Protecting children’s rights should not be optional – companies need to improve

The latest benchmark report from Global Child Forum examines the state of children’s rights in the Food, Beverage and Personal Care sector. We at BCG are proud to have contributed to this report, since 2014 we have screened and scored over 3,000 companies, creating the largest benchmark on companies’ implementation of children’s rights globally. The most recent benchmark scores reveal how well some of the world’s largest consumer brands perform in relation to their peers.

The influence of this 18 trillion-dollar sector on the lives of children is immense. From the products they produce and market, to the way companies operate can have an enormously positive effect on young people. But, as the report shows, this sector also continues to grapple with pressing issues such as child labor – especially in agricultural supply chains.

Children’s rights in the community and environment are also impacted by consumer brand’s operations from possible exposure to harmful chemicals, contamination or overuse of local water supplies, and products developed without proper nutrition and well-being in mind, undermine a child’s right to health.

3 central key takeaways from the most recent benchmark 

• Product safety and responsible marketing is lacking. Industries in the sector scored an average of just 2.7 (out of 10) looking at disclosures related to how companies’ marketing, product and services impact young people. This is especially surprising as many of the companies benchmarked are consumer-facing companies whose products and services are often available to children.
• Issues of child labour are not being systematically addressed. Of the companies assessed, 77% disclose they have a child labour policy – and a relatively high percentage (48%) also disclose a process for assessing their suppliers. However, there is a disconnect when it’s revealed that only 25% of companies report on the outcomes of their policy against child labour. This puts in doubt their seriousness regarding not only children’s rights, but human rights as well (64% of the companies do not report on any outcome or compliance regarding human rights commitments overall).
• Companies score well on governance. The area of Governance and Collaboration is a new, separate, impact area for our benchmark analysis – and it’s the best-performing area across all sectors. It’s heartening to see companies embrace international standards and frameworks as well as collaborate with NGO partners. However, while over half of the companies say that human rights is a board- level issue, only 17% of companies specifically include children’s rights in that oversight.

So, after scoring 310 companies, who are the leaders of their industry?  

Unfortunately, very few. Less than 10% of the companies can be considered “Leaders”, according to the performance structure of the benchmark which categorizes companies as either Beginners, Improvers, Leaders and Achievers. While there has been some positive movement among those companies benchmarked in our last global benchmark, there is much room for companies to harness market potential for people and profit.

Today, large investors are taking a child-inclusive investing approach and incorporating the benchmark data as a component of their investment strategy, driven by an investment conviction that an understanding of sustainability issues is essential to improving long-term financial outcomes. Increasingly, investors are using a company’s adherence to children’s rights issues as a proxy for a company’s overall resilience, excellence and leadership position, much like they look to issues around climate and the environment.

What does it take to be a corporate leader in children’s rights? 

Global Child Forum has identified four main areas that characterize leading companies that strategically manage their impact on children:

1. Go from policy to practice. Leading companies report transparently on risks or instances of child labour and have involvement from the top, i.e., the board prioritizes children’s rights issues.
2. Understand children’s rights beyond child labour. Leading companies understand that children’s rights go beyond child labour (and charity).
3. Know your impact and manage your risk. Leading companies know what their main risks are and address them credibly.
4. Join forces. Leading companies collaborate strategically with others.

Want to know who’s leading the pack within this sector? Click here for a full list of scores.