What dialogue achieves
At PUBLICA, we ensure that the pension assets entrusted to us are invested responsibly. That involves making our influence as an investor felt. In 2022, we achieved some initial successes on cocoa plantations: monitoring for child labour and taking remedial action; securing access to schooling; and ensuring people receive a living income.
The problem – and some solutions
Cocoa production is often associated with child labour, the main cause of which is widespread poverty. A large proportion of cocoa farmers do not earn enough to live on, and hiring adult workers is expensive. These are the two main reasons why many resort to using children. PUBLICA has been involved in a collaborative investor initiative led by Morningstar Sustainalytics. It conducted a three-year dialogue in three key areas with seven large companies that produce cocoa and chocolate, the aim being to combat child labour in Ghana and Côte d’Ivoire. Improvements have been achieved in all of the areas:
- The companies have made progress towards introducing systems to monitor and combat child labour in their direct cocoa supply chains in both countries.
- A large-scale programme of schooling was rolled out in 2022, with the aim of giving five million children in Côte d’Ivoire access to education. All seven cocoa and chocolate companies are involved.
- They are working with the cocoa farmers on measures to diversify and increase their income.
These are all good first steps. Now it is up to the companies to pursue them systematically and disclose the results and impacts they achieve.
More information on the measures in the cocoa plantations can be found in SVVK-ASIR’s engagement report.
Institutional investors communicating demands together
PUBLICA is a founder member of the Swiss Association for Responsible Investments (SVVK-ASIR) and is represented on its board. SVVK-ASIR’s members are eleven large Swiss institutional investors managing combined assets of around CHF 300 billion. The Association helps them take investment decisions that acknowledge their responsibility to the environment, society and the economy as a whole. SVVK-ASIR has teamed up with Morningstar Sustainalytics to communicate its demands to companies that produce cocoa or manufacture chocolate. Morningstar Sustainalytics is a leading ESG research, rating and data company that assists investors around the world in developing and implementing responsible investment strategies.