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Case study

Case study: Apple Inc.

EOS Insight
8 September 2025 |

How we engaged with a one of the world’s largest technology companies.

Background

Apple Inc. is one of the world’s largest technology companies, with a current market cap above $2 trillion, and is a global leader in technology innovation, renowned for its cutting-edge hardware and software products, seamless ecosystem and commitment to design excellence, privacy and user experience.

We encouraged the company to address potential civil rights impacts from the use of machine learning algorithms embedded in its products and services,

Our engagement

In order to enhance the board’s effectiveness in overseeing human capital management in the interests of long-term value creation, we requested that the company conduct a third-party assessment covering business risks such as avoiding liabilities associated with discrimination and ensuring fair treatment of its workforce, customers and communities (Q1 2022). In the United States this is often referred to as a “civil rights audit”. We recommended support for a 2022 shareholder proposal for such a report that passed with 54% support. We asked that the report include, at minimum, civil rights liabilities in the workforce such as business practices which minimize the risks and expenses of discrimination in the workplace, including sharing what it would do differently in light of sexual harassment complaints. We also encouraged the company to address potential civil rights impacts from the use of machine learning algorithms embedded in its products and services, consistent with the EOS Digital Rights Principles.

In 2022, at the company’s request, we also provided feedback on its ESG Report. We pointed to opportunities to improve human capital management oversight and disclosure, including how the company could benefit from describing areas of difficulty where it had not met its own values and aspirations, particularly around the potential liabilities and impact on employee productivity associated with ongoing allegations of sexual harassment.

Prior to its publication in 2023, the company assured us that it was addressing the audit thoughtfully and recognized it would become an example that would influence other companies. We note the significant contribution of the company’s talented, experienced, and highly skilled employees to its financial success. We reiterated in 2024 that its civil rights practices should include an increased focus on the rights of children and how best to protect them, pointing to potentially material legal and regulatory risks.

In Q3 2024 and Q1 2025, we reiterated to the company that the audit provided opportunities to deepen the integration of inclusion practices into the organization. For example, we continued to probe how Apple plans to implement audit recommendations that intersect with the EOS Digital Rights Principles, such as further coordination of the company’s existing efforts to consider civil rights risk related to its core business operations, including in product design and development. We also continued to encourage the company to prioritise the rights and safety of children and other vulnerable persons.

Changes at the company

Apple completed a third-party civil rights audit in 2023. The published report addressed products and services, workforce, customers and communities and laid out 40 recommendations. 

These included suggestions to consider enhancing the company’s staff “AfterCare” program to include monitoring the aggregated retention, promotion progression, and attrition rates of employees who make complaints of workplace misconduct.  The recommendations also suggested the company analyze customer feedback about potentially inappropriate or discriminatory employee conduct, such as sexual harassment, received through its staff survey, executive escalations, or other channels to identify potential trends regarding the incidence of misconduct. 

We believe the audit provided the board with additional information that may help enhance oversight of corporate culture and management of company business risks, such as workplace behaviours and algorithmic bias, to the benefit of long-term shareholder value. 

Further, the 2023 proxy clarified that the compensation committee had in practice been responsible for overseeing human capital and the 2024 proxy subsequently referred to it as the compensation and people committee, more clearly indicating board oversight of human capital issues.     

Next steps

Implementing the actions of the third-party civil rights audit should contribute towards the company taking effective strategic actions to promote sound human capital management practices, impacting a workforce of 164,000 employees. These operational changes could help enhance talent management with a view to advancing productivity and innovation, while reducing business risk to the benefit of company performance. This should also improve the relevance and accessibility of its products to the benefit of Apple’s global customers and communities, in line with long-term shareholder value.

We plan to explore how Apple is preparing to implement the audit’s workforce recommendations. We will generally encourage the company to incorporate actions that could help further expand workforce capacity for innovation, improve employee retention to reduce turnover costs, and boost productivity, thereby improving long-term business outcomes.

Check

This case study has been shared with Apple Inc. to enable it to provide input to help ensure it provides a fair representation of EOS at Federated Hermes Limited’s (EOS) engagement and resulting changes made at the company.

Case studies are shown to demonstrate engagement; EOS does not make any investment recommendations and the information is not an offer to buy or sell securities.

Engagement objectives

Sustainable Development Goals

8811

Top success

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