8 MIN REPORT
Access to high-speed internet is crucial to social and economic health
One's ability to work, study and access health care can be affected by the speed and affordability of broadband service. In fact, the United Nations has declared internet access to be a fundamental human right.
The COVID-19 pandemic brought the digital divide into even sharper focus, as many aspects of everyday life went online. This transition emphasized the degree of economic inequity for those without internet access: lower workforce productivity, lower educational attainment, higher health care costs and less access to finance management.
Our proprietary ESG investment framework for broadband providers identifies internet access and affordability as a material issue and supports analysts in considering how companies approach society's digital divide. Our ESG research highlights that companies can support equitable economic development, especially in rural areas, while earning a compelling return. Often, this involves ongoing conversations with company management about the realistic opportunity to connect new homes, confront major hurdles and promote policies.
In this report, Matt Lanstone, Capital Group's head of ESG research and investing, and Emma Doner, ESG senior manager, discuss the many factors affecting the industry, describe how our investment professionals analyze individual companies, and explain why internet access is such an important ESG issue.