial support. At TheConversation.com, U.K. economist Simon Mair said the virus “is expanding the economic imagination. As governments and citizens take steps that three months ago seemed impossible, our ideas about how the world works could change rapidly.”

• Retail and food workers are finally getting some respect, with companies such as Maple Leaf Foods, Loblaw, Sobeys, Metro and Walmart granting raises to frontline staff, introducing the concept of “hero pay.” Though Corporate Knights asks whether $2 extra an hour is enough for the grocery employees putting their lives on the line. Canadian banks are giving frontline employees an extra $50 a day and additional paid time off; TD Bank Group is giving bonuses of up to $1,000.

• Tycoons such as Bill Gates, Mark Zuckerberg, Jack Ma and Elon Musk, in most cases, polished their reputations by funding hospitals, medical supplies and research. But the Canadian billionaire community, wrote the Toronto Star’s David Olive, “has hardly been heard from on arguably the greatest crisis Canada has ever faced.”

• Manufacturers of everything from hockey skates to gin began retooling to deliver personal protective equipment to those who need it most. Heavyweights that have stepped up include H&M, Ford, GM, Dyson and Gucci’s parent company, Kering. Several companies have been saluted for establishing COVID relief funds, including Facebook, which set up a US$100 million relief fund for businesses in 30 countries, and meal-delivery companies, whose services helped thousands of restaurants stay open. Facebook also set up an additional US$100 million fund to support news media. Sony, Netflix and Amazon created their own US$100 million global relief funds — though striking Amazon employees say not enough is being done to keep them safe.

And then there are the hidden heroes: the workers delivering essential services across dozens of sectors, as well as anyone who is stepping up to support aging relatives during the crisis, check up on their neighbours, shop for the quarantined, donate money or haul canned goods to food banks. We’re banging on our pots and pans in thanks for you, too.

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The social media giant isn’t actually so bad on environmental measures. In fact, it hit its target of getting 50% of its energy from renewable sources by 2018 and plans to be 100% renewable by 2020.

Facebook’s real sustainability risks lie on the governance side of things. For starters, Mark Zuckerberg is both CEO and chair of the board, two roles normally separated so that the board could fire the CEO if things go awry. That can’t happen at Facebook since Zuckerberg can simply fire any board members who mobilize against him. Like other big tech companies, Facebook has used the sneaky trick of issuing non-voting shares on the market, depriving investors of any say. If Zuckerberg wants to ‘Move Fast and Break Things’, there’s no way for anyone to stop him.

Besides the fresh US government lawsuit that charges FB with enabling housing discrimination,  Facebook is facing dozens of class action lawsuits for the Cambridge Analytica scandal that saw user data get illegally scrapped and sold for political gain. This massive breach of trust accounts for the red flag around digital privacy rights (see Scorecard below). Moreover, long-term investors are concerned that Elizabeth Warren has vowed to break up tech giants like Facebook. Her odds of becoming president are slim, but she’s sparked a much larger debate that could have huge negative impacts on Facebook’s share price if politicians start going after tech companies with more gusto.

So what’s a good alternative for investors who want to log out of Facebook permanently?

I’d much prefer to own shares of California-based Autodesk. This software maker has enabled everything from the 3D animation in The Lord of the Rings films to the modelling of the Shanghai Tower, one of the largest and most sustainable buildings on the planet. It’s also beat Facebook to the punch on the renewables front: all of Autodesk’s data centres and cloud services run on 100% renewable energy. Ditto for its real estate portfolio.

Autodesk’s stock has performed a little better than Facebook’s over the last five years, with both seeing tremendous growth without paying a dividend. Autodesk does have a higher beta suggesting it is more volatile, but you have to be ok with volatility if you’re investing in tech stocks. With a similar financial profile and a much better overall score, there’s no doubt that Autodesk wins this week’s Sustainability Stock Showdown.

Have a company in your portfolio that you want to replace with a more sustainable option? Write us an email or send us a tweet!  

Tim Nash blogs as The Sustainable Economist and is the founder of Good Investing. He teaches people how to invest online and make intentional decisions with their investments. Tweet him at @timenash.

The post Tim Nash’s sustainable stock showdown: Facebook vs. Autodesk appeared first on Corporate Knights.

MacLaren’s cloud-based digital asset management company, MediaValet, had grown and spread around the world. With customers in Europe, he knew he had to comply with the European Union’s General Data Protection Regulations (GDPR) – the new global gold standard when it comes to privacy – or face the prospect of hefty fines.

It was a challenging process that took six months. But MacLaren says being among the first North American companies to become GDPR compliant has made a big difference. “It has attracted new customers, increased customer retention and overall grown our business. It has increased market share because it helped us win deals from other existing digital asset management providers.”

In the wake of the Cambridge Analytica scandal and with the GDPR’s entry into force in May, privacy issues and ethical questions about what companies do with the data they collect have been in the spotlight.

In October, Apple CEO Tim Cook issued a call to action. He warned that privacy was a human right and the collection of huge amounts of personal information on individuals was hurting society.
“Our own information, from the everyday to the deeply personal, is being weaponized against us with military efficiency,” Cook told an international gathering of privacy commissioners.

Cook praised the GDPR and called on the United States to follow Europe’s lead.
While California has adopted a consumer privacy act that is scheduled to go into effect in 2020, privacy laws in the U.S. are often weak or nonexistent.

Canada has the Personal Information Protection and Electronic Documents Act (PIPEDA), which governs private businesses, and the Privacy Act, which spells out the rules for federal government departments, but neither has kept pace with changes in technology. With the GDPR now in effect, some experts are concerned Canada’s privacy laws will soon no longer be considered equivalent to those in the EU, which could complicate life for Canadian companies doing business with European companies or customers.

Described as the world’s strongest data protection rules, the GDPR sets out how the private information of European residents must be handled. It backs up those rules with the threat of stiff fines – up to €20 million or four per cent of a company’s worldwide annual revenue for the previous year, whichever is higher.

Fines can be imposed on any company around the world that breaks those rules – even if it has no offices in Europe.

European officials told Reuters in October that there has been a 53 per cent increase over the past year in privacy complaints under the GDPR in France and Italy alone. They expect data protection authorities to soon begin levying fines.

European data protection authorities can also use order-making powers to enforce the new privacy rules.

[pullquote]

“Our own information, from the everyday to the deeply personal, is being weaponized against us with military efficiency.”

-Tim Cook, CEO, Apple

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For example, the United Kingdom’s Information Commissioner, Canadian Elizabeth Denham, has issued an order directing a British Columbian company involved in the Cambridge Analytica scandal to destroy all the personal information it collected on British citizens once B.C.’s information commissioner’s office finishes its investigation into the scandal.

The GDPR’s new rules are wide ranging.
One of its key provisions – privacy by design – actually originated in Canada, the brainchild of former Ontario privacy commissioner Ann Cavoukian. With privacy by design, privacy considerations are baked into systems from the start, not added as an afterthought.

Companies that have a data breach must notify affected customers within 72 hours of becoming aware of the breach. Businesses must ask people, using clear language, for consent to use their information. Individuals can withdraw that consent, and request access to information a company has regarding them. They can take their data with them if they switch to another company.

Among the other provisions is the right to be forgotten, which allows an individual to ask for information about them to be erased.

Canadian Privacy Commissioner Daniel Therrien says the GDPR is inspiring privacy policy in other countries.

“Should we apply the GDPR exactly in Canada? Not necessarily. I don’t think so. We have a Canadian context. But there are many, many positive things in the GDPR.”

Scott Smith, senior director of intellectual property and innovation policy for the Canadian Chamber of Commerce, says many large Canadian companies that operate internationally have already moved to comply with the GDPR.

However, he said many smaller companies don’t yet realize that they may need to comply as well.
“You run an Airbnb. You have a European traveller who happens to be here. You keep their name, their address, their e-mail address and phone number – that’s all personal information of an EU citizen. Theoretically, you need to be GDPR compliant.”

The GDPR comes at a time when data and personal information have never been more valuable.

“I’d say it is paramount,” says Smith. “Data is the way we are going to create new products, solve problems. Having timely, accurate and extensive data allows companies to understand their market, understand their customers, understand what their customers want and deliver it in ways that are more efficient and effective and convenient and lowers prices.”

Elisa Henry, a partner with Borden, Ladner, Gervais, says that for many companies, data has become their main asset.

“If you don’t properly take care of your data and you don’t handle it properly, then you’re putting your main assets at risk.”

Being GDPR compliant is rapidly becoming an asset when it comes to sales and business deals, Henry adds.

“If you cannot say that these days and your business is relying heavily on processing personal information, then you’re out of the game very quickly.”

Chantal Bernier, who leads the privacy and cybersecurity practice at the law firm Dentons, says companies could also have difficulties exchanging data with European businesses if they aren’t GDPR compliant.

“In the GDPR there is a mandatory requirement for any organization to only transfer data or to only hire a vendor that is GDPR compliant. So in addition to the competitive advantage with branding, there is a legal requirement that is a huge differentiator when you can put forward right away that you are GDPR compliant.”

The cost of complying can vary widely, says Bernier. A small website selling products to Europe might be able to comply with the law for $50,000. A larger company that uses artificial intelligence, algorithms, a large amount of personal information, has European employees and sells services to Europe could end up spending hundreds of thousands of dollars to do everything necessary.

Cavoukian, who now leads the Privacy by Design Centre of Excellence at Ryerson University, says a lot of businesses have been coming to her for privacy by design certification that they can then tout to their customers.

Many of the provisions of the GDPR highlight ethical questions for businesses – even those who don’t do business in Europe.

Among them, says Henry, is the use of artificial intelligence and entirely automated decision-making or profiling that affects individuals – something restricted under the GDPR.

“There are a lot of questions that as citizens we should be asking and ethics has to be embedded in privacy. They go hand in hand. And the GDPR suddenly played a big role in raising awareness about that.”

In Europe, the new, tougher rules are being well received, she added. “People are more and more conscious and worried about surveillance, about monitoring of their behaviour, about automated decision-making.”

Another ethical issue for business is the temptation, once you have a database chock full of personal information, to use it in a variety of ways.

Cavoukian says it is important to make privacy the default setting and not to use information you gather for any purpose other than the purpose for which it was collected.

“The beauty of doing that is that it builds trusted business relationships, which are lacking. There’s a huge trust deficit,” she says.

“So, I actually believe it gives businesses a competitive advantage and allows them to retain the customers they have, gain their loyalty and it attracts new opportunity.”
MacLaren agrees.

He says the most challenging part of becoming GDPR compliant was reviewing all of the company’s licensing agreements with their lawyer. That review and making sure all aspects of MediaValet’s operations complied with the GDPR cost “north of six figures.”

But MacLaren is glad he did it.

“In the end, if it’s good for our customers and their users, it’s good for us and our businesses.”

Elizabeth Thompson is an award-winning journalist who has covered Canada’s Parliament since 2001.

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