How thoroughly do investment managers screen the companies in their environmental, social and governance funds? Not very, if the example of videogame company Activision Blizzard is typical.
Activision—maker of “Call of Duty,” “World of Warcraft” and “Candy Crush Saga”—has drawn numerous complaints from employees and regulators of sexual misconduct, retaliation and discrimination, yet it’s included in many prominent ESG funds. In July the company was sued by the California Department of Fair Employment and Housing. Among other things, the state alleged “women were subjected to constant sexual harassment, including groping, comments, and advances,” and “the company’s executives and human resources personnel knew of the harassment and failed to take reasonable steps to prevent the unlawful conduct, and instead retaliated against women who complained.” One employee committed suicide after male co-workers allegedly passed around a picture of her genitals at a holiday party. Activision says the lawsuit is “meritless and irresponsible.”