Q&A with Matthew Goodwin,
Head of Sustainable Investing

Businesses today are increasing their understanding of the need to assess, disclose, and plan according to risks related to children’s rights.  But how can investors and the wider financial community analyse how companies are carrying out this work, in order to make informed decisions?

Matthew Goodwin, Head of Sustainable Investing at Global Child Forum, tells us how the organisation’s benchmark data is a unique source of insight for the financial sector.

Why do investors, with over 7.9 trillion USD AUM, use Global Child Forum benchmark data?

What child-related risks are investors exposed to?

Children’s rights are a red line for company stakeholders. No other ESG topic is more universally emotive – for employees, local communities, governments, the press, and civil society groups – than companies harming children.

Businesses that fail to consider their impact on children face various negative consequences, including fines, litigation, bad press, and increased regulatory oversight.

Perhaps most important is the potential loss of customer bases and employees, who are increasingly aware of the impact businesses have on society. People want to work for, and buy from companies that share their personal values. Conversely, those that respect children’s rights are set to benefit.

Unlike other ESG issues, company stakeholders are not content with a transition period for child rights. While most stakeholders agree a transition is required to reach net-zero, there’s an expectation that children should never have been harmed in the first place. Now is the time for companies to get this right.

What child rights risks are on the horizon, which might impact investors?

Climate litigation globally is entering a game-changing new phase, triggering alarm bells for investors. According to the Grantham Research Institute on Climate Change and the Environment, and the Centre for Climate Change Economics and Policy, 2,000 climate change cases have now been filed against governments and corporations. 25% of these were filed between 2020 and 2022, and cases are increasingly being brought by young people seeking monetary compensation for climate damage. Could this set a precedent for young people to hold food and beverage companies to account for their contribution to global obesity, malnutrition, and a lifetime of ill health? Similarly, might young people take action against social media companies for knowingly contributing to record levels of mental health problems?

What about legislation?

Historically, children have been overlooked in Human Rights Due Diligence legislation. As a result, corporates have not reported on their impact on children, and investors have lacked meaningful information to consider children’s rights. Emerging Human Rights Due Diligence legislation in the EU, and indeed worldwide, is changing this. New CSRD and ESRS legislative packages require companies to disclose, manage and mitigate their impacts on workers in the value chain, affected communities, consumers and end–users. Children make up a significant part of these groups and Global Child Forum’s data helps investors understand how their investee companies adhere to the upcoming legal changes.

What is the Children’s Rights and Business Benchmark?

Since 2013, Global Child Forum, in collaboration with Boston Consulting Group, has been assessing how the world’s largest companies have implemented the Children’s Rights and Business Principles. These are a set of principles developed by UNICEF, UN Global Compact and Save the Children, to guide companies in supporting and respecting children, in line with their broader human rights commitments.

How are investors currently using the benchmark data?

There are four main ways. 

1. Integrating data into internal ESG platforms – alongside other ESG data – to assess, and upgrade or downgrade, ESG scores for each company.

Investors are uploading Global Child Forum’s business and children’s rights data onto their internal ESG platforms, alongside other ESG data. These platforms make our data, and multiple other sources of ESG data, available to all colleagues involved in the investment and stewardship processes. It also enables them to incorporate our child rights data into their top-level ESG scores for each company. Our data has had the effect of upgrading and downgrading these ESG scores – take a look at how Invesco are using it as a “a proxy for human rights in operations and products and services.” 

2. Stewardship: Mapping portfolios to our child rights database, to identify weaknesses and incorporate them into yearly engagement dialogues with investee companies.

Any areas of weakness identified are incorporated into the annual engagement dialogues that investors have with investee companies. Global Child Forum has further supported this by providing training and specific questions, to help stewardship teams effectively incorporate child rights into these dialogues.

3. Supporting Child Labour Red or Amber Flag Dialogues.

Many investors currently use large data providers who flag child rights abuses. The issue with these flags is that they are often isolated events that have occurred potentially years before they come to the attention of the investor. This makes it challenging for an investor to engage with a company on child rights. Global Child Forum data provides a broader, holistic view of how a company addresses children’s rights – whether it is improving over time, how it compares to peers, and where its key weaknesses are. Investors are using this data with red and amber risk flags to have more informed discussions with their investee companies about child labour abuses.

4. Establishing Child Rights Thematic Funds.

Global Child Forum’s data has also been used to build child rights thematic funds. We worked with Robeco to establish the world’s first fund focused on children’s rights, and our data is still used in this way, most recently by GLS Investment Management (German language) – an investor with a focus on climate and sustainable investment.

How much does the data cost?

Global Child Forum provides all our data sets free of charge. The data is available on our website, but we have also curated special data sets for the financial sector.

Recent global benchmark data sets include:

• 2021 Global Benchmark (832 companies)
• 2021 Tech & Telecom Benchmark (252 companies)
• 2022 Food and Beverage Benchmark (310 companies)
• 2023 Global Benchmark (1,108 companies)

To access our specialised data sets for the financial sector, please reach out directly to Matthew Goodwin, Head of Sustainable Investing.

Do you have any closing thoughts?

At Global Child Forum, we’re committed to empowering the financial sector with valuable data – to prioritise children’s rights and drive positive change. If you have any further questions, or want to join us in this crucial endeavour, get in touch!

Together, let’s create a world where children’s rights are universally respected and protected.