Executive Summary
As tech addiction continues to gain precedence, its implications to both investors and society at large require greater understanding. This report offers an in-depth analysis of the material impacts of tech addiction within six sectors and details key areas for investor engagement
As digital technologies become ubiquitous in business and consumer life, concerns are rising that the overuse of online services such as gaming, online gambling and social media can cause a range of harms, from anxiety and depression to political polarization. In this context, investors must deepen their understanding of tech addiction and its impacts, to ward off rising social risk in the tech sector.
The taxonomy of addiction
In an effort to increase our understanding of the complex issues at hand, the report seeks to clarify ongoing uncertainty around terminologies, categorizations and measurements relating to tech addiction, as well as particular difficulties in proving causality and identifying the point at which tech use becomes harmful.
Material risks across key sectors
To carve out a more nuanced understanding of the trends and implications underpinning tech addiction in multiple contexts, the report deep dives into the following six sectors:
- Online gambling
- Online gaming
- Social media and advertising
- Online pornography
- Online trading
- Gamification and the Metaverse
The findings
The findings highlight key harms that arise from tech addiction and overuse on an individual, societal and economic level, including:
- Psychological and emotional harms
- Cognitive impairments
- Physical harms
- Financial harms
- Impact on business productivity
- Impacts on democracy.
Such risks are particularly relevant to more vulnerable groups including children and adolescents, as well as the 10-15% of the adult population that are unable to self-regulate.
Each deep-dive details industry-specific harms arising from tech addiction, emerging reputational, legal and regulatory risks surrounding the social impact of online services, and potential areas for investor engagement. In particular, the findings point out the exploitation of psychology and behavioral science within such industries and the gamification of a broad range of sectors.
The report also highlights the blend of responsibility among stakeholders including regulators, companies, consumers, civil society and investors, and the collaboration required to create accountability mechanisms for industry players to limit the impacts and risks of tech addiction.
Conclusion
Though still under-researched, the diverse and widespread harms associated with modern day technology use are increasingly emerging as risks to tech companies. With many ESG funds heavily exposed to the sector, responsible investors need to be prepared to engage on tech addiction in the coming years as the issue rapidly rises on public and regulatory agendas.
TABLE OF CONTENTS
- Executive Summary
- Table of Contents
- Introduction
- The Taxonomy of Addiction
- Overview of Harms
- Visual Scale of Harms
- Materiality to investors by sector
- Online gambling
- Gaming
- Social Media & Advertising
- Online Pornography
- Online Trading
- Other Sectors
- Tools & Responsibility
- Conclusion