Case study by Christian Brothers Investment Services
In the spirit of showcasing leadership and raising standards of responsible investment among all our signatories, we are pleased to publish case studies of all the winning and shortlisted entries for the PRI Awards 2020.
Give a brief overview of the initiative, its objectives, and why you decided to undertake it.
Christian Brothers Investment Services (CBIS) launched a multi-year project in 2016 to build a diverse coalition of investors and experts to convince Electronic Service Providers (ESPs) and related technology companies to better identify, disrupt and prevent child sexual grooming and abuse on the Internet. CBIS’s ultimate goal was to challenge tech companies to bring their best thinking to a problem that did not have enough attention focused on it —a problem that is almost doubling annually and is overwhelmingly connected to the ICT sector.
CBIS chose to focus on child sexual exploitation online (CSEO) because:
- It has a history of engaging on human and sex trafficking issues.
- Investors ranked CSEO as a top concern.
- CBIS has a history of engaging companies on children’s rights.
- ICT companies have become some of the firm’s largest holdings.
The initiative concentrated on several core strategies:
- Convincing companies to disclose their preventive measures against child pornography.
- Analysing company practices, child technology use trends, NGO expert recommendations, and law enforcement needs.
- Encouraging companies to focus on user education (for children, teens, caregivers and educators) about the risks of CSEO and solutions to prevent it.
- Educating investors on this threat, and how CSEO connects with the business models of ICT companies in their portfolios.
- Determining roles for investors and supporting legislation to prevent CSEO.
- Launching an Investor Expectations guide to benchmark leading and lagging performance against expectations and providing guidance for investors for their own stewardship involvement.
After months of interviewing companies, law enforcement agencies and issue experts, CBIS narrowed engagements to five key areas:
- Public disclosure and metrics around prevention/solutions/progress.
- Partnerships with NGOs, peers, trade associations and others to share lessons learned and share costs of new methods of prevention.
- Investments in new tools, including Artificial Intelligence and Machine Learning, to re-think how exploitation can be identified and shut down—including on end-to-end encrypted systems.
- Assessment of companies’ lobbying and regulatory efforts for increased risks to children from online exploitation.
- Company education on what CSEO is, how to recognise signs, and how to empower children to prevent it.
Describe how your project is aligned to Active Ownership 2.0, including:
a. The significance of the systemic, real world outcomes it seeks.
In 2019, there were 69.1 million images and videos of child sex abuse and exploitation reported to the US national hotline alone (National Center for Missing and Exploited Children, or NCMEC).
That number had doubled from 2017 to 2018, and again from 2018 to 2019. Child sexual exploitation over the Internet has increased by well over 10,000% since 2004.
And the number of children potentially impacted is surging too, as many children are now born as “digital natives” and one-third of Internet users globally are children. Add to that fact that over 800 million children are now on social media, and platforms like YouTube upload 500 hours of content every second—it was simple enough to show that many companies have built communications platforms with inadequate user safeguards, minimal content moderation, and unclear enforcement of company policies around what is not allowed.
The tougher challenge was to convince investors of the material financial impacts that can arise from not getting in top of this issue. An example was the advertising boycott that ensued at YouTube in 2019 after paedophile commentary was found under regular family videos and images of children.
Other trends CBIS could link to increased risks to children were some of the very technologies and innovations that many investors were anticipating:
- the Internet moving to 5G speeds
- the cost reductions in smart phones over time
- cheap and big data cloud storage
- and the move to encrypted apps and mobile devices with better cameras and video quality.
CBIS also recognised that, in addition to making progress on identifying and reducing child sex abuse online, companies could use related tools to address many other content ills—from live mass killings to cyber bullying and suicide videos, to terrorist recruitment of youth and other risks to children.
The COVID-19 pandemic then emerged, and further escalated many risks to children online from exploitation: 180 countries sent school children home and predators increasingly looked for children to connect with while many were unsupervised on their electronic devices.
b. The ambition, ingenuity or effort in the responsible investment tools/activities that were deployed.
CBIS used the following techniques as a way to better understand how child sexual exploitation was growing online:
- CBIS interviewed law enforcement and Intelligence officials in multiple countries. This included a day spent with the Chicago Police Department’s Child Cybercrimes Unit to understand how they identify child sex crimes and track down victims and offenders. It was found that reporting hotlines, social agencies and regional police are significantly under-resourced when it comes to investigating multi-country crimes.
- CBIS organised an Advisory Committee, of half investors and half child protection experts, to develop and draft the Investor Expectations document.
- CBIS spoke at a number of conferences and investor network meetings from 2017-2020, attended world summits with leading CSEO experts, organised webinars for PRI signatories and met with foundations funding this work.
- CBIS travelled to the UK to organise an Investor Briefing on the subject at the House of Lords. It invited NGOs, CSEO hotlines, institutional investors, and government officials to the meeting to share viewpoints and needs in protecting children and reporting cases of CSEO.
c. The challenges associated with this initiative (e.g. free rider issues hindering first movers) how these were overcome, and what was learned.
Investor squeamishness: some investors did not have the appetite to hear for very long about egregious sexual harms and crimes against children on the Internet.
Solution: CBIS warned audiences at the start of the process and used language and terms that could describe the risks without going into specific details.
Privacy and freedom of expression: The requests investors made of companies to prevent child exploitation online had consequences for privacy, freedom of expression, and the profiling of users.
Solution: CBIS worked with the Investor Alliance for Human Rights, the NGO and foundation community, and the UN to organise a series of talks and Roundtable meetings to work through these issues. That work is still in progress for 2020, as these initial meetings are being planned.
Lack of corporate disclosure on the issue: When CBIS began building a coalition on CSEO there was little company discussion or clear policies on child exploitation prevention, much less TCFD-like detailed reporting and analysis. CSEO was also an issue that no ESG data provider covered. And it was so specific that standardised metrics could not be found.
Solution: CBIS worked with companies and expert NGOs to create quantifiable metrics that focus on impacts rather than process. It asks companies to show how they have reduced the number of children at risk from exploitation, and they can measure that progress internally.
The fast growth of CSEO: The issue was growing so quickly and had such consequences for children over their entire lives that CBIS needed to encourage direct action, fast.
- Solution: CBIS asked companies to show not just how many moderators they had, or how much they donated to a group, but instead to show how the company had directly saved lives and stopped predators from reaching children in the first place. CBIS believe this approach has energised corporate staff into thinking about how they can make a tangible difference.
Outline the results, including evaluation of its success against the objectives; were there any adjustments to the forward agenda; were there any insights learned from this project that can be applied more broadly?
While CBIS has seen progress on several fronts, much work remains to build and mobilise a stronger coalition of investors. CBIS has built solid sources of data among subject matter experts and has a core Working Group of 50 investors across borders that are interested in acting.
CBIS is finalising the Investor Expectations guide and believes it will be useful in raising concerns with companies of different sizes. It will educate investors on new risks from their ICT holdings and it will draw attention to practices needed to protect children online.
CBIS saw progress from the companies it targeted between 2017 and 2020, including:
- Apple Corporation improved its App Developer guidelines, removed apps from its App Store, and reported companies to authorities, if the app was found to be facilitating trafficking or CSEO. Apple subsequently removed several apps because of this risk. In 2019, Apple revised user policies to indicate it was pre-scanning user materials to identify child sex abuse imagery.
- Facebook launched a CSEO video detection tool, sharing it with others for free. It announced a move to encrypted platforms and launched a multi-year plan to detect grooming and child sex abuse.
- YouTube announced restrictions on users’ abilities to post comments on children’s videos after some innocent family postings received millions of likes by paedophiles, driving users to specific images. YouTube removed hundreds of accounts for such abuses.
- Verizon and ATT agreed to implement child rights and risk impact assessments across their entire businesses. Both recently launched internal Online Safety Committees and now report to their boards on online safety and child exploitation issues. Both agreed to roll out user education to customers, including through retail stores.
Five further companies CBIS engaged now produce, or are finalising, metrics related to CSEO prevention. In addition, CBIS led training of UNICEF staff globally on shareholder engagement and how investors make the business case for reducing CSEO risks to children and companies.
In recent months, CBIS has engaged companies directly, and helped negotiate actions to enable child protection experts to join future dialogues. It has drafted and filed the first resolutions ever focused on the issue.