Social media has revolutionised business, information sharing, and personal connections, becoming a major 21st-century innovation.
Despite its benefits, there is increasing evidence that social media poses risks to young people, leading to actions like Australia's Online Safety Amendment Bill and school mobile phone bans to reduce harmful content exposure.
Organisations serving children may want to consider their approach to social media platforms and how this is reflected in their investment policy.
The evolution of social media has been transformative. It began with basic online communication and has grown into complex platforms and multifaceted networks that integrate social interaction, multimedia sharing, and real-time global connectivity for many. It stands as one of the greatest and most impactful innovations of the 21st century, revolutionizing business, information sharing, and personal connections—elements that many now take for granted.
These networks have facilitated easier business connections, allowed family members to stay in touch with a click of a button regardless of distance, and increased productivity through the vast database of free knowledge available online. However, this exponentially growing phenomenon has its downsides. On November 28, 2024, Australia passed the Online Safety Amendment Bill, which will ban users under the age of 16 from social media. The legislation has yet to specify which platforms will be affected, but its intent is to reduce exposure to harmful information and media, which is more frequent as the use of social media platforms and content creation become simpler and mainstream. In Scotland, two schools have been the first in the UK to adopt mandatory locked faraday pouches, to prevent students using their phones throughout the day, citing, “social media on mobile phones had an adverse effect on learning ability”.1
In a broader UK sense, some schools have implemented total bans on mobile phones, threatening confiscation and consequence for non-compliance. The early stages of social media gave rise to a new form of bullying—cyberbullying—which manifests in various ways. It is difficult to go online without encountering negative comments, threats, and in some extreme cases, violent content that harms young people daily and risks desensitizing them to harmful and violent imagery. The allure of social media often lies in the hope of boosting self-esteem and feeling a sense of belonging through likes, compliments, and shares. Teenagers frequently post their activities and social interactions, leading to feelings of fear of missing out, jealousy, anxiety, and depression among viewers—all without a spoken word. Numerous factors link social media use to decreased sleep, depression, poor academic performance, and deteriorating health. While social media can offer an escape from reality, it also risks creating false realities, with individuals desperate for recognition and appreciation.
This is an issue which extends beyond schools, and it may be that other organisations with young people as beneficiaries need to consider their approach to social media platforms.
Investment portfolios are subject to increasing scrutiny from stakeholders and whilst the exclusion vs engagement debate continues, it is important that organisations review their investment policy on a regular basis to ensure it reflects the organisations approach. Exclusions and restrictions in investment portfolios are not new and for many, have evolved from the traditional ‘sin sectors’ to encompass wider restrictions to reflect the organisations beneficiaries or purpose. For some, engagement is preferred over exclusions. At LGT we work with your organisation to establish the approach which works for your organisation. Trustees must take decisions with the best interest of the organisation and its beneficiaries in mind, so for those organisations with a focus on children, it may be time to explicitly consider the approach to social media companies. Where a line is drawn is challenging, as the Australian legislation has found, but trustees can work with their investment manager to ensure that any decision taken is reflected in the investment portfolio. The investment policy statement should be a governance-led document reflecting the organisation, the implementation of it is the task of the investment manager. While altering your investment policy may not change the world, it could help safeguard your reputation. For many charities and organizations, where children are the primary beneficiaries, it may be time to consider how to reflect concerns about social media in you investment portfolios. At LGT, we’ve been considering for some time how to do this, so do get in touch directly for more information.
[1] https://www.bbc.com/news/articles/czrvr7yl57yo
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