Erste Asset Management

When children work… (Editorial)

When children work… (Editorial)
When children work… (Editorial)
Share post:

June has Children’s Day, World Day Against Child Labour, and the Day of The African Child coming up. These commemoration days form an arc that covers the topic of child labour quite well. The overarching theme is the well-being of children, which is also reflected in the definition of child labour. Child labour robs children of their childhood, potential, and dignity and harms them physically and mentally. In Austria, it is an absolute no-go. However, in poorer parts of the world, child labour is clearly a big problem.

Poverty is the root cause of child labour. This explains why child labour is largely regarded as exterminated in the wealthy industrialised countries, whereas it still exists in the poor countries of the “South”. From an ESG perspective and in terms of asset management, this means two things: on the one hand child labour is an issue mainly for investments in emerging markets, but on the other hand it is also relevant for us due to global interconnectedness and the increasing degree of integration in many production processes. And it is this interconnectedness that we as ESG investors have to analyse.

Child labour is a problem that does not affect all sectors equally. In the financial sector, a seven-year old child will not be useful. This explains why according to the International Labour Organization (ILO) children mainly work in the agricultural sector, in tourism, in the textile industry as well as in quarries, as street vendors, and house helps. The most extreme cases occur in child prostitution and as child soldiers.

These examples show that child labour affects both countries and companies. Companies actively employ children, and countries (i.e. governments) are partially to blame for their passivity when it comes to enforcing laws that protect children. Therefore, child labour is a criterion of exclusion for us, both in the corporate sector and on a governmental level.

The topic of child labour does of course come with clearly negative connotations. Nobody wants to promote child labour through their consumer or investment behaviour. That being said, child labour is subject to controversial discussion. Critics claim that child labour is not sufficiently looked at from the affected children’s point of view nor from the national environment. There are different definitions of regarding the age when child labour turns into ordinary labour as well as of whether a certain kind of work is exploitative child labour or not. At Erste Asset Management, we are aware of the different arguments and decided to go with the more stringent ILO definition of child labour

As pointed out at the beginning, child labour needs to be seen above all in connection with poverty. Therefore, the fight against poverty and the achievement of a safe economic future is the best tool against child labour. For this reason, our micro finance fund is an effective building block in the fight against child labour. Fighting poverty also means fighting child labour. We invite us to join our fight.



Legal disclaimer

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011. The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the web site within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the web site A summary of investor rights is available in German and English on the website as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to § 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.