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Facebook gets a C – Startup rates the ‘ethics’ of social media platforms, targets asset managers – TechCrunch

2 Mins read

By now, you’ve probably heard of ESG (Environmental, Social, Governance) ratings for companies or ratings for their carbon footprint. Well, now a UK company has come up with a way of rating the ‘ethics’ social media companies.

EthicsGrade is an ESG rating agency focusing on AI governance. Headed up Charles Radclyffe, the former head of AI at Fidelity, it uses AI-driven models to create a complete picture of the ESG of organizations, harnessing Natural Language Processing to automate the analysis of enormous data sets. This includes tracking controversial topics and public statements.

Frustrated with the green-washing of some ‘environmental’ stocks, Radclyffe realized that the AI governance of social media companies was not being adequately considered, despite presenting an enormous risk to investors in the wake of such scandals as the manipulation of Facebook by companies such as Cambridge Analytica during the US Election and the UK’s Brexit referendum.

EthicsGrade Industry Summary Scorecard – Social Media. The idea is that companies use these ratings to see better where they should improve. But the twist is that asset managers can also see where the risks of AI might lie.

Speaking to TechCrunch, he said: “While at Fidelity, I got a reputation within the firm for being the go-to person, for my colleagues in the investment team, who wanted to understand the risks within the technology firms that we were investing in. After being asked several times about some dodgy facial recognition company or a social media platform, I realized there was a massive absence of data around this stuff as opposed to anecdotal evidence.”

He says that when he left Fidelity, he decided EthicsGrade would cover not just ESGs but also AI ethics for platforms driven by algorithms. He told me: “We’ve built a model to analyze technology governance. We’ve covered 20 industries. So most of what we’ve published so far has been non-tech companies because these are inherent risks in many other industries, other than simply social media or big tech. But over the next couple of weeks, we’re going live with our data on things which are directly related to tech, starting with social media.”

Essentially, what they are doing is a significant parallel with what is done in the ESG space. “The question we want to be able to answer is how does Tik Tok compare against Twitter or Wechat as against WhatsApp. And what we’ve essentially found is that things like GDPR have done a lot of good in terms of raising the bar on questions like data privacy and data governance. But in a lot of the other areas that we cover, such as ethical risk or a firm’s approach to public policy, are indeed technical questions about risk management,” says Radclyffe.

But, of course, they are effectively rating algorithms. Are the ratings they are giving the social platforms themselves derived from algorithms? EthicsGrade says they are training their own AI through NLP to automate what is currently very human analysts centric, just as ‘Sustainalytics et al. did years ago in the environmental arena.

So how are they coming up with these ratings? EthicsGrade says are evaluating “the extent to which organizations implement transparent and democratic values, ensure informed consent and risk management protocols, and establish a positive environment for error and improvement.” And this is all achieved, they say, through publicly available data – policy, website, lobbying, etc. In simple terms, they rate the governance of the AI, not necessarily the algorithms themselves but what checks and balances are in place to ensure that the outcomes and inputs are ethical and managed.

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About author
Tristan McCue is a 26-year-old junior programmer who enjoys reading, binge-watching boxed sets, and appearing in the background on TV. He is smart and friendly, but can also be very evil and a bit lazy.He is an Australian Christian. He has a post-graduate degree in computing.
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