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Episode 22: International Children’s Rights

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In 2019, UNICEF and Sustainalytics partnered to develop Investor Guidance on Integrating Children’s Rights into Investment Decision Making. The resulting guidance is directed at investors and ESG research providers interested in exploring how companies and investors can mitigate risks and identify opportunities that advance children’s rights while generating both societal and upside financial benefits. It aims to help investors ensure that child rights impacts linked to business activities do not constitute a blind spot within their approach to responsible investment and active ownership.

On this episode, Michael Torrance speaks with report co-author, Tytti Kaasinen Associate Director, Engagement Services at Sustainalytics and Simon Chorley, International Programs Manager at UNICEF Canada, who is actively working with the investment community to apply the report recommendations.

In this episode:

  • What are child rights?

  • What is the role of child rights in business?

  • How investors can benefit financially while supporting and advancing children’s rights 

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Simon Chorley: Children as we define it under the age of 18, they might make up only one in five of the population in high-income countries like Canada or the US, but they make up to one in three of the world's population and up to half of the population in low-income countries, so they're a key stakeholder, and yet so often when we engage with business, we see that they're a neglected stakeholder.

Michael Torrance: Welcome to "Sustainability Leaders." I'm Michael Torrance, Chief Sustainability Officer with BMO Financial Group. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment, business practices and our world.

Disclaimer: The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates or subsidiaries.

Michael Torrance: In 2019, UNICEF and Sustainalytics partnered to develop investor guidance on integrating children's rights into investment decision-making. The resulting guidance is directed at investors and ESG research providers interested in exploring how companies and investors can mitigate risks and identify opportunities that advance children's rights while generating both society and upside financial benefits. It aims to help investors ensure that child-rights impacts link to business activities do not constitute a blind spot within their approach to responsible investment and active ownership. Today I'll be speaking with Tytti Kaasinen from Sustainalytics, a coauthor of the report, and Simon Chorley of UNICEF, who's actively working with the investment community to apply the recommendations from the report. By way of background, Tytti is responsible for coordinating Sustainalytics' thematic engagements. She always works on proactive engagement projects addressing specific ESG risks, opportunities and impacts pertaining to business. Within Sustainalytics' engagement services, she also has a particular topical expertise in water risks, children's rights, food, retail and garment sectors. Before joining Sustainalytics, Tytti was the Head of Stewardship and Risk Engagement and Senior Engagement Manager at GES having previously worked as a responsible investment analyst at the Cooperative Asset Management in Manchester, UK. She has 10 years of experience in responsible investment and active ownership. Simon Chorley is the International Programs Manager at UNICEF Canada. He leads the organization's engagement with the Canadian private sector on child-related ESG risks with a specific focus on the financial, extractive and garment sectors and supply chains. He has 13 years of experience in human rights and international development having previously worked for an international anti-human-trafficking organization in London. He was born in England and grew up in East Africa, holds a master's degree in international relations and lives in Ontario. Thanks to you both for being with me today and speaking on the podcast.

Simon Chorley: Thanks for having us.

Tytti Kaasinen: Looking forward to it.

Michael Torrance: So first of all, Simon, I'm just going to start with you. Could you tell us a little bit about UNICEF? I mean, we've all heard about it and probably all, like me, as children raised money at Halloween for UNICEF. Well, what does UNICEF do, and what is the focus of the organization?

Simon Chorley: Yeah, sure. Thanks, Michael. Most people, particularly in Canada and North America, would be familiar with UNICEF from the orange Halloween boxes and the trick-or-treat at everyone's doorstep. We don't do that physically anymore, although there's plans for a virtual return, so keep an eye out on that. But, no, UNICEF is the world's largest agency focusing on child rights and well-being. We're a United Nations agency. We have offices in 191 countries, and we reach probably more children than any other organization in the world. We have strategic partnerships with governments, businesses, civil society and communities, and we currently have five strategic priorities, which focus on education, health, child protection, climate change and gender equality, so we're working with all kinds of stakeholders to ensure that child rights and well-being are promoted and upheld and integrated into every community and every country.

Michael Torrance: And, Tytti, how about Sustainalytics? I know of Sustainalytics from, you know, being a really world-leading ESG ratings company and all of the work that's done in that respect. Can you tell us about thematic research and what Sustainalytics does in this space?

Tytti Kaasinen: Sure, absolutely. Sustainalytics acquired GES last year, which is how I, myself, became part of the company. We now also offer engagement services like you said, which is not something that was part of the Sustainalytics repertoire before, but now it is, and all having the engagement services at Sustainalytics really become this one-stop shop where we leverage the data that we have from the research side and also our long engagement expertise from the GES days to really enable investors through active-ownership activities to become part of the solution and really through dialogs with companies encourage them to improve their proactive and reactive ESG risk and opportunity management, and in terms of thematic engagement specifically, what we do there is really try to identify topical material, business-relevant risks and also opportunities, which are at the same time global shared challenges where investors and companies alike should be and could be playing a role in contributing to better future, I guess. We have around 15 different areas where we have the engagement available at the moment within the thematic engagement service. That's a dynamic list, and we're always trying to respond to the new issues emerging in the world and also the investor needs and interests in different areas, and thematic engagements cover all the different areas across ES&G.

Michael Torrance: And so why focus on children in the context of responsible investment? I mean, we're quite familiar with risks of child labor, for example, and supply-chain issues, you know, but as we'll get into, your report goes much broader than that. What types of risks and impacts were you looking to try to target in this work?

Tytti Kaasinen: Yeah, so in terms of why we would look at children in the first place, I think what we were seeing earlier on in kind of around 2013 or so was that the way that this topic was covered in investment discourse or really was not really covered in the investment community besides child labor, had made it quite obvious that there was still consideration of children's rights, and that seemed like a blind spot, I thought, that we should try to do something about at GES at the time because I felt like no one else was, and it was something that luckily the company agreed that I could take on and pursue. The investor surveys that we had then carried out seemed to confirm that view, that the investors didn't have really much of that underway at the time, so from the investor perspective, I really think that it's a relevant topic to consider and incorporate. What our survey showed was that this was really a topic that was largely recognized as potentially material, but the problem was mainly that they weren't sure, what do children's rights exactly entail, and what is the link to business and financials? So in terms of your question about the risk, from the investor-risk perspective, I would say that there are maybe two specific things that are particularly important to note, and those would be that firstly children's rights is much more than just child labor and secondly that human-rights impact assessment and policies do not automatically cover children's rights, which is a common misconception really, so this means that many impacts and risks but also opportunities may be overlooked by investors, and for example, having zero tolerance to child labor while not necessarily even being helpful still leaves investors exposed to complicity to various other child-rights risks in their portfolios unless they carry out proper assessment, and at the same time, such narrow focus might make some of them to miss out on many positives and long-term opportunities that their relevant investors might be involved in. And on the point of human-rights assessments and expectations, which many investors do have, there are so many risks and impacts connected to children because of their position and their unique vulnerabilities that business and investment activities that might not have a huge negative impact on adults, which human rights impact assessment typically consider, both those carried out by companies but also investors, they can really affect children, so this is of course on a high level, these two kind of overarching risks, and in the guidance, we illustrate more concrete specific business risks and intersections with investments at companies, and I'm sure that Simon maybe has lots that he'd like to say about all these underappreciated factors as well.

Simon Chorley: The focus for UNICEF is pretty obvious, but just to back up what was being said there, I mean, children as we define it under the age of 18, they might make up only one in five of the population in high-income countries like Canada or the US, but they make up to one in three of the world's population and up to half of the population in low-income countries, for example, in Southern Africa or some parts of Southeast Asia, so they're a key stakeholder, and yet so often when we engage with business, we see that they're a neglected stakeholder, that they're not treated as a distinct stakeholder group with distinct rights, with distinct impacts that businesses may have on them but with also ... with a unique contribution to make to not just their community but to their country and the economy as well, and so that neglected stakeholder group can actually pose a real risk to businesses and therefore to investors if those full ramifications are not encapsulated and mitigated as part of a corporate response, so that was one of the many reasons why this was a great opportunity to work with someone like Sustainalytics and develop this kind of guidance.

Michael Torrance: So why look to the role of investors for a topic like this? I would assume that, you know, UNICEF, a lot of the dialog that you'd have on a topic like this would be in respect of public policy. So what was the unique opportunity that presented itself with investors?

Simon Chorley: For us as UNICEF, I think we really see investors as key not just because of the influence that they have directly but also the indirect influence that they have. We see ... As we talk to specific industries, we see that there are a couple of additional industries which can apply particular leverage. What we see is that if we want to reach a tipping point like we have, for example, with climate change and make this not just a nice add-on off the side of someone's desk but part of core business that we need to integrate child rights and well-being into the terms and conditions that project financing and leasing is provided with, and so that's one of the key reasons for us to look at investors. The other one is also around looking at the international norms and conventions that investors often use to guide the ESG governance and to decide what are most material. A lot of those refer to and are based off international frameworks like the Sustainable Development Goals, which of the 169 indicators, 35 explicitly rely on progress on children's rights off the ILO conventions 138 and 182 on child labor, on the OECD Guidelines and on the UN Guiding Principles on Business and Human Rights, and all of those require, the businesses, including investors, pay particular attention to children's rights, and yet when we talk to companies and investors, a lot of them are not aware of that particular requirement to pay attention specifically to children, and so this is a key opportunity for us, a real gap in the market to help flesh out the human-rights impact mitigation, prevention and communication strategies as part of their due-diligence commitments.

Tytti Kaasinen: From the invest perspective, children's rights slot in perfectly with so many key concepts such as universal ownership, responsible investment, long-term sim and many shared duties as well. Those are all issues that are quite inherently linked to ensuring that children are holistically appreciated and accounted for, and likewise as Simon referred to the SDGs as well, many investors are currently seeking to align their practices with the SDGs and that they should really know the framework's numerous links to children's rights, which Simon said, so if they are to do with something on SDGs, children should be at the core of it, and with engagement being my personal area of expertise, I obviously think that there is huge investor potential in that area as well, and I'm confident that this is a topic which businesses will be increasingly expected to demonstrate responsible behavior on, both by the public and policy makers as well, so investors would also benefit from assessing the exposure and proactively encouraging investing companies to stay ahead of the curve, and on this context, given the significant and long-reaching impacts on the development and also well-being of children that business can have, either for better or for worse, investors can really play an enormous role by engaging companies to adapt their practices and offerings to the needs of the child, not just to improve companies, but this also has the potential to influence what kind of consumers and digital citizens, for example, and ultimately future employees and decision makers, the companies that they invest with and will have in the future.

Michael Torrance: So let's maybe step back a little bit and talk about a definitional approach to children's rights. What are children's rights, and where do they come from, and how should businesses be thinking about what they mean?

Simon Chorley: Sure, so children's rights have always been around in some shape or form and have to some extent been codified ever since the Universal Declaration of Human Rights in 1948, but it was only in 1989 that we had a fully codified set of child rights under the UN Convention of the Rights of the Child. This is the most widely ratified human-rights treaty in the world. UNICEF is the only named organization in the convention, and in this convention, it sets out a comprehensive framework of 42 substantive rights that children have to address the specific vulnerabilities and entitlements, and this includes guiding principles around the right to non-discrimination, ensuring that the best interests of the child are always taken into account, the right to life, survival and development and also the respect for the views of the child so making sure that they can participate and that their voices are heard in decisions that affect them, which obviously has a clear ramification for business and investor stakeholder engagement. As I said, it defines a child as anyone under the age of 18, and it's really one of the key landmark treaties that we have which sets out child rights. Last year marked the 30th anniversary of the CRC, the convention, and we've seen some impressive gains for children over the past 3 decades. Together we've managed to half the mortality rate of children under 5. We've almost halved the proportion of children not getting enough of the right food to eat, and we've increased by nearly a third the proportion of the world's population that now have access to clean drinking water, but we still have huge challenges. You know, a quarter of a billion kids are still out of school. The poorest girls in many countries are more at risk of child marriage than they were 30 years ago, and, you know, as an increasingly materialist view for investors, climate change is disproportionately affecting children, and that has not yet been fully taken into account by the biggest contributors to climate change and something that we need to address. So we've seen great progress, but we also have great challenges ahead of us in terms of realizing child rights, and whereas before it used to just really be the view of governments, there's been an increasingly recognition firstly with the Millennium Development Goals and now with the SDGs. There is a key role for the private sector to play in realizing and supporting those rights, and that's something which UNICEF is, along with our partners, is helping to lead the way on.

Michael Torrance: You've developed a set of Children's Rights and Business Principles. Can you describe what the purpose of those are and what they say?

Simon Chorley: Yeah, the children's rights and business principles were really a response to the UN Guiding Principles on Business and Human Rights, and it came about with UNICEF working together with the UN Global Compact and Save the Children to identify, okay, so we have these Guiding Principles on Business and Human Rights, but what does this mean for kids? So we consulted with children, countries around the world and with businesses and with decision makers, and as a result, we launched the principles a year later in 2012. There's 10 of them. The first principle is an overarching one, which really kind of adapts the ready framework and looks at how businesses can integrate children's rights into their policy commitments, due-diligence procedures and grievance mechanisms. And then principles two to nine really identify the key material areas of impact across the workplace, the marketplace and the community, so in the workplace, there's obviously a focus on child labor, but it goes beyond that so focusing on decent work for young workers and parents and caregivers. Another principle looks at child protection and safety, whether it's online or physically in the workplace. In the marketplace, we're looking at, how are products and services developed and delivered to children? Is that done in the best interest of the child? And that's not just physical products and services for the financial sector. It could be also the financial services that they provide, you know, the terms and conditions they might place on children's financial or young people's financial products, for example, and another principle looks at marketing and advertising. Is marketing and advertising of the products appropriate and respectful of children's rights? So does it really look to maybe exploit children's vulnerability or a lack of maturity when it comes to decision-making? And then finally in the community space, looking at the environmental impact and the disproportionate impacts of businesses on children in relation to their health in the environment, also looking at security arrangements and when companies have to engage security personnel, whether it's government or private security. Is that implemented with the best interest of the children? And then also looking at emergencies and in supporting governments and how children are considered as part of that. So since the launch of the principles in 2012, we have been working with companies and governments around the world to begin to implement that through, you know, a standard set of tools and resources. We're then really working specifically with sectors on their specific material issues, impacts and ESG factors.

Michael Torrance: Yeah, no, that's fascinating. In terms of unpacking that intersection between children's rights and business, you know, we talked a little bit about the UN Guiding Principles on Business and Human Rights and the emphasis on the duty to respect human rights on the part of business and the due-diligence elements that that entails, and you deal with this in your report. What are some of the key areas of that linkage between children's rights and the business community?

Simon Chorley: The links are really going beyond child labor. I think, as we mentioned and has been referred to already, I mean, the latest estimates are that we have around 152 million children in child labor at the moment. You know, over 73 million of those are in hazardous work, which is particularly detrimental to their health and safety. You know, 25 million of those, again, are in forced labor within global supply chains, for example, and yet if we look at the UN Guiding Principles, there is a commitment not just for governments to protect children but also for companies to respect the rights of children and also that when their rights are violated that they have access to remedy. Those access-to-remedy-grievance mechanisms are accessible to children, and so as companies do their due diligence, as they identify that materialist use, as investors look at what is most material from an ESG perspective, it's really looking at not just the general impacts around child labor or health and safety but more the specific impacts as well that the sectors and the different companies may have, and that will vary from sector to sector, and the guidance goes into some detail as to what that might look like.

Tytti Kaasinen: Examples of how a company activities can intersect with children's right because many obvious things are nutritional value of the foods that they produce, for example, or a robustness of their privacy policies or just design of any of their products that children might come to touch and also things like relocations of the communities to clear the land for any big projects. That might negatively affect the right to education. Like Simon said, air pollution might be more harmful to children than adults, and things like employees' working conditions may have detrimental consequences to well-being of their families, so even if you just look at your employees, not children directly, that's something to be looked at as well. Marketing is another area. Any kind of marketing may affect children in unintended ways, and then there's the fact that one in 500 employees consumes child-sexual-abuse material on their work community, which should really give cause for companies in any industries to review the IT policies, including financials obviously. But what I think is also important when we talk about these intersections is that children shouldn't just be as risks and victims and passive recipients because companies can also play an instrumental role in empowering and educating children and supporting the fulfillment of their rights, not just avoiding doing any harm. This could actually lead to profit opportunities and a chance to build brand recognition and appreciation among children and their parents as well. This isn't something that everyone agrees or likes to think about it, but children are consumers, and through appropriate products and services which are marketed in a responsible manner, companies can actually both have a positive impact on childhood development but also tap into a lucrative market, and in terms of specific investor activities on areas other than children working, child labor, at Sustainalytics, we have developed a thematic engagement focused on children's rights in media, marketing, specifically to flag one area where companies face concrete risks but can also play an important role in empowering or protecting children, and another good example of expanding awareness of different child-rights issues is the advisory committee which is developing expectations for tech sector to combat child exploitation online where I'm involved, but the real credit for that work really goes to Tracey Rembert from Christian Brothers Investment Services for striving that initiative, so, yeah, I think that's really the key to really bear in mind, that it's just so much more than child labor.

Michael Torrance: And you've mentioned global supply chains. We just did another podcast on COVID response strategies and the risk that the focus on preserving global supply chains might come at the expense of considering human rights with respect to those supply chains. Can you elaborate a little bit more about what children's rights means in the supply-chain context that would be relevant particularly for consumers but also for retailers and other companies within that supply chain?

Simon Chorley: Yeah, for sure, and I think the COVID pandemic is throwing a spotlight on those exact issues that you mentioned. I think that too often when we look at global supply chains, we've taken a tier-one compliance approach, a checkbox exercise where we just verify that there is no child labor at direct supply level and then move on, but, you know, as we see the issues raised in response to the pandemic where workers are going without pay, where factories are being shut, where their health and safety is in jeopardy, what we often still forget is the impact that that has on the children. If we look, for example, at the garment sector, 70 percent of the workers in the garment industry tend to be women. They tend to be women with children, and so it's not just around child labor, but it's around things like, are they able to provide a living wage so that they can support their children at home? Are they ... Does that then enable them to provide children with the education that they need? Do they have access to the basic health services that they and their children need? Well, do they then have to work additional hours or take on secondary employment in order to meet those needs? If they are women working in their supply chains, do they have a supportive breastfeeding environment if they were to give birth? You know, are there those kind of rooms and facilities that they can make use of? Is there access to childcare? Is there access to water, sanitation and hygiene particularly if they want to manage their menstrual health during long work shifts, for example? Is there also looking at the environmental impacts of industry down the supply chains and the effect that that has on the host communities where those women and children are not just working but also living. So investors really need to have a broad understanding of in order to avoid blind spots and open them up to potential repercussions of not having identified and mitigated against those kinds of risks.

Michael Torrance: Let's turn now to the practical recommendations that you put forward and some of the conclusions that you drew out in your report. How do you think based on the research that you've done and looking at this question children's rights can be better integrated by businesses and investors?

Simon Chorley: I think, from UNICEF's perspective, we very much align with the UN Guiding Principles on Business and Human Rights, so from a general perspective, there are three key things that businesses can do. Firstly is around integrate child rights into their policy commitment, so having that tone from the top, having it signed off by the highest level authority in the company that, yes, we identify and recognize that children have specific rights and face specific risks and that as part of our overall sustainability strategy, we commit to respecting and supporting child rights and well-being across the organization, and that in turn will then, you know, send the signal to investors that this is a priority, that the company is on the forefront of emerging human-rights issues and trends. The second step is really around integrating into their due-diligence approaches, so looking at identifying, preventing, mitigating and communicating the risks that their business and investment decisions might have on children and child rights and well-being, and then thirdly is really around access to remedy so that if their rights are violated, making sure that businesses and investors do make grievance mechanisms and access to remedy accessible and responsive to children. So where in ... For example, in context where it's not appropriate for children to question people in positions of authority, or they might not be able to read or write or fill in a complaint form, it's taking those into account. By taking those three general steps, we're just beginning to see this now, for example, with some Canadian companies. That's beginning to show leadership on the child-rights issues and giving investors more confidence that these companies are really addressing all of their potential risks and impacts but also identifying where they can contribute positively to the societies that they're operating in.

Tytti Kaasinen: As for the investors, I'd maybe summarize it as being about integration, risk management and positive impact, and we have a section dedicated to the specific role of investors and include some specific action points there for investors to actually integrate in their operations, but if I just outline them briefly, the most obvious one maybe but something that's easily forgotten is aligning investors' own policies and processes to ensure that children that the employees have or interact with are considered so not just looking at what the investing companies have in place in this sense but also are making sure their own policies are family-friendly and make sure that no harm is done. Another thing is, of course, explicitly acknowledging children in the responsible investment policy. Probably that fits most naturally in connection to human-rights commitments, which many investors already incorporate in their policy statement. Another area is risk and impact assessment. That should also reflect children's rights considerations. Investors would really benefit from including specific children's rights indicators in their corporate-risk screening and also when they're evaluating the ESG risks and performance of specific companies or potential companies to invest in. More broadly as well, investors would be wise to identify companies and sectors and regions that are most at risk of children's rights breaches, and if they find some and if there are assets located in those areas, they should apply additional due diligence to make sure that they are going to be invested in before the investment is made. One other obvious measure is looking at what business the companies are in and accordingly avoiding companies that are detrimental to children's rights and seeking to invest in companies that respect and support children's rights either through responsible practices and/or through their products and services. Again, coming from the engagement background, I would like to give a shout-out to active ownership and advocacy, which can be a very powerful tool, and we'd really love to see investors systematically addressing children's rights in their efforts and where relevant discussing the topic in meetings with both potential investees and portfolio companies. Dialogs on this topic would really help investors evaluate companies' preparedness in terms of assessing and managing child-related risks and opportunities, but they will also serve the purpose of reminding companies of the importance that investors place on children's rights, and again, in the guidance documents, we include some specific suggesting questions that investors can just take with them into the meetings and apply where appropriate to the company in question. Another thing that I like to mention if using an external investment manager or by research or engagement services, investors should really request and ensure that their business partners consistently assess the risks and impacts related to children and reflect this in their offerings. It is a bit of a chicken-and-egg question because advanced methodologies and metrics on children's rights are largely yet to be developed, but investors creating such demand could really contribute over time to increase availability and quality of investor-relevant data on these issues, including the materiality aspect, which we think might be a deal-breaker for many investors. Finally, as always, there's power in numbers, and collaboration is often a very effective and impactful tool, so we would really recommend investors to raise the issue of children's rights in interactions with their peers in the investment community as well. Just discuss the challenges, the solutions that you've come up in response to the challenges, how to collaborate, what can be done and what can't be done to really try and find ways together.

Michael Torrance: You've just alluded to this, and one of the things I found most helpful about the report were the checklists and assessment tools that you developed. Are you able to tell us a little bit about those tools that companies can utilize in evaluating these types of risks and opportunities?

Tytti Kaasinen: Sure, so I can maybe start, so from the investors' perspective and in terms of fitting that into our guidance, the thinking behind the checklist was that investors have a very important role to play to influence corporate practices. They can set the expectations and raise awareness and improve standards among invested companies, and that's one great way to maybe put into practice the integration of children's rights. In a nutshell, we basically suggest that when investors start analyzing and engaging with companies, they should seek assurances that they have a risk-aware and responsible approach to children's rights, and where that's not the case, then investors should use their leverage to encourage companies to put such in place. To that end, we included in the guidance a selection of criteria and questions that can be used by investors in an active dialog or as a checklist to assessing companies, and the focus there is on issues that investors can use as proxies to determine the extent to which the investing companies adequately address children's rights. The questions fall on the categories including management strategy and corporate leadership, risk and impact assessment and management, transparency in reporting and external activities and stakeholder engagement, and more all these areas can be found in the guidance. In addition to those broad areas, we also included quite detailed appendices with industry-specific questions and indicators that will hopefully help investors assess the extent to which companies manage child-right risks in their supply chain as well as in relation to specific industry context and issues like information on communication technology, food marketing and the extractive sector, and Simon might want to elaborate more on those indicators, but really while the checklist was primarily intended for investors to use in their dialogs with companies, but, yeah, exactly, it's also something that companies can use against mapping their own practices against.

Michael Torrance: Yeah, Simon, it would be great if you could talk a little bit more about those indicators and just describe what they are and the different contexts that they've been developed for and also maybe why they were selected and what sort of research or background information you used in developing them.

Simon Chorley: Yeah, for sure. UNICEF's approach has been: Once we've developed general tools with key stakeholders, so for example, tool on policy commitments with, say, the children, a tool on impact assessments with the Danish Institute for Human Rights, which is a recognized leader in this field, and a tool on sustainability reporting along with the Global Reporting Initiative, or GRI, and how companies can integrate child reporting that way is then really, we had a look across global operations as to which industries we felt had the potential to impact child rights, both negatively and positively, the most, so once we had done that, we don't just want to develop something that people put on a shelf and then forget about. We want to develop it with the companies and the industries that will be using them, so that's where we went. That's how we gained traction. That's how we've worked in partnership with the private sector and with the support of government, I might add, as well, particularly here in Canada working alongside not just Canadian mining industry but also the government in Canada and ensuring that Canadian companies operating overseas fully respect and support child rights to the extent that they can. There's been a lot of support for that. Specifically for supply chains, I mean, beyond the general ones, which we've already talked about, there are specific indicators in the guidance, which can be adapted and replicated across different sectors and industries, but for example, you know, I'd already mentioned things like maternity protection, so what about the ... Do companies look at the length of maternity leave provided by a supplier? Do they take into account kind of the average earnings across maternity leave? You know, is there also the provision of paternity leave or more general parental leave? What are the health and safety protections for pregnant or nursing mothers, for example? What are the guarantees around non-discrimination if an employee is pregnant, for example? With breastfeeding support, again, yeah, making sure that they know that they're entitled to pay breastfeeding breaks. You know, in most countries, that is now a legal right, and yet there is very little awareness of that right, particularly in key economies like Bangladesh and Vietnam where some of the key garment sectors are. Is there adequate space for mothers to breastfeed? Is there adequate facilities to store breast milk, for example? Is there other issues around, like, for example, childcare, making sure that they have access to affordable childcare so that they can work? Those are just some of the indicators there, of some of the indicators which the guidance suggests for investors to look at when approaching supply chains' due diligence.

Michael Torrance: What other recommendations did you have for investors and companies with respect to that aspect of human rights?

Simon Chorley: I think there's ... We've related to the investor guidance, but separate from that as well, we've also just released a discussion paper around how you make corporational grievance mechanisms with the children, and for me, there are three key elements. The first is around accessibility so making sure that, yeah, if there are investors making sure that companies are making them accessible to kids, if a company is doing the right baseline assessments and making sure that they know, for example, the level of literacy in the host communities and basing any complaints procedure off that knowledge that they gain, so for example, we know Canadian companies who have made sure that, you know, they have equal numbers of women and men who are in their community-relations teams so that they have relationships with civil-society organizations who could act as informal grievance mechanisms, that they convey information in non-written forms, whether it's through radio broadcasts or through comic books, for example. There are lots of different ways. Secondly is around, did they make it responsive? So making sure that, you know, their grievance logs actually record that a grievance involves a child. So many companies I speak to, when I ask them, "So do you disaggregate by age in your grievance log?" and I haven't met any yet which have said, "Yes, we definitely do that," and so we've been working with several companies, and we have the first one, Canadian mining company and American Silver, who have now begun to do that and disaggregate by age and gender in terms of their grievance log where that's key in terms of how companies respond to grievances in the host communities, and that's something that investors really could be looking at and asking in terms of making sure that companies are taking these issues seriously. And thirdly is as well as being accessible and responsive is making them accountable, so how do you convey and follow up with vulnerable groups like women and children regarding their grievances without endangering them to the possibility of repercussions for the fact that they have raised an issue? So having those safeguarding procedures in mind there.

Michael Torrance: Well, it's such an important aspect of the social side of sustainability and human rights, but it's one, as we've pointed out, doesn't really get enough focus, so hopefully this does definitely trigger a renewed interest in this topic and really true integration of child rights in the broader scope of human rights. Thank you both for your time and participating in this podcast, and we look forward to seeing what you produce in the coming months and years.

Tytti Kaasinen: Thank you so much.

Simon Chorley: Thank you. All the best.

Michael Torrance: Thanks for listening to "Sustainability Leaders." This podcast is presented by BMO Financial Group. To access all the resources we discussed in today's episode and to see our other podcast, visit us at leaders. You can listen and subscribe free to our show on Apple Podcasts or your favorite podcast provider, and we'll greatly appreciate a rating and review and any feedback that you might have. Our show and resources are produced with support from BMO's marketing team and Puddle Creative. Until next time, I'm Michael Torrance. Have a great week.

Disclaimer: The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company, industry, strategy or security. This presentation may contain forward-looking statements. Investors are cautioned not to place undue reliance on such statements as actual results could vary. This presentation is for general-information purposes only and does not constitute investment, legal or tax advice and is not intended as an endorsement of any specific investment product or service. Individual investors should consult with an investment, tax and/or legal professional about their personal situation. Past performance is not indicative of future results.


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Michael Torrance Chief Sustainability Officer

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