Children's rights

The fund holds a diversified portfolio across sectors and markets. The long-term legitimacy of those sectors and markets depends on operations, products, and services that are ethically acceptable.

Companies may have an impact on children’s rights through their direct operations, supply chains, and other business relationships, through their interactions with communities, or as a consequence of the marketing and use of their products or services. Despite efforts to eradicate child labour, estimates from the International Labour Organization (ILO) from 2020 show 160 million children in child labour, including 79 million engaged in hazardous work.[1] Decent work opportunities and living wages for young workers, parents and carers is a core component of efforts to address child labour. Other areas in which companies may have positive and negative impacts on children’s rights include abuse, education, healthcare and nutrition, clean water, and the right not to be estranged from family. Companies can also affect children’s welfare through the marketing and use of their products and services, including children’s digital safety online and the right to privacy.

Children are entitled to all human rights. They are individuals and human beings with their own rights. At the same time, they are a unique stakeholder group in the sense that they depend on others to protect and enforce their specific rights. Children have specific vulnerabilities and needs; in some cases, business activities that have no negative effects on adults may be very harmful to children’s rights and well-being.

Although, under international law, the legal obligation to protect children’s human rights rests with governments, companies have a responsibility to respect human rights across their value chains and business relationships. Legally binding international instruments such as the UN Convention on the Rights of the Child with protocols[2] and the relevant ILO conventions[3] set out the full range of children’s rights. Guidance for companies on how to approach this topic can be found in the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and the Children’s Rights and Business Principles. The Guiding Principles establish a clear normative starting point for companies’ human rights strategies. The Children’s Rights and Business Principles provide a basic reference point for business action to respect and support children’s rights.          

In line with the Guiding Principles, companies should conduct ongoing human rights due diligence to identify, assess, prevent, mitigate, and account for how they address adverse human rights impacts. It follows from the Guiding Principles that respecting children’s human rights in direct operations, value chains and other business relationships should be an integrated part of company strategy, and that company priorities should be set based on the saliency of issues.

Respecting children’s rights is an inherent part of good business practice and risk management. A corporate strategy for managing children’s rights may uncover beneficial business opportunities and strengthen operations. Conversely, association with negative impacts on children’s rights may have negative business implications.

Our expectations are directed at all companies in our portfolio. They are especially relevant for companies with direct operations or supply chains in sectors and countries where there is a high risk of negative impacts on children’s rights, and for companies that make products or offer services for children or to which children may be exposed.

The issue of children’s rights requires a broad understanding and response from companies.[4] Appropriate strategies to address children’s rights issues need to be seen in the relevant social and economic context. The complexity of dynamic and globally diversified supply chains will necessarily mean that companies must prioritise their efforts. We expect companies to be transparent about their approach to respecting children’s rights and provide investors with reporting and data in line with international standards and emerging best practices.[5]

A. Integrate children’s rights into strategy and policies

• Companies should understand both the social and business implications of children’s rights and integrate findings into their strategic business planning.
• Companies should make a public commitment and, where relevant, define a strategy and adopt policies regarding respect for children’s rights, including on the elimination of child labour in all business activities and relationships.
• Companies should adopt strategies and policies based on international principles, industry standards and best practices addressing children’s rights across their operations and value chain.
• Companies could seek to identify opportunities for promoting children’s rights.
• Company policies should include measures for the identification and, where appropriate, prevention, mitigation and remediation of adverse impacts on children’s rights arising from direct operations, supply chains and other business relationships, as well as from marketing and use of its products and services.
• Companies should regularly consider whether their organisational structure, incentive systems, training programmes and wider company culture reflect and integrate respect for human rights. Employees and contractors should be engaged in these efforts and made aware of company policies and practices.
• Companies should recognise that the well-being of children is also contingent on the well-being of adult employees as their carers, and seek to provide decent work and living wages for young workers, parents, and carers.
• Companies may consider putting in place a mechanism for third-party expert input into their children’s rights strategies and policies. This should not replace appropriate internal processes, roles and responsibilities.

B. Integrate salient children’s rights risks into risk management

• Companies should identify and assess salient[6] risks related to children’s rights in their business operations, supply chains (including raw material sourcing) and other business relationships, as well as the marketing and use of products and services.
• Companies should specify actions to address identified risks, including through cessation, prevention, mitigation and remediation of adverse impacts on children’s rights.
• In setting priorities, companies should be guided by the size, nature and context of their operations and the severity of the risks of adverse impacts on children’s rights.
• Companies should, where relevant, define qualitative and quantitative indicators that enable monitoring and tracking of their impact on children’s rights. The performance of preventive and corrective actions should be tracked.
• Companies should carry out relevant impact and risk assessments before, for example, making significant investments in new business activities, such as agreeing mergers and acquisitions, entering new countries, regions or locations, launching new products and services, and establishing new business relationships.
• Companies should have an adequate supply chain management system which incorporates children’s rights considerations, including policies for detecting and preventing supply chain child labour. To this end, companies should have in place monitoring systems, contractual clauses, incentives and corrective instruments, such as education and training.

C. Report on salient children’s rights

• Companies should publicly disclose their commitment, strategy, policies and processes on respecting children’s rights, and report on their implementation of the UN Guiding Principles on Business and Human Rights and other relevant international standards.
• Companies should disclose action plans, governance structures, operational procedures, risk and impact assessments, and information about stakeholder relationships and remediation processes, where appropriate.
• Companies should ensure that information is communicated in a relevant and accessible manner, which demonstrates explicit and active commitment from senior management.

• Companies should identify, monitor and report on the status of relevant topics. Performance reporting should, where appropriate, use metrics that enable year-on-year comparison in line with applicable internationally accepted reporting standards or initiatives.
• Companies should disclose information at an appropriate level of detail on activities in high-risk sectors and geographical areas and, as far as possible, be open about dilemmas they face and priorities they set.
• Where appropriate, companies should report the above information for supply chains and other business relationships, taking a full value-chain perspective.[7]

D. Engage transparently and responsibly on children’s rights, including through grievance mechanisms

• Companies should have policies for engaging constructively with policy makers and regulators on children’s rights and be transparent about those policies or guidelines.
• Companies should outline their position on specific regulations relevant to their business profitability and outlook, and consider promotion of policies supportive of the rights of children.
• Companies should understand their social and environmental impact on, and the associated needs of, the communities surrounding their direct operations, supply chains and other business relationships, as well as on the users of their products and services. Companies should explicitly recognise children as stakeholders.
• Companies should develop appropriate policies and mechanisms for engaging with children, parents and carers on aspects of the business affecting children in order to gain a better understanding of their actual or potential impact on children’s rights. 
• Companies should, where relevant, engage with industry peers, business partners and local stakeholders on children’s rights issues. This applies both in collecting the necessary information and research, and in developing preventive and corrective action plans.
• Companies should establish or participate in effective and accessible operational-level grievance mechanisms for adverse impacts on children’s rights arising from their direct operations, supply chains and other business relationships, and take steps to make these mechanisms accessible to children and their representatives, as appropriate.

[1] International Labour Office and United Nations Children’s Fund, Child Labour: Global estimates 2020, trends and the road forward, ILO and UNICEF, New York, 2021.

[2] Convention on the Rights of the Child (1989) and the Optional Protocols on the involvement of children in armed conflict (2000), the sale of children, child prostitution and child pornography (2000) and a communications procedure (2014).

[3] ILO Conventions 182 (Worst Forms of Child Labour) and 138 (Minimum Age).

[4] For example, to achieve its intention, a strategy to address child labour may also be guided by the principle of living wages for parents that are at least sufficient to cover basic family needs in a given location.

[5] See for example GRI 408: Child labour.

[6] Guidance on identifying salient risks can be found at: www.ungpreporting.org/reporting-framework/defining-a-focus-of-reporting/statement-of-salient-issues/

[7] Companies should, for example, report on how they intend to abolish practices that are inconsistent with ILO Conventions 182 (Worst Forms of Child Labour) and 138 (Minimum Age) in their direct operations and their supply chain, including raw material sourcing.