Nina Vollmer
Director Child Rights and Sustainability
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Opinion
Putting children’s rights on the sustainability reporting agenda:
Material for business
Global Child Forum
PUBLISHED: JULY, 2023
Recently, the EU Commission released the draft delegated act for the European Sustainability Reporting Standards (ESRS), which are planned to be finalised before the fall. These new requirements are being introduced in an attempt to increase transparency and improve accountability for business when it comes to sustainability. This means that large companies operating within the EU will soon have to report on their impact on the environment, society and their social responsibility towards employees and customers.
This is good news for everyone who cares about sustainability and wants a level playing field for business. And there’s one group in particular that this legislation could potentially support: children and teenagers.
Children – Unseen Stakeholders
Children matter to business, but are often overlooked in their considerations. Children are not only the future of our society but also members of it today. Nonetheless, this group, which makes up about one-third of the global population, is not considered by many businesses who fail to fail to prioritise safeguarding their well-being. Companies must recognise their responsibility in ensuring that their policies and practices have no adverse effects on children’s lives.
We see this pattern clearly through Global Child Forum’s Corporate Sector and Children’s Rights Benchmark, which assesses company reporting on how they impact children’s lives. The benchmark results – which we have been doing for 10 years – clearly show that companies tend not to fully report their impact on children in their sustainability disclosures.
For example, in our last global study of the largest companies in the world (2021):
- 84% of companies in the benchmark have a child labour policy, but only 58% of companies follow up on these policies through audits or other forms of supplier assessments, and a mere 20% report on incidents or risks of child labour.
- The indicators which analyse how companies protect and support children in relation to their marketing, advertising, products and services[1] were the lowest scoring among all indicators.
These shortcomings arise from companies failing to recognise children as stakeholders in their own right, resulting in a lack of emphasis on their perspective. This oversight leads to disregard the importance of highlighting children’s interests and concerns. By neglecting to view children as active stakeholders, companies inadvertently undermine the significance of incorporating their needs and rights into their operations and reporting.
Why do the ESRS matter?
We are happy to see that the draft ESRS and the delegated act from the Commission recognise children as stakeholders, highlighting the need to consider the impact on vulnerable groups in line with the UN Guiding principles. At the same time, children are not mentioned explicitly except in relation to child labour and the safety of certain products. With what we know about how companies understand – or rather don’t understand – their impact on children, there is a risk that this lack of explicit mention of how to relate to children as a key stakeholder group, especially in the materiality assessment process, will result in a continuing trend of weak reporting in relation to this important but often overlooked group.
However, it’s important to note that the standards provide companies with the flexibility to report on material topics and indicators that extend beyond the explicitly listed ones, as long as they are considered significant by the company itself. This presents an opportunity for businesses to proactively integrate a children’s rights perspective into both their operational practices and sustainability reporting.
In line with our commitment to advancing children’s rights, we will be submitting feedback to the Commission, urging them not only to retain the specific mentions of children in the ESRS but also to explicitly emphasize children as a crucial stakeholder group to be included in the materiality assessment.
Together, we can drive positive change and foster a future where children’s well-being is a top priority for all businesses.
We offer support for companies!
Through Global Child Forum’s benchmark, individual companies gain exclusive access to comprehensive and detailed assessment results. These findings serve as a valuable resource for businesses to pinpoint improvement areas and identify gaps in their reporting regarding children’s rights. To discover your company’s specific results and take proactive steps towards enhancing your approach, search for your company here.
To facilitate the identification of material topics, we have developed a materiality Industry Risk Tool that specifically focuses on the most significant risks of negative impacts on children across over 30 industries.
[1] N.B. this is important for most companies as children are affected even indirectly and not only when the company considers children to be the target group our direct customer/user.