New Technology Deployment and Corporate Responsibilities in the Metaverse Title

1. Introduction

The metaverse as a concept is not new, having been introduced in the sci-fi novel Snow Crash (Stephenson, 1992) over 30 years ago. Today, the metaverse is widely discussed and is generally seen to be the next “big thing” in the application of technology in business and society. While the benefits claimed for the metaverse span many areas of activity, the continuing evolution of the metaverse has a potentially wide range of implications for industry in areas currently related to corporate social responsibility (CSR), or more precisely, corporate digital responsibility (CDR). The parameters of CDR include trust, privacy, security, information transparency, customer engagement, employee upskilling, culture change, environmental impact and ethics (Wynn & Jones, 2023). The advent of the metaverse will increase focus on these responsibilities and the possible need for regulation.

In this context, Madiega et al. (2022: 1 and 2), writing under the banner of the European Parliamentary Research Service, argued that “it is essential to consider how to attribute responsibility” for such impacts, and that “the multitude of entities present in the metaverse will create a web of relationships making it very difficult to determine responsibilities and liabilities.” Governments are increasingly coming under pressure to regulate the metaverse, and KPMG (2023) argued that governments have a unique opportunity to play a more proactive role in the regulation of the metaverse. At the same time, the corporate sector will also need to recognise its metaverse responsibilities and their strategic implications. Anshari et al. (2022: webpage) argued that as businesses increasingly use the metaverse to expand their service networks, so they “may need to carefully assess the ethical implications of their data collection and utilisation procedures.”

Although the metaverse is beginning to attract attention in the academic literature (Charamba, 2022; Mogaji et al., 2023), there has been little consideration to date on how companies could and should approach their responsibilities regarding the development and use of the metaverse. This paper focuses on this gap in the literature and addresses two research questions (RQs), in the context of the metaverse in business and industry. First, what are the main risks and responsibilities associated with the metaverse? Second, how will the metaverse be regulated and how will companies report on their metaverse responsibilities to their stakeholders.

Following this introduction, the paper includes a section on the research method, and a section that reviews some of the relevant literature. The results section then reports on the findings from two case studies (in sub-section 4.1) and then addresses the two RQs noted above (in sub-section 4.2). The concluding section summarises the contribution of the article and outlines possible areas for future research.

2. Research Method

The research method is interpretivist and inductive, and consisted of two main elements: a scoping literature review, and two case studies drawn from secondary sources. For the literature review, recently published academic literature and information obtained from various web sources was reviewed to provide the material presented in the following section. This scoping review supported the development of the two research questions to be addressed using evidence from the case studies. Scoping reviews “are best employed when there is limited literature to inform the research question of interest” (Hanneke et al., 2017: 5), and can help to lay the foundations for subsequent research endeavours. The paper then examines how two major companies - Accenture and A3Logistics - are approaching their responsibilities related to the metaverse. The case studies draw heavily on reports published in 2023 by Accenture, an international professional services company specialising in information technology services and consulting, and based in Dublin, and A3Logics, a global information technology services, consulting and business solutions company, based in California. Both the Accenture (2023) report “Building a Responsible Metaverse”, and the A3Logics (2023) report “Why companies Need to be Socially Responsible in Metaverse Development” look to focus on the ethical, environmental and social issues involved in building and developing metaverse technologies. As such, this paper might best be seen as an opportunistic endeavour designed to shed some preliminary light on an issue that has received very little attention in the academic literature.

While these case studies do not offer a complete picture of how the two companies are approaching the metaverse, the authors believe they provide some valuable insights into how such international companies will have to transition their CDR strategies and operations in response to the changes introduced by the metaverse. The authors looked to capture the companies’ approach to the metaverse in their own words, in the belief that such quotations help to convey corporate authenticity. Document analysis was thus the main technique used in the case studies. Bowen (2009: 27) defined this as a “procedure for reviewing or evaluating documents – both printed and electronic (computer-based and Internet-transmitted) material”, noting that “like other analytical methods in qualitative research, document analysis requires that data be examined and interpreted in order to elicit meaning, gain understanding, and develop empirical knowledge”. This helped the authors identify emergent themes and address the research questions, this being an iterative, cyclical process involving working and re-working of common themes and related issues.

3. Relevant Literature

3.1. Concept and Definition

There is little by way of a consensus on how the metaverse should be defined, which is partly due to the continuing evolution of its constituent technologies, but a small sample of working definitions of the metaverse is provided here, and some of its perceived characteristics are discussed. Conceptualising the metaverse and how it will work in practice is challenging. Tucci (2022: paras 1-2) offers the following vision of the future:

“Imagine a virtual world where billions of people live, work, shop, learn and interact with each other -- all from the comfort of their couches in the physical world. In this world, the computer screens we use today to connect to a worldwide web of information have become portals to a 3D virtual realm that's palpable -- like real life, only bigger and better. Digital facsimiles of ourselves, or avatars, move freely from one experience to another, taking our identities and our money with us”.

This, however, remains just a vision, and it remains unclear as to how it will develop in practice. McKinsey (2022: para. 4) see the metaverse as “best characterized as an evolution of today’s internet—it is something we are immersed in instead of something we look at. It may realize the promise of vast digital worlds to parallel our physical one”, but Deloitte (2022: 6) set out three possibilities regarding how the metaverse may develop by the early 2030s. The more conservative (basic) assessment is that the metaverse “excels for the things it's good at, but never becomes a general-purpose platform”, and remains “a speciality market for specific uses that will complement but not replace other technologies”. A more sophisticated (intermediate) possibility would see multiple metaverses in which there are “a handful of major players vying for share of a dynamic marketplace”, and “a mainstream market for many applications but split among the next generation of tech leaders”. Finally, the most advanced (dominant) perspective envisions “an open, interoperable metaverse”, which becomes “the dominant interface through which we conduct most of our daily activities”, and entails “the full migration of today’s internet and more into an immersive world in which most businesses and consumers operate”.

It is thus not surprising that definitions of the metaverse differ or are couched in rather vague terms. Mystakidis (2022: 486) offers a brief definition, namely “the metaverse is a post-reality universe, a perpetual and persistent multiuser environment merging physical reality with digital virtuality”, whilst for PWC (2023: webpage) “the metaverse promises a stunningly realistic 3D digital world where you can do almost anything that you can in the real world — and more besides……. one day the metaverse won’t run on platforms whose owners control data, governance and transactions. Instead, customers (and businesses) will be able to take their identities, currencies, experiences and assets anywhere they wish.”

3.2. The Metaverse Technologies and Business Applications

Mager and Matheson (2023: para. 3) see the metaverse as “a confluence of technologies that allow new forms of experience and engagement across industries through 3D activity and the use of simulations based on artificial intelligence”. Underpinning the metaverse are a range of technologies - a “technology stack” - that is generally viewed as facilitating the metaverse (Figure 1). The metaverse space is made possible by the new, decentralized iteration of the internet called Web3, which provides access to a range of digital technologies that support the metaverse (Shein, 2022) - blockchain, the internet of things, spatial and edge computing; artificial intelligence, 3-D modelling software, extended reality and brain-computer interfaces (BCIs) (Table 1). However, as Pratt and Daniel (2022: para. 18) point out “the technology is simply not ready to support a fully immersive and shared metaverse - interoperability, computing power, software protocols, networking capacity and the degree of sophistication don't exist to create a true metaverse today -- and it may never get there”. McKinsey (2022: para. 8), however, are more optimistic, noting “constant improvements in computing power allow larger virtual worlds to exist. Cloud and edge computing let intensive large-data processes, such as graphics rendering, move off local devices. The rapid adoption of 5G is enabling mobile devices to access these large worlds more easily and with lower latency. And the cost of production for augmented- and virtual-reality hardware is declining”.

In outlining the commercial capabilities of the metaverse, Accenture (2023) emphasised the future role and importance of the metaverse in imagining, designing and delivering innovative extended reality experiences, in using blockchain to drive resilience across supply chains, to facilitate trust, verify digital identity and to build new revenue models, in digital engineering and manufacturing, and in technology innovation. More specifically, Pratt (2022) identified a number of possible areas of application in the metaverse, including business operations, education and training, customer experience, work meetings and marketing (Figure 1).

3.3. Risks, Responsibilities and Regulation

Nichols (2022: para. 1) notes that “when companies and users decide to adapt the technologies of the coming metaverse, they will also expose themselves to a new class of security risks and vulnerabilities”. Research into who is to take responsibility for the metaverse is still in its infancy, and is emerging from a variety of disciplines, including information science, law, and systems engineering. Rosenberg (2022) suggested that as major corporations have begun investing billions to deploy immersive worlds, proposals for its regulation will soon be required. More specifically, he claimed that the fundamental risks were the monitoring, manipulation and the monetisation of users. Pratt and Daniel (2022: para. 32) take a broader perspective on the risks involved in the metaverse, and provide “just a short list” including “environmental concerns; cybersecurity issues; legal issues; sexual harassment and other forms of harassment; privacy issues; scams; misinformation; and effects on mental health, including lowered self-esteem and increased feelings of isolation”.

Charamba (2022: 110) argued that “the dawn of metaverses” could mean that “BigTech control over our digital lives could be all consuming”, and we be could be “ensconced in digital, state-like walled gardens that are controlled by a handful of companies wielding sovereign-like authority.” This leads Charamba (2022) to question how we can understand corporate responsibility in relation to human rights in a digital environment, and he discusses the United Nations Guiding Principles for Business and Human Rights, and proposes a corporate responsibility to respect and protect digital human rights. In exploring the sustainability of the metaverse, De Giovanni (2023) further suggested that companies should not focus exclusively on the metaverse merely as boosters to enhance economic performance, rather they should carefully evaluate its role in terms of its environmental effects and social goals. In illustrating his argument that taking a responsible digitalisation approach seems to be quite urgent, De Giovanni (2023) asserts that environmentally, the metaverse will entail an interesting trade off, because it demands a high level of energy consumption. At the same time, while the metaverse favours social interactions within the digital world, an attendant decline in social interactions in the real world may have psychological implications.

Schobel and Leimeinster (2023) claimed that the creation of metaverse ecosystems and integrated platforms results in different responsibilities for complementors/service providers, consumers, platform owners, and orchestrators, who handle the transfer of one platform into other ecosystems. However, in mapping out the complex dynamic nature of the metaverse, Schobel and Leimeinster (2023) argued not only that the responsibilities of these four groups will be continually changing, but also that it is important to rethink governance structures. Here a distinction is made between governance by the metaverse and governance of the metaverse, with the former involving rules to guide the behavior of all stakeholders, while the latter involves things that cannot be programmed, such as in the real world, where rules can be broken.

In addressing the social and ethical challenges of the metaverse, Benjamins et al. (2023) suggested that the potential negative consequences of the massive use of technology demanded attention. Here, the metaverse was seen not only to face a range of technical, legal, business, economic, security, and user experience challenges, but also to face risks stemming from deliberately malicious, usually forbidden, actions, and from the unintended consequences of supposedly innocent actions. The authors look to learn from the experiences of artificial intelligence in identifying direct and indirect challenges. Direct challenges of the metaverse are those that companies can handle by themselves, and those that require government involvement, while indirect challenges refer to problems that begin to surface after some time, and were mainly unseen at the time of market launch. Benjamins et al. (2023), also suggested that the metaverse could exacerbate existing mental health and liberty challenges, as well as “dual world” challenges, in that if people spend ever more time in virtual worlds, they may become less sensitive to consequences of actions in the real world.

In turning to regulation, Rosenberg (2022) effectively assumes that companies will not adopt trusted norms that would eliminate risks without government oversight, not least because the history of social media suggests that self-regulation, while often espoused by large and powerful corporations, may not be effective when implemented. He also argues that it is unrealistic to expect consumers to simply opt-out of the metaverse to avoid violations of their privacy and other abuses, not least because metaverse platforms could be one of the primary access points to digital content. Further, Rosenberg suggests that some level of government regulation will be required to prevent the exploitation of users within the metaverse. Such regulatory measures could include restricting both the monitoring and the emotional analysis of metaverse users, and restricting both virtual product placements and virtual personas within the metaverse.

4. Results

4.1. Case Study Findings

In its introduction to “Building a Responsible Metaverse”, Accenture (2023) claimed that “the world needs a responsible metaverse that is built with past lessons and existing challenges in mind so we can better anticipate - and account for - what lies ahead”, and that “as companies look to build their own metaverse experiences, they must put trust at the core of their strategy.” With this in mind, in 2022, Accenture (2023: 3) conducted a global survey of consumer experiences of the metaverse across 19 countries, and the results revealed “that consumers care about more than just the front-end experience and that organizations must dig deeper to earn their trust.”

Accenture (2023: 4) argued that “to earn and maintain users trust, companies must make sense of a complex array of questions and trade-offs, related to technology, policy, ethics and business strategy”, and that “companies will also have to apply past lessons to entirely new paradigms around data, ownership and governance.” In addressing privacy, for example, Accenture claimed that the primary purpose in collecting, processing and sharing user data should be to deliver value to the user. To this end, Accenture (2023: 6) argued that “design decisions should feature privacy defaults that are intuitive given the context of the use case or experience”, and that “companies should implement innovative strategies to educate users about the privacy options within the metaverse.” In a similar vein, in addressing security, Accenture (2023: 6) argued “security by design should focus on hardening infrastructure and software against novel threats, particularly cybercrime, fraud and disinformation”, that “companies should use an adaptive zero-trust security model”, and that “data protection should be in place to protect the confidentiality and integrity of experiences, data, and applications.”

Accenture (2023: 7) describe safety as “the top priority in virtual environments, and maintain that “platforms must proactively implement policies, technologies and practices, to discourage harmful content and behaviours”, and that “companies should invest in predictive and real-time detection capabilities as well as in-world features to enable users to manage their own safety.” In focusing on sustainability, companies are advised “when deciding how to build and select hardware, software and platforms for the metaverse, companies should evaluate environmental impact, such as energy usage, emissions and e-waste”, and that “users, creators and operators should be educated about what they can do to reduce the environmental footprint of the metaverse” (Accenture, 2023: 7).

Accenture (2023: 9) identified six critical areas of focus that companies should start “exploring and understanding” and “building in guardrails”, which “will provide a greater chance of alignment between the intended and the actual experiences of the metaverse.” Here, the argument was that the closer this alignment, the greater the trust, and the more successful the metaverse will be. The six areas were: privacy by design and by default; the risks and rewards of tokenisation; interoperability; digital safety; sustainability; and identity and inclusion. As regards interoperability, for example, Accenture suggests that while the communities, platforms, marketplaces and worlds of the metaverse are likely to operate with different degrees of openness, users will want to act seamlessly with applications and providers across virtual and digital asset platforms. Ultimately operators will need to address several challenges, to achieve interoperability, not least that the technology must be engineered to enable inoperability, which involves “the mobilization of vast resources as well as collective agreement and action from metaverse platforms (Accenture, 2023: 13).

A3Logics (2023) argued that if the metaverse was truly to benefit humanity, social responsibility issues must guide its platform development from the start. More specifically. A3Logics (2023: 3) argued that “as the metaverse becomes more developed and adopted, social responsibility issues will become increasingly important to ensure that this new digital realm evolves positively and ethically.” Five social responsibility issues were identified, namely, safety and well-being; inclusivity; responsible innovation; governance; and combatting illegal activity.

In examining safety and well-being, it was argued that as the metaverse will cater to all ages, it will be crucial to implement safety features, parental controls, and policies to protect users from harm, violence, harassment, and addiction. At the same time, it was suggested that metaverse must be designed so as to be accessible to people of all backgrounds, abilities and demographics, and thus issues such as diversity, accessibility and fairness, will clearly need attention. In outlining the importance of governance, A3Logics (2023: 3) noted that new rules, regulations, norms and standards should be developed to provide governance in the metaverse, and that “self-regulation by companies alone may not suffice.”

Further, environmental sustainability, inclusivity, and combatting online harassment and toxicity, are addressed. A3Logics, argued that as the metaverse continues to develop, so there will be increasing concern about its potential environmental impact. Here the issues are seen to include, energy consumption, e-waste, the reliance on rare earth metals, carbon dioxide emissions, and material sourcing. Metaverse technologies will see huge increases in global energy demand to run the data centres, servers, and devices that power the metaverse, and this, in turn, will lead to substantial increases in carbon dioxide emissions and to further global warming. Looking to the future, A3Logics argued that the priority is to improve the efficiency of metaverse technologies by using more renewable energy sources and designing low power options. The reliance of the metaverse technologies on rare earth metals and minerals, used in speakers, sensors and screens, for example, can have harmful environmental and social impacts related to their mining extraction and disposal.

While there are arguments that the metaverse could establish a more inclusive, diverse and connected world, such arguments are seen to depend largely on proactively designing inclusivity and diversity into the development process, and ensuring accessibility for users with disabilities and for underrepresented groups, from the start. A3Logics argued that this can be easily done by metaverse developer companies, that education can help awareness around inclusivity and diversity, and that challenging biases and broadening representation will be an ongoing process as the metaverse develops. There is also recognition that the metaverse will have the potential to amplify issues of online harassment and toxicity. Here A3Logics highlighted a number of critical considerations including identity anonymity, avoiding avatar designs and representations that promote stereotyping and de-humanisation.

Arguably more positively, A3Logics (2023: 3) claimed that “embedding social responsibility into metaverse development can help unlock several benefits”, including, gaining user trust; fostering innovation; avoiding regulation, and improving metaverse experiences. In focusing on trust, for example, the argument is that prioritising issues such as safety, privacy and inclusion, can help to convince users that their interests receive due consideration. Perhaps more tellingly, A3Logics also argued that self-regulation through a culture of social responsibility could pre-empt the need for external intervention, that the case for government regulation would be seen to be less imperative, if concerns about privacy, security and safety were being pro-actively addressed, and that would allow the metaverse to develop with fewer restrictive regulations, and that the need for government regulation is less imperative when issues such as privacy, security and safety are proactively addressed.

4.2. Analysis

This sub-section assesses the case study findings and extant literature to address the two RQs set out in the introduction.

4.2.1. What Are the Main Risks and Responsibilities Associated with the Metaverse? (RQ1)

Figure 2 depicts the main risks and range of responsibilities associated with the metaverse evidenced either in the case studies and/or in the extant literature reviewed earlier. It is clear that many of these issues are inter-related and need to be treated accordingly, in a comprehensive manner. Here, user privacy and security, and then environmental impact and sustainability, are explored in more detail to illustrate the interrelationship and complexity of these issues.

Firstly, in addressing issues of user privacy and security, Madiega et al. (2022: 8) suggested that “the massive volumes of data circulating in the metaverse and the ways in which this data will be used constitute a growing risk for users.” Here, issues were seen to include the security of metaverse enabling devices, building secure protocols to mitigate the risk of the transfer of harmful code between platforms and thus enable the seamless movement of users between virtual spaces, and identity theft, and avatar duplication and misuse. More generally, Flick (2022) suggested that there are significant ethical concerns about the use of non-fungible tokens, and recommended that they should not be used unless these concerns are addressed or mitigated.

At the same time, the massive volume of personal, and personal financial data available in the metaverse will continue to fall prey to hacking, sexual abuse, phishing and malware, while new forms of cybercrime, such as selling fake non-fungible tokens, malicious smart contracts and the illicit use of crypto-currencies may pose increasingly common challenges. There are also concerns that the metaverse will allow criminals and terrorists to use its multi-layered structure to hide behind encryption and untraceable non-fungible tokens, to conceal their identity. Nair et al. (2022), for example, reported on their empirical research which revealed that virtual reality attackers can access personal data from seemingly anonymous users of popular metaverse applications such as VRChat. More generally, there are also growing concerns about links between the metaverse and the dark web.

Secondly, the potential development of the metaverse introduces new perspectives on the environmental impact of digital technology deployment. APlanet (2022: webpage), the technology and sustainability consultancy, for example, questioned whether the metaverse will mean a waste, or a saving, of resources and whether its environmental benefits will outweigh the negatives in terms of sustainability and suggested that such questions are “shrouded in mystery”. At the same time, Khsetri and Dwivedi (2023) suggested that different metaverse applications vary widely in terms of their carbon footprints and environmental impacts, and that while leisure and enjoyment activities of the consumer metaverse will have adverse energy and environmental consequences, many industrial metaverse applications are likely to have a positive environmental impact.

There are differing and contrasting views this issue. On the one hand, under the banner “sustainability in the metaverse”, PWC (2023: webpage) claimed that “the metaverse holds the promise of substantial reductions in carbon emissions, whether through the substitution of physical goods with digital ones, replacing real world presence with digital interactions, or digital twins that will help us optimize the physical world , from the planet to individual humans”, and that “the immersive nature of metaverse experiences could also help us to overcome our behavioral barriers to climate change.” On the other hand, environmental and climate action pressure groups claim that the increasingly widespread use of the metaverse and the massive increase in computational power it will demand, will, for example, generate greatly increased carbon dioxide emissions. More generally, the Geneva Environment Network (2021: para.7) claimed that “digital activity has become a multifaceted entity, comprising everything from video streaming and online gaming, to cryptocurrency trading and digital banking”, that “these mediums come with an environmental price”, that “despite its seemingly separate existence from the physical world, digital technology has created its own unlikely carbon footprint”, and that its impact on global sustainability is widespread.

4.2.2. How Will the Metaverse Be Regulated and How Will Companies Report on Their Metaverse Responsibilities to Their Stakeholders? (RQ2)

For the past two decades, a growing number of companies have produced corporate social responsibility (and sustainability, and more recently environmental, social and governance) reports to communicate how they manage and mitigate the impacts of their business activities. If companies operating in the metaverse choose to report on how they are discharging their metaverse responsibilities, though currently there is no statutory requirement for them to do so, they may use their existing corporate social responsibility reporting processes, within which CDR is increasingly recognised as a fifth arm, alongside environmental, philanthropic, ethical, and economic responsibility (Wynn & Jones, 2023).

However, the growth and development of the metaverse will entail new forms of corporate responsibilities that require greater regulation, probably from both within the corporate environment and from outside via individual platform controls and government agencies. In due course, it may thus be most appropriate, as suggested by Mihale-Wilson et al. (2022: 18), to view corporate digital responsibility as “distinct” from corporate social responsibility, and thus to see it as requiring its own distinct reporting process. At present, whether companies will choose to pursue such a route in communicating on the discharge of their responsibilities for the metaverse remains to be seen, and will depend to some extent on which metaverse emerges over the next decade. If the more advanced dominant metaverse outlined by Deloitte (2022) comes to fruition in the next decade, then the implications for CDR and need for regulation are similarly moved forward at pace (Table 2).

Whichever version of the metaverse is developed and used by the business community, it will be important to ensure that what is reported can be understood by all stakeholders, especially the users. The independent external assurance and verification of the claims that companies make about the impact of their business activities, and how they manage those impacts, will surely determine the credibility of the reporting process. Here, there may be concerns that few companies will have the expertise to undertake assurance process, and that many of those that are, may be major players in the metaverse themselves, and thus commercial sensitivities may be seen as a problem. The platform providers will almost certainly have to impose some measure of self-regulation, but external regulation by governments and other agencies also seems inevitable, given the already considerable concern expressed by global governments regarding the current use of artificial intelligence and other digital technologies (Jones & Wynn, 2023).

5. Conclusions

The case studies outline many of the responsibilities associated with the development of the metaverse, but in some ways the outline of these responsibilities, and the issues surrounding them, raises as many, perhaps more, questions than it answers. While many companies may initially look to focus their strategic thinking on creating immersive marketing opportunities, expanding audience engagement, and digital advertising, if companies lose sight of their strategic responsibilities for the metaverse, and in so doing lose consumers’ trust, then they may find it increasingly difficult to reap the potential business benefits claimed for the metaverse. This paper has tried to illuminate and illustrate the complexities and uncertainties of discharging the strategic responsibilities inherent in the future development of the metaverse.

However, the paper has a number of limitations, not least in that it is not based on empirical corporate data, and in that it draws its information exclusively from Internet sources. Nevertheless, it offers some insights into the guidance available to companies who are looking to lay the foundations for the responsible metaverse, and as such helps to fill a gap in the academic literature. At the same time, the paper might provide a platform for future research into how companies are addressing their responsibilities for the metaverse. While a wide range of specific research avenues might be identified, two general themes would seem to stand out. On the one hand, it is important to develop a theoretical framework to help to locate corporate responsibility for the metaverse within the wider business and social context, and to provide a framework to underpin what will surely be a diverse and rapidly growing body of research work on corporate responsibilities for the metaverse. On the other hand, a variety of empirical studies might profitably explore how companies are addressing, introducing, and reporting on their responsibilities for the metaverse, and on consumers’ awareness, and understanding, of how companies are discharging such responsibilities.