Corporate Impact and Response:
Poor Disclosures on Impact on Children, Especially in Relation to Products and Marketing

The Corporate Sector and Children’s Benchmark assesses how corporates disclose their impact on children’s lives across a wide range of issues as set out in the Children’s Rights and Business Principles.

The 27 indicators are divided into 3 so-called Impact Areas, which are based on how companies interact with children’s lives in different ways. Companies in the benchmark receive a score for each of the impact areas:[1]

Workplace – child labour and family-friendly workplaces

Marketplace – responsible marketing/communication and product safety

Community & Environment – indirect impacts from operations and supply chain

It is encouraging to see that, since 2019, average scores for each area have increased.[2] Although still not close to the total possible score of 10, companies overall score the best on Workplace, with Community & Environment not far behind. The average score for Marketplace is least improved and remains significantly lower than scores for the other areas.

What exactly are global companies scoring better and worse on? And what are the implications for business? Keep on reading for more detailed indicator results and analysis for each of the areas!

[1] For more detailed information about the Methodology, see the About our Benchmark page.

[2] When comparing 2019 vs 2021 scores, it is important to note that there have been significant improvements in the methodology in 2021, thus, it was essential to adjust the 2019 scores to the updated methodology to arrive at meaningful comparison. For more information about this adjustment and the changes in the methodology go to About our Benchmark under the section Updated Methodology

To assess the degree to which a child rights issue has been addressed and integrated in a meaningful way by a company, the benchmark indicators are grouped into three maturity steps: Policies & Commitments; Implementation; and Reporting & Actions (read more here under the section About the Corporate Response Maturity Ladder).

The disclosure gap between policy and performance

The results show a clear gap in disclosures: companies perform better when it comes to disclosing their aims as opposed to disclosing actual implementation, outcomes or related risks.

This is reflected by the fact that, in general, companies score highest on indicators that cover Policies & Commitments. They also score the lowest overall on the indicators that pertain to Reporting & Actions.

The benchmark methodology has 3 scoring levels for each of the 27 indicators:

In the sections below, there is additional information as to how all companies in the study scored on selected indicators. Go to About our benchmark to learn more about our methodology.

In the Workplace area, the corporate sector impacts children’s lives in two major ways:

• Child labour and decent work for young workers. Child labour, often the first topic that comes to mind when considering how children’s rights are of relevance to the corporate sector, requires companies to take appropriate measures to assess risks, prohibit, prevent, report on findings and provide remediation. Ensuring decent working condition for young people is another key element.
• Family-friendly workplace policies and programmes are of obvious relevance to children’s daily lives. Family-friendly efforts by companies impact the amount of access children of employees have to their parents (for example, through parental leave that exceeds what is legally required or availability of flexible work arrangements) and ensures that children are looked after when parents are at work.

The results show that global companies are getting better at demonstrating their commitments, especially with respect to child labour, but do not disclose information to the same degree about how they transition from commitment to action. If this signifies a lack of real commitment, it should taken as a warning sign that not all company commitments actually have the effect being claimed.

Best scoring indicators:

On the other hand, companies are scoring low on:

Note that all of these indicators cover disclosures as to either a company’s own operations or supply chain, as child labour isn’t material for all companies in relation their own operations.

Worth noting is the score for Board Accountability, i.e. having a board that is accountable for policies on child labour or a family-friendly workplace, for example, by receiving reporting on progress or compliance.

Here we see that the majority of company boards are following up on compliance or progress on labour or human rights generally (score of 5), but not specifically in relation to child labour or family-friendly workplace policies.

The highest scoring companies in the workplace area (WP), scoring a full 10 on all indicators, are (here in order of their total average score):

In the Marketplace area, the corporate sector impacts children’s lives in two major ways:

• Responsible marketing, which is important for children and young people as the recipients of marketing messages. When companies market to children, do they recognise their particular vulnerabilities? In addition, even if unintentional, children often receive the same marketing messages as adults. Does a child know how to contextualize these messages and understand them properly?
• Product safety, which is particularly important when products are intended for children’s use. However, even if a product is not produced explicitly for children, they are potentially unintended users.

The results show that, with a few exceptions, global companies are not prioritising children as stakeholders with regard to their products and marketing. This poses not only a potential risk for companies that are not properly assessing the harm their products and/or marketing could cause children – especially when children are not the intended consumers, an apparent blind spot for many companies. It is also a lost opportunity to gain and retain market shares by leveraging the product or marketing to support children and improve their lives. Given that many companies already score for giving consideration to these issues generally, there is potentially just a small step to incorporating a children’s perspective.

Best scoring indicators:

*Explicitly including children within this area

The results for the two indicators focusing on reporting on outcomes, i.e. incidents of non-compliance with established policies or norms, are the lowest scores:

*Explicitly including children within this area

The top 5 scoring companies in the marketplace area (MP), are:

In the Community & Environment area, the corporate sector impacts children’s lives in two main ways:

• Environmental impact, which has a disproportionate effect on children compared to adults, both at present (for example, pollution, which children are particularly vulnerable to) and in the future (through long-term impacts such as CO2 emissions, circularity and sustainable use of natural resources). It has also been shown that climate change has a more immediate effect on children, impacting not only their physical health negatively, but also their mental health and well-being.
• Social impact which is particularly important to children, for example, in access to healthcare, education and social protection.

These issues are primarily the responsibility of the public sector, but business has a necessary role too, both in environments where state protection is weak and in cases where companies want to contribute (and to give back) to society by, for example, supporting children’s access to quality education.

The results show highs and lows, including both the best and the lowest scoring indicator of all. Global companies are disclosing well on the environment, both for policies and reporting on outcomes. When it comes to their impact on surrounding communities, on the other hand, they are not considering risks to children related to their operations or supply chains. At the same time, companies are focusing considerable effort and resources to support children through programmes to provide quality education, healthcare, etc.

This gap between recognition of risk and efforts focused on children could mean that companies neglect the effects of their own footprint, while spending their resources elsewhere.

Best scoring indicators:

Whereas companies score poorly on indicators focusing on:

Worth noting are the scores for Board Accountability and Materiality Assessment:

Here we see that the majority of company boards follow up on compliance or progress on environmental impact in general (score of 5), but not specifically in relation to children. In other words, companies are not connecting their environmental efforts to one of the most affected target groups. With growing demands for climate justice and ensuring that efforts to reduce environmental/climate impact also heed human rights considerations, this is an area where most companies have a major opportunity to improve and should make use of a child rights perspective to do so.

The top 5 scoring companies in the Community & Environment area (C&E), are:

In all impact areas (Workplace, Marketplace and Community & Environment), generic Collaboration indicators are added to the Reporting and Action indicators when the area score is calculated.

This is because collaboration is an important key to solving complex problems. To best address children’s rights, it is important to collaborate with others in two major areas:

• Collaborate with NGO’s/charities on children’s rights, either through donations or through more strategic collaborations (such as joint programmes) or seek expert advice from these organisations.
• Strategic collaborations with or initiatives with industry peers or participation in public-private partnerships on children’s rights, such as combatting child labour, providing quality education, nutritious meals to school children, or vaccination programmes.

The results show that companies disclose more information on collaborations with child rights organisations than they do regarding partnerships and joint initiatives with peers or governments to combine efforts to solve some of the more difficult issues in relation to children, such as child labour.

Inicator/issue

There is little difference between the sectors’ impact area scores, but we do see slightly more variation than for the Overall score (which is a weighted average of the three impact area scores).

What stands out here is that, despite the fact that Apparel & Retail, Healthcare, Food, Beverage & Personal Care, Technology & Telecommunications, and Travel & Leisure could be considered to be “closer to children” in terms of products and services, they do not score well on the Marketplace area.

Marketplace is an area where companies in these sectors could be missing opportunities to capture market shares or perhaps have blind spots with respect to potential harm their marketing or products could cause children, especially when children are not the intended audience or target market.

For more information on high and low scoring indicators for each sector, go to the “Sector Scorecards”