Child sexual exploitation online – a growing risk for the technology sector

The first shareholder resolution on child sexual exploitation online will go to a vote today (May 2) at Verizon Communications’s AGM in Orlando, Florida.
Shareholders are requesting that the Board of Directors issue a report on the potential sexual exploitation of children through the company’s products and services, including a risk evaluation, at reasonable expense and excluding proprietary or confidential information, by March 2020, assessing whether the company’s oversight, policies and practices are sufficient to prevent material impacts to the company’s brand reputation, product demand or social license.
It is 1 of 3 resolutions filed so far. CBIS filed at Apple last August and withdrew after the company committed to some progress and metrics on the topic. A resolution at Sprint Corp. is going to a vote in August. The company hasn’t responded.
Investors are also rolling out expectations for the ICT sector in confronting this issue, and that guidance will likely launch in August. Recently, Thorn, an NGO based in California, gave a TED Talk on the issue highlighting new data on the trend.
Last year, the US major hotline for reporting child exploitation online (NCMEC) received over 45 million reports of child sex images and videos. That number was double what came in in 2017. Almost all of those reports came from just 12 companies. It is pretty clear that while this is a growing societal concern, this is also a growing tech concern. The technologies that fuel the growth of ICT companies are the very ones that are fuelling a massive escalation in child sex crimes online.
A PRI webinar on the topic took place on April 2.
While Information and Communications Technology (ICT) companies are now widely-held components of many investor portfolios, they are also at the center of an escalating trend in children being sexually exploited and abused online. The technology used in sex crimes against children is ubiquitous, from smartphones to gaming consoles, apps, text messaging, social media sites, cloud storage and more. And yet, ICT companies rarely disclose how they are combating these growing risks, from identifying and blocking child sex images to investing in new solutions to stay ahead of the abusers. In 2017, Christian Brothers Investment Services (CBIS) began working with child welfare advocates to better hold companies accountable, calling for actions to find and disrupt such exploitation – within the confines of the law and consumer privacy rights. U.S.law compels several types of ICT companies to report child sex abuse content when found, but it doesn’t compel companies to actively look for it. Now CBIS is being joined by other investors to raise this issue, including Robeco, the Dutch fund manager, and PBU, the Danish pension fund. Sustainalytics and 7th Generation Interfaith are helping draft the expectations. The UK is proposing legislation on harmful content online (including child sex material). The UK Home Secretary says he will crack down on the ICT sector heavily if they don’t do far more to stop child sex abuse material. New Zealand has launched a collaborative engagement with social media companies on harmful content within the PRI network.How Big Is the Problem? Interpol reported about 4,000 unique child sex abuse images worldwide in 1995, but the U.N. Office of Drugs and Crime now estimates at least 50,000 new such images appear online each year. Additionally:

• The Internet Watch Foundation noted that 55% of child sex imagery reported to it in 2017 was of children 10 or younger, and that domain names showing children being sexually abused jumped by 57% from 2016 to 2017;
• The National Center for Missing and Exploited Children has sent over 160,000notices to electronic service providers regarding public web pages where suspected abuse images appeared.
• According to nonprofit Thorn, 75% of sex-trafficked minors are now advertised online.

What Can Investors Do? CBIS has organized child protection experts and investors from five countries to developTech Expectations for Combating Child Sex Exploitation Online. That guidance will be released in 2019 and used to benchmark ICT companies globally on their performance and policies to protect children online from sexual harm, and to identify leading practices that other investors can use in engagements with their technology holdings. We are asking companies to commit to:

• Robust policies in “Terms of Service” (user) agreements for customers, software developers, and third-parties, with clear discussion of monitoring and enforcement of those terms, and how users can report child exploitation online.
• Stronger relationships with child protection advocates, to understand and keep up with trends and risks.
• Online Safety Teams, in-house, where Team Members actively monitor their systems, products, and business model for illegal/endangering content, and figure out how to innovate to stay ahead of the growing risks.
• Software or tools to identify, track or halt abusive imagery.
• Stronger content/parental controls and shifting that burden from parents-only, to shared obligations between companies who know the technology and caregivers tasked with keeping up.
• User education, social media, and training for parents, children and educators on online risks and best practices in protecting children from online harm.

Tracey C. Rembert, is Director of Catholic Responsible Investing, Christian Brothers Investment Services, Inc. (CBIS)