They make up more than half the world’s extreme poor and more than two-fifths of its displaced citizens. And, as tomorrow’s adults, they are all of its future. Yet few consider children when building investment portfolios — or how those investments might affect them. But this could be changing with the emergence of a new investment strategy: child-lens investing.
The approach is a holistic one. Take, for example, pay-as-you-go solar power services for rural or low-income communities in developing countries. By providing affordable lighting, they enable schoolchildren to study at night, improving academic results. However, they also benefit everyone in the family, as healthier, safer alternatives to kerosene lamps and a source of power to charge phones, which are essential for mobile banking and other digital services.
Up until now, though, few investors have adopted the approach, says Cristina Shapiro, president at the Impact Fund for Children, the investment division of Unicef USA. Last year, it published a child-lens investing framework and toolkit, including due diligence questions and principles for measuring impact, to help asset owners and portfolio managers put child-lens investing into practice. The concept is not new, she says. “But it’s a very disaggregated and disorganised field.”