Does Apple qualify as an impact stock?
By now, you’ve probably seen Apple’s ‘Mother Nature’ advert. It went viral on LinkedIn last week.
If you haven’t watched it, let us summarise.
Apple employees (and CEO Tim Cook) are flustered as ‘Mother Nature’, played by Octavia Spencer, arrives at Apple HQ to check on sustainability progress. Among other sustainability 'wins', Mother Nature is told that more Apple products are being shipped by sea rather than air, reducing transport emissions by 95%. Sounds great, but would Apple make it into an impact fund? The short answer is no.
What's intriguing about Apple's narrative is its focus on mitigating the negative environmental consequences of its operations, with no mention of its social impacts. This is a striking omission, considering the company's recent involvement in various social controversies in the last five years.1
Purely mitigating negative impacts is insufficient to be considered an impact stock; companies must also have positive impacts. So, what are Apple's positive impacts?
Apple supports diverse entrepreneurs through a special programme. They ensure their products are adapted and accessible for people with various disabilities. A supplier fund has been created to support vulnerable populations in their supply chain, supporting education and entrepreneurship.
However, of these impacts, just the first one can be validated as reaching financial materiality, and even then, it only covers 2.8% of Apple’s financial activities.
Apple falls down in areas like product affordability —the premium pricing of their products limits the accessibility for lower-income individuals, potentially exacerbating digital inequality. The rapid release of Apple products has contributed to electronic waste and resource depletion. Then, of course, there was the routing of billions of dollars of taxes through the island of Jersey.6 Impact funds emphasise corporate tax responsibility as part of their investment criteria.
So, in short — as it stands, Apple wouldn’t make it into one of the C5K impact ETFs. But it’s never too late to become an impact business, so maybe we’ll see you next year, Apple.
Commentary written by Charlie Macpherson - Managing Director of ETFs at CIRCA5000