The ESG Scorecard: The Changing Landscape of Genetic Testing

The direct-to-consumer (DTC) genetic testing industry has transformed personal health and ancestry exploration, offering consumers remarkable insights from their DNA. Yet rising ESG concerns around data privacy, ethical use, and regulatory compliance are reshaping this landscape, pushing companies to prioritize consumer trust. Once a leader, 23andMe now faces steep challenges with data security, public confidence, and corporate stability. Recent breaches, including a leak impacting 6.9 million users, have led to lawsuits, a $30 million settlement, and boardroom upheaval, casting uncertainty on the company's future. Meanwhile, competitors like Ancestry and MyHeritage, though contending with similar issues, have remained comparatively stable. 
How does 23andMe compare to its competitors when it comes to ESG concerns? Read on to find out.

23andMe: From Market Leader to Data Breach Fallout

23andMe initially led the DTC genetic testing market but has faced a series of challenges, mainly around data privacy. A major data breach in 2023 compromised 6.9 million users’ information, resulting in a $30 million settlement and reputational damage. Board resignations followed, highlighting corporate governance issues. These events underscore the need for strong data security and governance in sustaining consumer trust.

 Key Controversies:

• • • Fears over DNA privacy as 23andMe plans to go public in deal with Richard Branson
    • 23andMe independent board resigns in a feud over CEO Anne Wojcicki’s plan to take the company private
    • Man sends lizard saliva to 23andMe for DNA testing, exposing total fraud of the company’s claims of human ancestry
    • Is 23andMe's 'Root for Your Roots' World Cup Promotion Racist?
    • Data Breach at 23andMe Affects 6.9 Million Profiles, Company Says
    • 23andMe Lays Off 14% Of Workforce Amid Declining DNA Test Sales

Ancestry: Customer Loyalty Tested by Rising Controversies

Ancestry has also faced privacy-related challenges, especially since its acquisition by Blackstone. Lawsuits claim the company misused consumer data without consent, violating privacy laws. Public backlash, such as from a controversial advertisement, has further affected Ancestry’s image. Yet, its solid user base has helped it remain stable compared to some competitors​.

 Key Controversies:

• • 
    
    • Ancestry.com apologizes for ad romanticizing slavery.
    • Lawyer's warning over family tree DNA tests as Blackstone buys Ancestry for $4.7b.
    • Ancestry.com Sued for Misappropriating Yearbook Photos for Database.
    • Ancestry Lays off 6 Percent of Employees due to Consumer Slump.

MyHeritage: Navigating Privacy Compliance Across Borders

MyHeritage, while facing fewer controversies than its peers, still encounters significant privacy scrutiny. Investigations in Norway and Denmark have raised questions about its compliance with data laws. Although MyHeritage’s controversies are less severe, maintaining regulatory compliance remains essential for its international operations.

 Key Controversies:

• • 
    
    • The Norwegian Consumer Council reports MyHeritage for unlawful terms and conditions.
    • NORWEGIAN SUPERVISORY AUTHORITY: The Data Inspectorate opens an investigation on MyHeritage.

Conclusion

The future of the DTC genetic testing industry depends on how effectively companies manage ESG risks. Companies like 23andMe, Ancestry, and MyHeritage can better protect consumer trust and build a foundation for sustainable growth in this scrutinized sector by prioritizing data security, strong governance, and compliance.

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