The dark truth behind tech’s supposed sustainability

The new analysis "Benchmark ICT KnowTheChain 2025" reveals how behind the green image of the tech giants there are practices of labor exploitation and systematic violations

Smartphones, artificial intelligence, electric vehicles, and 5G: the tech sector is synonymous with progress and sustainable innovation. It’s no surprise that ESG (Environmental, Social, Governance) investors have filled their portfolios with tech stocks, drawn by low direct emissions and strong growth prospects. However, beneath the glossy surface lies a less uplifting reality.

What investors fail to see—or choose to ignore—is the other side of the coin: a global supply chain built on minerals from conflict zones and millions of workers exposed to high risks of exploitation and forced labor.

The latest KnowTheChain ICT Benchmark—an evaluation tool that analyzes and ranks companies in the information and communication technology (ICT) sector based on their human rights and labor practices within their supply chains—reveals a rise in forced labor complaints compared to the previous cycle. The analysis focused on the 45 largest global ICT companies, from Apple to Samsung, from Amazon to Sony.

The research shows that companies have made improvements in policies and governance, but most still fail in the most important aspect: ensuring workers in the supply chain can organize, access effective grievance mechanisms, and achieve fair working conditions.

A concerning statistic is that despite double-digit profit margins that could easily absorb the costs of due diligence, only one company involved a union in its supply chain, and just one in six shared data on how their purchasing practices impact workers. This is despite evidence linking unfair pricing structures to the risk of forced labor.

Among other findings, four stand out as particularly troubling:

• On average, ICT companies scored 20/100 in efforts to address forced labor within their supply chains.

• Three companies scored above 50: Cisco (51/100), Hewlett Packard Enterprise (53/100), and Samsung (61/100).

• Purchasing practices and worker rights protection were the lowest-scoring areas in the 2025 benchmark, with average scores of just 5/100.

• All companies scored zero on their responses to forced labor allegations.

Regions most at risk

Major ICT production hubs conceal systemic human rights violations. Taiwan, which produces 90% of the world’s advanced chips, is the scene of well-documented abuse against migrant workers: exorbitant recruitment fees, contract deception, and movement restrictions.

In Malaysia, electronics factories continue to exploit migrant workers, while Chinese supply chains are often linked to forced labor allegations, including those employing Uighur workers.

“These repeated reports highlight ongoing deficiencies in corporate oversight and pose significant legal and reputational risks for investors,” explained Áine Clarke, Head of KnowTheChain and Investor Strategy at the Business & Human Rights Resource Centre.

With tightening international regulations, including the import ban on goods made with forced labor and the EU’s corporate sustainability due diligence directive, non-compliant companies face fines, production bans, and trade restrictions—all of which translate into real risks for investors.

Profits and human rights: a possible combination

Samsung Electronics‘ case, a top performer in the ICT benchmark, shows that stronger human rights policies and profitability can go hand in hand. Other companies, such as Foxconn, SK Hynix, LG Electronics, and Taiwan Semiconductor Manufacturing Company, are strengthening supply chain governance.

“When workers feel safe, with mechanisms to express concerns, negotiate conditions, and seek remedy, they are more engaged and productive,” said Clarke, citing worker rights agreements in Bangladesh and India that demonstrate the business advantages of increased protection.

Conversely, weak supply chain governance leaves companies vulnerable to lawsuits, reputational damage, and operational disruptions.

The call to action for investors

As fiduciaries, investors must use their influence to demand improvements in companies’ human rights due diligence. Clarke suggests the following actions:

• Engage directly with portfolio companies to ensure stronger risk oversight.

• Integrate human rights into financial models, applying discounted prices for underperformers.

• Publicly support mandatory human rights due diligence regulations.

“Investors, especially those with responsible investment mandates, must hold companies accountable,” Clarke concluded. “Supply chains must be ethical, sustainable, and compliant with the law, or investors risk failing to meet their commitments to beneficiaries and international standards.”

While industries like apparel and mining have faced significant scrutiny for human rights violations within their supply chains, ICT companies have largely escaped similar accountability. It’s time for investors to take control before it’s too late.