Moving Beyond Child Labor: Faith Investors Must Pay Greater Attention to Impacts on Children from Our Market Decisions

(Above – Julie Tanner at the Vatican attending the Address of his Holiness Pope Francis during The Congress on Child Dignity in the Digital World that was held in November 2019.)

Faith investors have long engaged companies and governments on exploitative practices involving child labor. They have also weighed in on negative infant formula marketing, violent video games, and obesity impacts from junk food over the past four decades. In fact, faith investors are typically the first shareowners to flag negative business impacts on children.

However, children are increasingly affected by corporate practices extending far beyond labor and other traditional focus issues. It is critical for faith investors to take the lead in highlighting the full range of harms facing young people, and build broad coalitions to work with companies and governments to advance children’s rights.

At Christian Brothers Investment Services (CBIS), we have focused on protecting children from sexual exploitation online since 2016. Our work on this issue has revealed a larger problem: Too often, children are not considered in corporate dialogues on human rights, or the due diligence companies conduct before launching a product or service. We hope that by working together, investors can help change that dynamic.

When CBIS became the first investor to engage tech, social media, and telecom companies on child sexual exploitation four years ago, few businesses were discussing this growing threat. We drew inspiration from Pope Francis’ sense of urgency on the issue, and Catholic social doctrine that implores us “to engage in a battle… against the violations of the dignity of [children] caused by sexual exploitation.”

At the time, there wasn’t much research to make an investment case for change. We were driven by a moral conviction that Information and Communication Technology (ICT) companies needed to tackle the escalating spread of child sex abuse material online. When we surveyed our Catholic investors on 40 issues related to human dignity, economic justice and environmental stewardship, child sexual exploitation online emerged as a top concern.

In 2017, CBIS conducted interviews and learning sessions to a broad range of experts on preventing child exploitation. We also began working with child welfare advocates to refine our requests of ICT companies. In addition, CBIS performed due diligence on U.S. and international legal frameworks that compel or prevent companies from taking appropriate action. We discovered that U.S. law compels several types of ICT companies to report child sex abuse content when found, but not to actively seek it out. With that revelation, we knew we needed to raise awareness among fellow investors and build alliances to amass enough influence to convince companies to rethink their core strategies.

Today, CBIS is part of a growing coalition of investors pressuring them to do more to protect children online from sexual harm and broader exploitation. In collaboration with issue experts, we seek to convince ICT companies to improve their practices to more effectively identify, disrupt, and prevent child sexual grooming and abuse on the internet.

Our work focuses not only on eliminating certain activity, but addressing the fact that the entire ecosystem around internet technology is not “fit for purpose” to keep children safe. We now ask companies to assess child rights and risks across their enterprises to truly evaluate their impacts on their most vulnerable stakeholders. We have also raised the issue of “safety by design,” asking ICT companies to consider user and child safety at the start of the process of designing a new device, service, or app.

Beyond moral arguments, we now know there is a strong investment case for these engagements. ICT companies are now widely held components of many investor portfolios. However, without effective practices to protect children from sexual exploitation online, they face brand, reputational, and legal risks. Companies may also feel direct financial consequences in the form of advertiser boycotts. In fact, in addition to engaging the ICT sector, CBIS seeks to exert indirect influence by educating online advertisers to push for higher child safety standards when deciding where to spend their marketing dollars. CBIS has also encouraged data plan and device sellers to ask device makers to consider child protection during the design process.

Since beginning our work with ICT companies, CBIS has seen progress on multiple fronts:

• Apple Corporation implemented a policy in 2017 of removing apps from its App Store, and reporting the companies to authorities, if they are found facilitating human trafficking or child sex abuse. In 2019, Apple revised its user policies to indicate it was pre-scanning user materials in the iCloud to identify child sex abuse imagery.
• Facebook has launched a child sexual exploitation video detection tool. After plans for more widespread encryption drew concern from observers, Facebook launched a multi-year plan to detect grooming and child sex abuse through metadata analysis of user information and other tools.
• Alphabet platform YouTube announced new restrictions on users’ abilities to post comments after family videos received unwanted attention from pedophiles. YouTube also removed hundreds of accounts over these incidents in 2019.
• Verizon and AT&T agreed to conduct a child rights and risk impact assessment across their businesses in 2020. Both also recently launched internal Online Safety Committees, and now report to their boards on online safety and child exploitation issues.
• Six of the companies CBIS has engaged have committed to reporting metrics around preventing child sexual exploitation online. All companies we have engaged thus far increased their involvement in initiatives such as child protection groups, abuse reporting hotlines, improved detection tools, and awareness-building campaigns.

In 2019, Pope Francis proclaimed that investors and asset managers must hold ICT companies accountable for eradicating child sex abuse activity from their platforms and products. Now more than ever, investors must galvanize to heed this call to action—and fulfill the the U.N. Sustainable Development Goals to drive down violence and exploitation facing children worldwide.

Together, we must demand better performance and disclosure from companies, identify leading practices, and help spur industrywide cooperation on child protection. With 800,000 children going online for the very first time every day, we are called upon to take responsibility for our investments in the ICT sector by calling for an internet that works for children.

 

Article by Julie B. Tanner, Managing Director – Catholic Responsible Investments ^SM, Christian Bros Investment Services

Ms. Tanner leads the development and implementation of CBIS’ Catholic Responsible Investments ^SM Program and oversees a team responsible for Catholic investment screening, engagement and proxy voting activities. In addition, she crafts substantive agreements and strategic initiatives with boards and senior management in order to positively influence corporations and their impact on society. She is a member of the governing board of the Interfaith Center on Corporate Responsibility (ICCR) and is a member representative of Partners For The Common Good, which provides critical financial products and services to low-income people and communities.

Prior to joining CBIS in 2002, Ms. Tanner spent ten years in the financial services industry, most recently with JPMorgan Chase, before moving to lead the Finance and Environment Program at National Wildlife Federation. Ms. Tanner holds a B.A. from Rutgers University, an M.B.A. from Pace University, and an M.S. from North Carolina State University.

 

The securities identified and described do not represent all of the securities purchased, sold or recommended for CUIT Funds, CBIS Global Funds and separate managed accounts. For a complete list of securities please contact CBIS. The reader should not assume that an investment in the securities identified was or will be profitable.