Council on Ethics’ Sweet Success on Child Labour

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    Stockholm (NordSIP) – The Council on Ethics of the Swedish National Pension funds (the Council) chose today, 12th June 2023, the UN-sponsored World Day Against Child Labour to highlight some of its efforts at address problems that area.  In 2019 the Council embarked on a 3-year project targeting problems identified within the West African cocoa supply chain.

    The Council had decided to tackle the problem of the estimated 1.5 million children working in the cocoa industry in the Ivory Coast and Ghana, two nations that account for almost 70% of global cocoa production.  One of the route causes of the prevalence of child labour in cocoa is the complex supply chain involving multiple intermediaries, all of whom need to turn a profit.  This leaves the bean farmers with extremely low incomes, which often compels them to employ their children in order to make a basic living.  As a result, children are taken out of the education system, and those younger people that can move to the city do so as they no future in cocoa farming.

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    The Council on Ethics sought to engage with cocoa and chocolate producers with the aim of expanding the use of expansion of Child Labour Monitoring and Remediation Systems (CLMRS), improving access to education and improving cocoa farmers’ income levels.  Although there remains much work to be done following the completion of the 3-year engagement effort, the Council has been able to report measurable improvements in school attendance and reductions in child labour use in the focus areas.  The Council collaborated with other institutional investors on a programme of meetings with cocoa producers to steer them towards greater efforts to guarantee living wages for farmers and combat child labour head-on.   The cocoa companies’ achievement of defined key performance indicators (KPIs) improved from 43% in 2019 to 70% in 2022.

    The tangible results from the initiative include extended CLMRS coverage, which will be further improved under the World Cocoa Foundation’s (WCF) commitment to widespread CLMRS use by 2025.  Encouraged by the Council on Ethics and other like-minded investors, individual companies have taken initiatives to support the building of schools along with the administrative and logistical support to help children return to full-time education.  These efforts have been accompanied by the introduction of more transparent reporting by the cocoa industry on all aspects of their supply chains.  While some of the root causes of the problem of child labour in the West African cocoa industry remain difficult to eradicate, the Council on Ethics’ engagement programme illustrates the positive results that can be achieved by the sheer weight of shareholder influence that comes with large investment portfolios.

    Image courtesy of Security from Pixabay
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