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Walt Disney, Ericsson Among Companies With Top Marks for Child Labour Risk Disclosure

Press Release 10 June 2011

Walt Disney, Ericsson and Hennes & Mauritz were among 9 out of 527 companies to get top marks for managing and reporting on the risks of child labour use and children’s rights violations in their operations and supply chains. Nearly half of the companies in the annual evaluation by NBIM, manager of the Norwegian Government Pension Fund Global, scored zero.

Intel, Motorola, Anglo American, Phillips-Van Heusen, Gildan Activewear and Xstrata were also among the companies to get full marks in NBIM’s third such annual assessment. The average score was 2.2 out of a maximum 10 points. A total of 232 companies had zero points.

“In the three years since we began examining how companies manage child labour risks, we’ve seen an increase in the number of businesses that address these issues,” said Anne Kvam, global head of ownership policy at NBIM. “However, the overall level of reporting on these issues is still far too low and companies need to step up efforts if the international community is to meet targets for eliminating hazardous child labour by 2016.”

NBIM is for the first time disclosing names of companies in its annual assessment in conjunction with the World Day Against Child Labour on 12 June. By naming those with the highest scores -- in the newly established annual NBIM Children’s Rights Disclosure Rating --  NBIM seeks to encourage other companies to follow suit. The International Labour Organization (ILO) estimates that about 115 million children worldwide are involved in hazardous work that is likely to harm their health, safety or morals.

“The use of child labour in companies’ operations and supply chains is of increasing concern to investors,” Kvam said. “By preventing children from getting an education or otherwise harming their rights, child labour holds back sustainable development and threatens investments in many parts of the world.”

As an investor in approximately 8,700 companies worldwide, NBIM expects companies to prevent the worst forms of child labour and promote children’s rights in their operations and supply chains. NBIM annually assesses the extent to which the companies it invests in meet its expectations, as outlined in the document NBIM Investor Expectations on Children’s Rights, and publishes the results in compliance reports. The evaluations are based entirely on the companies’ public reporting on these issues.

“The nine companies that got top marks in our latest evaluation have set high standards for themselves and others to follow,” Kvam said. “They address risk related to child labour and children’s rights in their operations and supply chains. They report on corporate action to prevent the worst forms of child labour, sustain a minimum age for labour and promote children’s rights. They also provide information on how children’s rights are governed at their company.”

NBIM’s 2010 children’s rights risk assessment:

The assessment looked at 527 companies NBIM was invested in at the end of 2010. These companies belonged to sectors with high exposure to risk related to children’s rights and child labour. The sectors were food and beverage, agriculture, apparel retail, technology hardware and equipment, steel, mining, and toys. NBIM looked at each company’s public disclosure of information in 2010 to determine how the company scored on ten criteria (indicators) for managing child labour and children’s rights risks. The results of the evaluation were first published in a compliance report in April 2011. The names of the companies with the highest scores were first disclosed on 10 June 2011 in the newly established annual NBIM Children’s Rights Disclosure Rating.

NBIM Children’s Rights Disclosure Rating
(lists companies with a top score of 10 points)

Company name 2010 Sector Score 2010
Motorola Inc 1) Technology hardware & equipment 10
Intel Corp. Technology hardware & equipment 10
Anglo American Plc Mining 10
Walt Disney Co. Toys 10
Phillips-Van Heusen Corp. Apparel retail 10
Gildan Activewear Inc Apparel retail 10
Xstrata Plc Mining 10
Hennes & Mauritz AB Apparel retail 10
Telefonaktiebolaget LM Ericsson Technology hardware & equipment 10
1) Motorola Inc separated into Motorola Mobility and Motorola Solutions on 4 January 2011.

 

Maximum score is 10 out of 10 indicators as presented below:

Indicators
Child labour policy
Child labour risk analysis
Preventive and corrective action plans for child labour
Supply chain management systems for child labour
Transparent performance reporting on child labour
Consultation and collaboration with stakeholders
Systems in place to prevent adverse effects of company actions on children’s welfare
Transparent governance structure for children's rights policies and programmes
Potential impact of social issues is integrated into strategic business planning
Transparent reporting that reflects concerns of long-term investors
 

 

Norges Bank Investment Management (NBIM) is the asset management arm of the Norwegian central bank. NBIM manages the Norwegian Government Pension Fund Global. The fund invests in international equity, fixed-income and real estate markets. It had a market value of approximately 3.1 trillion kroner on 9 June 2011. More information can be found on www.nbim.no.

For more information, please contact NBIM’s Global Head of Ownership Policy Anne Kvam Tel: +47 9712 1798. For more information on the World Day Against Child Labour, please go to: http://www.ilo.org/ipec/Informationresources/lang--en/WCMS_155246/index.htm