New Deloitte report explains how tech companies have to change to be more ethical

A new report from Deloitte highlights the choice many tech companies are facing when it comes to business ethics. Is it possible to hold onto business as usual, or is it time to make ethics at least as important as profits?

The report released on Wednesday, “Beyond good intentions: Navigating the ethical dilemmas facing the technology industry” spells out the contradictory forces at work.

In a survey of tech professionals, 82% strongly agreed that their company was ethical. In the same survey, only 24% strongly agreed that the tech industry takes an ethical approach to the products and services that it creates.

Another Deloitte survey of Millennials and Gen Z found that 70% of both groups think corporations focus more on their own agenda than the impact on society.  

According to the report, tech companies will have to make these changes to improve their ethical standings:

• Changing long-established mindsets that have been historically beneficial
• Discussing the trade-offs between efficiency and performance and a more ethical approach
• Balancing existing revenue streams with strong ethical practices
• Changing the software engineering process
• Investing more money and time in product development to understand unintended consequences
• Identifying new ways to evaluate and reward project teams 

This list perfectly illustrates the numerous dilemmas that tech companies are dealing with as whistleblowers share internal research and lawmakers start to understand the force and impact of social media platforms. 

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Paul Silverglate, vice chair and U.S. technology sector leader at Deloitte, wrote the report along with Jessica Kosmowski, Hilary Horn and David Jarvis. 

He said that being both ethical and profitable is possible as long as companies are willing to ask not only “Can we?” but “Should we?” He used the example of a product that could be very profitable, but also may have negative impacts to a group of people. 

“Fixing the product would take time and money,” he said. “Having discussions as early as possible in the product development life cycle and clearly communicating your organization’s ethical principles to everyone can help.”

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Silverglate suggests that the first step in reducing the tension between business as usual and a stronger set of ethics is to identify an “ethical due north.” The next step is to manage for both the short- and long-term and consider the potential trade-offs between the two. 

Deloitte identified these five areas where tech companies need to do a better job balancing ethics and existing business practices: 

1. Data usage: Do the minimum amount required to comply with data-related regulations, or collect, use and protect data in a more equitable way for everyone?  
2. Environmental sustainability: Meet environmental laws or find new ways to address energy use, supply chain efficiency, manufacturing waste and water use in semiconductor fabrication?  
3. Trustworthy AI: Develop guiding principles that benefit society and avoid issues with bias, fairness, transparency and explainability or prioritize launching products as quickly as possible?
4. Threats to truth: Address deepfakes, disinformation and misinformation that are rampant and work with governments to clearly outline the responsibilities and standards required for effective regulation?  
5. Physical and mental health: How can the tech industry better understand and measure the impacts of technology to health, as well as the impact on the healthcare industry? 

Silverglate said that the industry is waiting for universal data privacy standards to emerge. He sees greater market demand for privacy protections as shown by the significant growth of the privacy tech industry. He recommends that companies take these steps to prepare for data-related regulations that are in the works.

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“This includes developing a data governance framework, a way to ensure compliance with current global regulations, strong data protection and cybersecurity practices and an overall robust risk management capability,” he said. 

Discuss ethics from the start 

The report identifies ethical problems that could crop up at each stage of the business life cycle and recommends questions to ask at each phase. This includes defining a company’s responsibilities to society at the start of the life cycle, measuring the ethics of the supply chain during development and deployment and thinking about what happens to end-of-life products. 

Silverglate said some of these ethical questions are more intellectually challenging and some may be more technically or operationally difficult. 

“It is much easier to talk and craft strategies than it is to redesign software or revamp supply chains,” he said. “That is why a holistic approach is so important – we want to help enable the industry to more easily make ethical decisions through a more structured approach.”

The report recommends taking these steps to develop a holistic approach to ethics in the tech industry:

1. Integrate ethics across the business life cycle
2. Invest in specialized ethics talent
3. Build and train from the top, the bottom and across
4. Be as predictive and extensive as possible
5. Collaborate with partners and competitors to improve the industry

Medtronic recently outlined its environmental, social and governance goals for the coming year in an effort to address some of the ethical dilemmas the Deloitte report outlines. Silverglate said ESG reporting can help expose issues and facilitate collaboration and debate. However, reporting is only one component. 

“Hopefully, it can spur companies to build out their measurement capabilities, determine clear lines of responsibility and drive behavioral changes,” he said. “I think that it is also important to note, with ESG reporting, it is not just about the ‘letter of the law,’ but the ‘spirit of the law as well.

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