What does this mean for business and investors?

The findings reported in this Global Child Forum Benchmark quant analysis raise questions such as; what does corporate reporting on children’s rights tell us about them, and can engaging with children’s rights also have secondary positive benefits for companies?

A statistical analysis doesn’t answer whether focusing on children can create synergies and positive effects for companies, but there are a few tentative conclusions/hypothesis that can be drawn from the collective experience of Global Child Forum’s work with corporates, and which might help start a conversation on the linkages between engaging on children’s right and performance in other areas:

  • Today, there is a push by outside actors for companies to report on their impact on children which is driving the engagement on children’s rights, especially on child labour. Simultaneously, attention to these issues from companies through their reporting results in a higher Corporate Sector and Children’s Rights Benchmark score. Although the findings in this report show that there is a higher probability for companies that have a high benchmark score to also have been involved in some kind of human, or children’s, rights violation, there is no absolute link between the two. There are many companies with a high benchmark score, with no registered controversies relating to children, showing that there is an opportunity for those with a lower benchmark score to decrease risk of such controversies by working actively with due diligence and risk assessments (and raise their score), as a preventative measure rather than a reactive one.[1]
  • A high children’s rights benchmark score, together with other factors, such as a larger revenue or higher EBITDA-margin, could indicate a well-run company that is more resilient and better prepared against sustainability and human rights (including children rights) risk than their peers. The other side of this argument is that small/mid-sized companies or those that are less profitable are more likely to have a low score and can thus be pushed in the right direction, creating a children’s rights/sustainability momentum.[2]
  • A high children’s rights benchmark score can be an indicator of a company with a well-integrated sustainability perspective, whereas a low score on children’s rights indicators could be a cause for concern about long-term sustainability.

 

[1] As we don’t have historical data on controversies, there is a possibility that these companies have had a controversy more than three years ago, that have been deemed resolved and thus removed from the data.

[2] N.B. this doesn’t imply that small/mid-sized companies can’t be well-run or profitable.

Benchmark Quant Analysis

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