SENNA

Investing With a 'Child Lens' to Deliver Better Outcomes

In a bid to create a more equitable future, a growing number of investors are taking a "child lens" approach to their portfolio decisions. The strategy aims to back businesses and projects that improve the lives of younger generations through better access to healthcare, education, and safe environments.

"As a society, we still don't treat children as the unique stakeholders that they are," says Sjoerd Rosing of Netherlands-based Triodos Investment Management, which manages almost $7 billion in assets. Triodos has been pioneering the child-lens approach, recognizing that today's children are tomorrow's youth and future adults.

Issues affecting children often get overlooked, as young people can't cast ballots or vote with their dollars. But the rise of Gen Z activists, from the streets of Nepal to Kenya, is forcing people to pay attention. Child-lens investing is an attempt to get ahead of young people's social and economic development.

The strategy takes a long-term view, focusing on businesses that provide nutritious food, quality healthcare, inclusive education, safe digital and physical environments, and protection from exploitation and violence. For example, Triodos has backed a Kenyan social enterprise that trains young people as solar technicians, empowering them to bring affordable clean energy to their communities.

"Children are the ultimate long-term stakeholders," says Rosing. "Investing with their interests in mind can deliver better outcomes for all generations."

This philosophy is gaining traction among a growing cohort of mission-driven investors. Boston-based Prime Coalition, a nonprofit that mobilizes capital for climate solutions, recently partnered with the Small Foundation to launch a fund focused on catalyzing investments that benefit children and youth.

"We want to support innovations that create a more equitable and sustainable future," said Liz Diebold, Prime Coalition's director of strategy and partnerships. "That means looking at the whole child - their physical, mental, and social wellbeing."

While the child-lens approach is still nascent, experts say it could have far-reaching implications. Sasha Dichter, chief innovation officer at Acumen, a pioneering impact investor, believes it represents a fundamental shift in how investors view their role.

"It's about moving from short-term financial returns to long-term, systems-level change," Dichter said. "If we can get the incentives right for businesses to prioritize the needs of children, we all stand to benefit."