Global Child Forum
Global Child Forum Calls on European Commission to Tighten Children’s Rights Reporting Standards
Stockholm, July 2023
The European Commission has released the draft delegated regulation that complements the European Accounting Directive and includes the initial set of European Sustainability Reporting Standards (ESRS) required by the Corporate Sustainability Reporting Directive (CSRD). Stakeholders have a four-week consultation period to provide feedback, with a submission deadline of July 7th.
The revised draft incorporates significant changes, such as adopting a materiality approach, phasing in requirements, converting certain disclosures into voluntary data points, and introducing flexibilities while ensuring alignment with EU regulations and global standards.
Business activities often directly or indirectly impact children through supply chains, product marketing, or environmental impacts and Global Child Forum welcomes the explicit mention of children in the standards in relation to child labour and product safety. We are also pleased to see that the general requirements for defining stakeholders include mention of not only the obvious groups such as employees and consumers, but also highlight the need for considering vulnerable groups, in line with the UN Guiding Principles.
However, we are concerned that children are not mentioned as a vulnerable group (or in the words of the standards: “persons in vulnerable situations”. We know from our research and our interaction with representatives of companies, that when children are not explicitly mentioned, they tend to be overlooked as a stakeholder. This is likely to affect the extent to which companies report on their children’s rights impact as many companies exclude children’s rights from their materiality analysis.
One notable revision in the draft is the introduction of a materiality assessment for disclosure requirements. While the original proposal deemed many requirements automatically material, the new draft subjects most disclosure requirements to the outcome of a materiality assessment.
By excluding children’s rights from the materiality analysis, companies disregard a crucial stakeholder group and neglect to address their unique vulnerabilities. Ignoring their rights in the materiality analysis can result in an incomplete understanding of the potential risks and opportunities related to children’s well-being.
For example, in Global Child Forum’s last global study of the largest companies in the world (2021), 84% of companies in the benchmark had a child labour policy. Still, only 58% of companies followed up on these policies through audits or other forms of supplier assessments, and a mere 20% reported on incidents or risks of child labour. When examining how companies protect and support children in relation to their marketing, advertising, products, and services, were the lowest scoring among all indicators (the marketplace impact area scored only 3.0, out of a possible score of 10 the lowest among all impact areas analyzed). Especially for consumer-facing companies, it is essential to make use of a children’s rights perspective, especially in regard to marketing activities and make this core to their business – not just an “add-on”.
Moreover, overlooking children’s rights can hinder sustainable development efforts. Children are entitled to protection and opportunities for growth, education, and a healthy environment. By not respecting these rights, companies miss the chance to positively impact future generations and contribute to the long-term well-being of communities.
While pleased to see that the draft ESRS and the delegated act from the Commission recognise children as stakeholders in some areas, we call on the Commission to recognize children more explicitly as one of the important stakeholder groups within the concept of “persons in vulnerable situations.”
Companies need to integrate the consideration of issues relevant to their impact on children into their materiality analysis and ensure they report on those deemed material. However, given the absence of explicit mandates requiring companies to prioritize children, it is likely that they will continue to overlook children as an important stakeholder group.
There is still time to voice concerns and provide feedback to the European Commission. Stakeholders are encouraged to participate and ensure their voices are heard before the deadline.
About Global Child Forum
Founded in 2009 by the Swedish Royal Family, Global Child Forum is a leading forum for children’s rights and business dedicated to innovative thinking, knowledge-sharing and networking. Global Child Forum believes in the power and responsibility of business, working in partnership with all parts of society, to create a prosperous, sustainable and just society for the world’s children. In addition to forums, Global Child Forum delivers research perspectives, best practices and risk assessment tools designed to unlock opportunities for business to integrate children’s rights into their operations and communities. For more information, please visit: www.globalchildforum.org.
For further information, please contact:
Linda Ravin Lodding
Head of Communications
Global Child Forum
+ 46 72 387 0248