Guest commentary by Sjoerd Rozing, Portfolio Manager at Triodos Investment Management (IM).
Today's children are tomorrow's workforce, consumers, and decision-makers—they are the future of our society. Despite this, they are not considered as a distinct group in most investment frameworks and financial decision-making processes.
The „Child-Lens Investing Framework,“ introduced two years ago, has gained traction across the sustainable finance ecosystem, and UNICEF’s Child-Lens Investing Framework was named one of the best inventions of 2024. So, what if the industry saw itself not just as a manager of capital, but as a manager of the future?
The idea is not merely an abstract example, but rather a framework for how capital can be deployed in a targeted manner with measurable impact, particularly in a time of rising systemic risks and increasing social inequality. The concept of investing from a child's perspective recognizes children as key stakeholders in financial decisions and ensures that their rights and well-being are actively considered. It is based on a simple yet transformative idea: investing in children generates not only social value, but also long-term societal and financial value. Because every investor has unique guidelines, preferences, and constraints, there are different approaches to investing from a child's perspective. This provides investors with flexibility in application while also ensuring alignment with different strategies and risk profiles. As investors, we have both the opportunity and the responsibility to think beyond short-term return cycles and align our strategies for long-term resilience.
The investment argument for a child-centered approach
Applying a child-centric approach to investments is not only a matter of social responsibility but also makes sound financial sense. Investing in child-centric areas such as nutrition, healthcare, education, and infrastructure means investing in essential services. This focus can lead to a resilient and diversified portfolio that is less vulnerable to short-term macroeconomic fluctuations. This is also reflected in Triodos IM's Future Generations strategy, which is based on both the long-term UN Sustainable Development Goals (SDGs) and immediate needs, and is aligned with the objectives of UNICEF's strategic plan. Furthermore, applying a child-centric approach results in a portfolio with diverse allocations. For example, healthcare and consumer staples are the sectors with the largest weighting in the Future Generations strategy, which has already raised almost €100 million since its launch in 2022.