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Facebook’s ‘lack of accountability’ in its data scandal spurs European sustainability fund to dump shares

Key Points
  • Nordea's head of group sustainable finance Sasja Beslik said the company's sustainability funds will not invest in Facebook shares anymore.
  • The executive cited the social media company's "lack of accountability over data security/data sharing infrastructure of the platform, lack of transparency and a reactive behavior combined with increased scrutiny from regulators and stakeholders" as reasons for the decision.
Facebook CEO Mark Zuckerberg is seen through reflective glass as he sits in the office of Senator Bill Nelson (D-FL) while he waits for a meeting in the Hart Senate Office Building in Washington, U.S., April 9, 2018.
Leah Millis | Reuters

The sustainability practice of a large European asset management firm is banning investments in Facebook shares.

Nordea's head of group sustainable finance, Sasja Beslik, explained the decision on social media Thursday.

"Nordea has decided to exclude Facebook from the Nordea Stars Funds' investments," he said in a tweet.

The company's Stars Funds invest in companies with "top-of-class environmental, social responsibility and governance profiles."

Beslik said the move came after Nordea conducted an investigation into the Cambridge Analytica data scandal and Facebook's responses to it.

Facebook shares declined by more than 10 percent in March after media coverage that data from tens of millions of Facebook profiles were improperly accessed by research firm Cambridge Analytica before the 2016 election. The data mishandling spurred international probes, an internal audit and an overhaul of Facebook's privacy policies. The company has admitted it didn't do enough to protect users' privacy and vowed to improve.

Facebook's stock has since recovered all of those losses.

"The investigations have revealed a lack of accountability over data security/data sharing infrastructure of the platform, lack of transparency and a reactive behavior combined with increased scrutiny from regulators and stakeholders," Beslik said.

In March, Nordea announced it put a "temporary hold" on new investments in Facebook for three months in its Stars Funds. At the time Facebook represented a 1.98 percent position in the company's Nordea Global Stars fund. In a tweet Thursday, Beslik said it had divested of its Facebook shares.

Nordea had 330 billion euros ($382 billion) of assets under management at year-end 2017, according to its website.

Facebook did not immediately respond to a request for comment.