Leading asset owners and fund managers are backing a new investor expectations document on child labour in the cocoa industry.
Their of statement of support is available here.
Sixty institutional investors, coordinated by ESG engagement firm GES, are “strongly” encouraging the cocoa industry to look at its practices in the west African countries Côte d’Ivoire and Ghana. The region produces around 70% of the world’s cocoa and has an estimated 2m child labourers working in the industry.
The expectations – which are also laid out in GES’ recent report Combatting Child Labour in Cocoa, Investor Expectations and Corporate Good Practice – are “formulated with the aim to both identify and remediate in a sustainable manner cases of child labour as well as address poverty, the underlying root cause of child labour in the cocoa industry”.
Signatories to the statement of support include: APG, Actiam, AustralianSuper, Christian Super, AP1, AP2, AP3, AP4, Church of Sweden, Macif Group, Ohman, PBU, and Mercy Investment Services.
The statement highlights the numerous international norms that child labour practices violate, including Sustainable Development Goal eight (SDG8) on decent work and economic growth, which urges the “elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms”.
It also refers to the UN Global Compact’s Principle 5: “The effective abolition of child labour points to the responsibility of the private sector to respect children’s rights.”Three specific expectations for cocoa companies have been proposed in the statement:
• Produce a detailed plan, including timeline, on how child labour identification and remediation systems will be rolled out to farms in Côte d’Ivoire and Ghana by 2020
• Demonstrate progress towards a living income for farmers
• Report to what extent current income levels match a living income for cocoa-growing farmers in the two countries.
Of the seven world-leading cocoa companies benchmarked by GES, US confectionery giant Hershey’s was identified as the lowest ranked company.
Investors are warned of the reputational risks of being involved with companies linked to child labour and other violations. It states: “When violations to international norms are identified, investors expect companies to proactively adopt swift measures to address such situations.”
In other asset owner news, NZ Super Fund, the NZ$36bn superannuation fund, has announced its first offshore farm investment – part of the fund’s rural land strategy – by taking a stake in leading Australian beef stud Palgrove. The investment takes its rural land portfolio to 33 farms worth approximately NZ$340m.