The concept and perception of Child Labour can vary based on geography, culture, national legislation, or personal opinion. However, the International Labour Organisation (ILO) has developed a standard definition that can be applied globally which HACE adheres to. According to the ILO Convention 182 (1973):

“The term “Child Labour” is often defined as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development. It refers to work that: is mentally, physically, socially or morally dangerous and harmful to children; and/or interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work.”

See our blog post on the definition of Child Labour for more information.

Modern Slavery, as defined by the International Labour Organization, Walk Free and the International Organization for Migration (IOM) encompasses two types of exploitation (for the purposes of global estimates); Forced Labour and Forced Marriage. In 2022, there were an estimated total of 49.6 million people in Modern Slavery, with 27.6 million in Forced Labour and 22 million in Forced Marriage.

Of the 27.6 million people in Forced Labour, the ILO estimates that 3.3 million are children (see Page 17 of ILO Global Estimates of Modern Slavery). These children are defined as 'forced labour of children', a subset of Modern Slavery. However, these 3.3 million children are not the only children trapped in exploitative labour conditions.

Other forms of exploitative Child Labour exist and are extensive, with 79 million children in ‘Hazardous Work’, considered one of the Worst Forms of Child Labour. Based on these global definitions, the overlap between Child Labour and Modern Slavery includes the 3.3 million children classified as ‘forced labour of children’, meaning there are a further 156.7 million children classified under ‘Child Labour’ who are not categorised as being in ‘Modern Slavery’.

• The Worst Forms of Child Labour are classified as Child Labour, not Modern Slavery.

• According to ILO Convention 182, the four Worst Forms of Child Labour (WFCL) are:

a) All forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict;

b) The use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances;

c) The use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties;

d) Work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children.

• WFCL (a) is also classified under Modern Slavery

• WFCL (b), (c and (d) are not classified under Modern Slavery

• WFCL (d) is commonly known as Hazardous Work - in which 79 million children are classified

There are 160 million children in Child Labour aged between 5-17, which equates to 1 in 10 children globally. Examples of how Child Labour can manifest are below:

1. In Country X, the minimum age for work is 13. A 15-year-old child is spraying pesticides on a family tobacco farm with no Personal Protective Equipment (PPE). Although the child is over the minimum working age and not in Forced Labour, they are performing hazardous work and therefore this case is categorised as Child Labour, not Modern Slavery.

2. In Country X, the minimum age for work is 13. An 8-year-old child works 35 hours a week on a family cotton farm watering crops. Although the child is not performing hazardous tasks and is not in Forced Labour they are under the minimum age of work, and therefore this case is classified Child Labour, not Modern Slavery.

Companies are scored across 3 performance metrics:

1. Company Disclosure: Evaluates how well companies acknowledge, report, process, act on and remediate Child Labour in their supply chains

2. Public Perception: Assesses how the general public and potential customers view a company’s association with Child Labour

3. Supply Chain: Measures the robustness of a company's supply chain against Child Labour, based on their GICS sub-industry and commodity exposure

The Index utilises publicly available data points and proprietary HACE data sets built with our social science expertise.

We recognise that publicly available data does not always give the most accurate picture of how companies perform in ESG. However, by employing technology and AI and generating three distinct scores we can build deeper insights and relationships. This approach enhances transparency regarding what companies claim to be doing, how they are perceived to behave and how exposed their supply chains are to the risk of child labour.

HACE leverages technology to develop objective, rules-based algorithms that incorporate Child Labour expertise at their core. Using technology allows us to scale the Index quickly, safely, and accurately, with the capability to update scores every 24 hours, providing refreshed company data. Our use of knowledge graph technology ensures our methodology is fully transparent, enabling us to trace each score and each piece of data back to the original source that was associated with that company. This approach eliminates human bias in scoring, while still integrating HACE expertise into the algorithms.

While the Index is powered by various forms of technology and use of Artificial Intelligence, we also employ Human-in-the-Loop (HITL) processes throughout our scoring algorithms. These verification mechanisms are carried out by HACE subject matter experts to verify output from any technological or AI-generated outputs.

We do not yet score private companies, however HACE provides portfolio asset-level consulting services for private equity and infrastructure General Partners (GPs).

Yes, HACE is a private company. The Founder, Executive Team and Board are all investors in HACE, ensuring appropriate long-term alignment with the business.

While the nature of our work might suggest a charitable approach, operating as a commercial entity allows us to secure private funding necessary to develop and maintain our technology, engage industry experts and conduct essential research. This funding model requires a return on investment, which enables us to effectively perform our mission of eradicating Child Labour in global supply chains.