Global Child Forum Calls on European Commission to Tighten Children’s Rights Reporting Standards

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.