Driving social change through investment

Right now, there are about 40,000 children living in the Congo, digging for cobalt using machetes and their bare hands. They’ve never been to school. They are digging for the cobalt that’s used to make our smart phones and electric cars. Each child makes about $2 a day.¹

It is no longer okay to rationalise that child labour is an acceptable part of third world economies. The UK outlawed child labour 184 years ago. The United States did the same 80 years ago. Why should it be accepted in poorer nations today?

Percentage of children aged 5-17 engaged in child labour by region

https://data.unicef.org/topic/child-protection/child-labour/

The role of business

Some global businesses like AMP Capital believe there is a role for large corporates to play in helping outlaw child slavery.

It’s not just about doing the right thing. There’s an economic reason for it as well. A business model that relies on underpaid workers or does not account for its true environmental or social cost will not be sustainable in the long term.

Most ethical investors have a list of industries they don’t invest in. For example, AMP Capital’s responsible investment funds don’t invest in tobacco, alcohol, gambling, weapons, the dirtiest of the fossil fuels, nuclear power, factory farming or animal cruelty. But ethical investing is much more than excluding a list of unpalatable sectors.

It’s about tracking the behaviour of companies – sometimes well-known and highly-reputable companies – and calling them to account when needed.

Making change

In 2006, one of AMP Capital’s fund managers discovered that a global car manufacturer was using slave labour in its supply chain and started lobbying for change. The US government started investigating. The company’s behaviour changed.

In 2011 some of my colleagues travelled to Bangladesh and saw the human rights abuses in factories that some Australian companies were using to make clothes. We brought the issue to the attention of the investment community and called for change. We now have a Modern Slavery Act, forcing Australian companies to understand where they are buying from and how the workers in those factories are treated.

And in 2014, we turned our attention to payday lenders. We’ve seen examples where their lending practices result in vulnerable people becoming trapped in spiralling debt. We asked the banks that were funding the sector to stop. They did. It made a difference.

We are still striving to make changes. The things we’re focussing on right now include:

• Pressuring companies to pay a living wage to factory workers all over the world.
• Tackling child labour in the cocoa industry where two million children are estimated to work every day.
• Examining the working conditions of people building mobile phones, particularly their exposure to toxic materials.

Companies like AMP Capital have a chance to make a real difference. And a responsibility to work hard to make people’s lives better.

¹ Amnesty International, Democratic Republic of Congo: ‘This is what we die for’: human rights abuses in the Democratic Republic of Congo power the global trade in cobalt, January 2016