The legal and PR risk boardrooms need to tackle
The legal and PR risk boardrooms need to tackle
HACE helps corporations remove child labour from their supply chains
Hello there,
‘Tech for good’ makes for a great story, but it doesn’t always attract a great amount of investment. Today’s startup should perhaps be different.
They’re tackling one of the great global injustices in a way designed to appeal to the boardrooms of the world’s biggest companies. Scroll down to read all about HACE.
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HACE helps corporations remove child labour from their supply chains
27 years ago, Nike became embroiled in what turned into a long-running child labour scandal that has blighted the brand ever since.
Having child labour in supply chains is not only morally wrong, it’s a business risk with real legal and reputational repercussions. And it’s a growing problem. A 2021 report pegged the number of children involved globally at 160 million, an increase of 8.4 million over the previous four years.
It’s not even a problem limited only to developing countries. Hyundai and Kia were recently found to have children working in their supply chain in Alabama, USA.
HACE wants to help businesses navigate this problem and eradicate child labour.
How HACE tackles child labour
The startup has two different offerings. Its first is Athlum, which uses A.I. data analysis to identify child labour that might otherwise go unnoticed.
“70% of child labour is in agriculture, which is often where companies don't have any visibility in the supply chain,” says founder Eleanor Harry.
“Companies’ audit teams walk into a factory and they don’t see any child labour. If they walked a mile down the road into a field, that’s where they'd find it.
“But they don't have that level of visibility into those communities to be able to see what's driving that behaviour and therefore it causes massive risk, because then it's printed in the Guardian that they had this child labour, and genuinely sometimes they actually don't know.”
Harry says HACE combines quantitative, qualitative, and satellite data at a country, regional, and local level with data from the companies they work with to identify risks and solutions. She gives an example of a company the startup worked.
“With our data, what we saw was that there was a huge correlation between lack of access to safe water and child labour. And only 60% of that population had access to water. if they really want to make a difference, they can optimise that spend on what people actually need.”
HACE’s other offering is a Child Labour Index. Currently in development, it will generate a quantitative score for companies’ relationship with child labour. Pitched as an environmental, social, and governance (ESG) product, the index is targeted at financial institutions who want to understand how their portfolio of investments is exposed to child labour.
Harry says the index is built around the idea that shareholder pressure is a powerful influence on companies’ actions.
And even if companies don’t care about doing the right thing or their public reputation, a growing number of laws and regulations are emerging to keep them in check. These include the Dutch Child Labor Due Diligence act, German Supply-Chain Law, and the EU’s Sustainable Finance Disclosure Regulation. These laws can impose serious penalties on companies found in breach.
Background
Manchester-based Harry founded HACE in February 2020, rallying volunteers to help get the startup off the ground. By the summer of 2021, she says they had landed their first revenue-generating customer - a FTSE top 10 company.
“You dream of the days where you're going to get your first client, and you never ever expect to be that size of client. They approached us, because there's no-one else that specialises in this area, in the world, which is really sad actually.”
Since then, HACE taken on more customers, further developed Athlum, and begun work on the Child Labour Index, with the aim of launching it in September this year.
A solo founder, Harry was first exposed to the scale of the problem of child labour when she worked for an NGO, and she spent a few years working with teams tackling the problem in countries like Bangladesh and Uzbekistan.
“I had a bit of a lightbulb moment in 2019. I was frustrated that the child labour landscape had never really changed. It was a problem that was still so prevalent and no-one was really talking about it.
“We should be solving the world's biggest problems with technology, because we actually changed the entire world with tech, so we know how to do it… And I knew that we could achieve scale with tech.
“When you put child labour and technology together, it seems really weird. But it's possible to affect change at scale with technology.”
Not coming from a tech background, Harry went into the tech world blind to the realities of the industry. She says she now wishes she had begun with a co-founder. “And I wish it was a man. It’s so it's much easier when it is,” she says in a bleak assessment of how much progress is still needed.
That said, Harry has been joined for most of the journey by a head of data as the other full-time member of the team.
A lot of the product development has been done with subcontractors and academic partnerships, which she says means they currently have 16 university students working with them and they sponsor a PhD.
HACE has also received support for programmes like Greater Manchester AI Foundry and Exchange.
Go deeper on HACE
Lots more information about their investment, vision, competition, and challenges
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