Shortlisted for PRI Awards 2024: Recognition for Action – Human Rights
Organisation: Swedbank Robur
Signatory type: Investment manager
HQ country: Sweden
The approach, initiative or process
Private sector participation is critical if we are to achieve the UN’s Sustainable Development Goals by 2030. The finance sector has the potential and the responsibility to influence companies’ sustainability efforts by encouraging them to identify and manage their sustainability risks and opportunities. The intense focus on climate and nature necessitates a just transition that incorporates human and children’s rights.
Swedbank Robur’s vision is to be a world leader in sustainable value creation. Our sustainable value ambition is to create long-term return for our customers, while contributing to the positive development of society and the environment. Our work on sustainability began in the 1980s when we launched our first environmental fund. Since then, sustainability has developed to encompass far more than the environment. As Sweden’s largest fund company, we have a responsibility and opportunity to take a clear stance on issues that are important to our clients, investments and society.
Children’s rights have been part of Swedbank Robur’s sustainability analysis for a long time. Children are among the most vulnerable stakeholder groups but they are often overlooked by companies in the scoping of stakeholders and material sustainability. Recognising this, we published our first Position Paper on Children’s Rights in 2010, setting out our expectations on how the companies in which we invest should incorporate children’s rights into their businesses. Since then, Swedbank Robur has undertaken thematic engagement to improve children’s rights, bringing together the Swedish non-profit foundation Global Child Forum, European investors and international companies.
Companies’ impact on children’s rights
Companies impact children in numerous ways. For example, children are affected by their parents’ forms of employment, working conditions and wage levels. Young people and children also work within the production and service industry. Additionally, as the end users of some products and services, children are stakeholders to businesses in both local and global contexts.
When considering children as consumers, many companies need to improve their compliance with privacy and marketing laws, including how they design, label and market products and services directed at children. Companies that protect and promote children’s rights attract more positive attention from investors, enjoy higher employee satisfaction and unlock new market opportunities.
Through our engagement activities, we have identified the following ways in which companies can address their impact on children.
- Bridge policy gaps and include children’s rights when developing policies.
- Enhance reporting practices.
- Implement measures to prevent and counteract child labour.
- Give particular consideration to young workers.
- Ensure a good work-life balance for parents by respecting employee rights and providing good working conditions.
- Ensure that neither establishment on new markets nor products or services harm children.
To further develop our knowledge and influence companies, Swedbank Robur has been cooperating with the non-profit foundation Global Child Forum since 2022. The aim of this cooperation has been to make companies more aware of their potential to support children’s rights.
Global Child Forum was initiated by H.M. the King and H.M. the Queen of Sweden in 2009 as part of their long-standing commitment to children’s issues. Global Child Forum offers a range of products, free of charge, to help companies improve their approach to children’s rights. With Global Child Forum’s tools, companies can easily conduct due diligence, access guidance on incorporating children’s rights into their business processes and compare against peers.
Since 2013, Global Child Forum has been benchmarking how the world’s largest companies address children’s rights. The benchmark can be used by companies to increase their social impact, or by investors to inform their decision-making. Swedbank Robur uses these benchmarks as an analytical tool and to engage with companies.
In early 2023, Swedbank Robur coordinated an engagement effort targeting 35 companies worldwide. Together with Global Child Forum, we sent letters to the targeted companies inquiring about their consideration of children’s rights. To gain additional leverage, we invited fellow investors to endorse the letter. The letters were endorsed by 12 European financial institutions with a combined value of €875bn assets under management.
In the letters, we encouraged the companies to:
- conduct yearly impact assessments of the risks and dynamics of child labour in their operations and supply chains and take concrete action to prevent and remediate any issues identified;
- publicly disclose, on an annual basis, the outcome of these impact assessments and planned actions;
- consider children as stakeholders when developing and marketing products and services by:
- conducting downstream impact assessments on how children might be impacted by marketing, advertising and products;
- developing marketing and advertising that supports children and teenagers (and their parents) to build healthy habits and self-esteem;
- developing products that meet growing children’s nutritional and hygiene needs, and re-engineering products that cause negative health effects in children.
Even though we have already seen results from our engagement, the work will continue. Together with Global Child Forum, we have sent follow-up letters to 20 companies from the original selection that we believe still have improvement potential. We will continue to follow up on the companies’ responses and ensure that they translate their commitments into tangible actions. We will keep raising issues related to children’s rights in our dialogues with companies in the hope of improving the lives of children on a global scale.
We have also started a collaboration with Unicef Sweden and seven capital goods companies in Sweden regarding child labour and conflict minerals in the Democratic Republic of Congo. The aim is to create an opportunity for companies that are working to improve human and children’s rights in their supply chain to learn from each other.
The measures to ensure transparency
We have received a great response to the letters sent out in 2023.
One of the companies that received the letter was Tencent. The company scheduled a meeting with Global Child Forum to discuss how it could enhance its commitment to children’s rights; it has subsequently started several related initiatives.
Two other companies that received the letter made significant improvements in their Global Child Forum benchmark rating (out of 10): Grupo Bimbo went from 2.5 to 6.4 and Mowi ASA from 3.8 to 6.1. We see this as proof that we, as an investor, can impact companies’ agendas and sustainability priorities.
An October 2023 analysis found general improvements in the targeted companies’ Global Child Forum benchmark scores compared to previous years. For example, 92% of the companies that were contacted in the food, beverage and personal care sectors performed better and had increased their scores from an average of 4.6 out of 10 in 2022 to 5.8 in 2023.
Our conclusion from this targeted outreach is that companies clearly want to work on their approach to children’s rights.
PRI disclaimer: This case study aims to contribute to the debate around topical responsible investment issues. It should not be construed as advice, nor relied upon. It is written by a guest contributor. Authors write in their individual capacity – posts do not necessarily represent a PRI view. The inclusion of examples or case studies does not constitute an endorsement by PRI Association or PRI signatories.
