Investing for a better future for children

What are the basic principles of the Triodos Fund for Future Generations?

Sjoerd Rozing: “The fund was started with the goal of investing in children’s welfare, in support of UNICEF. This general goal is based on five main axes:

  • improve health
  • Better access to education
  • Exploit protection
  • Provide a good environment to grow in
  • Promote equality. Where a child is born should not determine his or her future.

So the fund mainly focuses on the non-Western world, because that is where most of the children who need help live.

Rosing: “No, the whole world is our field of activity, because there is still a lot to do in this area in Western countries. In addition, many solutions in emerging countries are not investable. There is not always a regulated stock exchange there or that risks The investment is too high for another reason.”

What contribution do the investors in this fund make to making the world more sustainable?

Rosing: “Through its focus on health, education and equality, the fund focuses primarily on social issues, and on guidelines for environmental, social and corporate governance standards. But the fund also has a clear environmental component, such as improving access to clean drinking water and clean energy. These things with a better living environment. When I talk about good nutrition, this is the nutrition that is obtained without harming the earth. In addition, nutrition also has a social component when it comes to getting good nutrition.”

Why is it so important to improve children’s opportunities around the world?

Rosing: “Today’s children and future generations are victims of climate change and inequality. They also have little impact, because they do not participate in the discussion and are difficult to advocate for their rights. It is also important to give children a voice. That is why we want to make this topic high on the corporate agenda. Children are already an important target group for these companies, but they will be the only target group in the future.”

“Children will be the only target group in the future.”

What concrete problems does the fund want to help solve?

Rosing: “Children in the non-Western world often die needlessly due to issues that can be resolved fairly easily by improving their living environment and providing better care. Another major problem is that around 60 million children worldwide do not have access to an education. If They have this access, the quality is not always good.

In order to better protect children, consideration should be given to preventing child labor and other forms of exploitation. The fact that children come online at an increasingly younger age means that they can also become victims of people with the wrong intentions at a younger age.”

What kind of businesses help improve children’s chances?

Rosing: “These are, for example, telecommunications companies in emerging countries that ensure people connect with the rest of the world. So that children can access education online, and their parents have access to financial services, which gives them the opportunity to break out of poverty. It is also important that Children are able to use the Internet safely, which is why online safety is also an important topic for the fund.

Water companies help children get clean water, as well as good drainage. There are still no toilets or sewage systems in many parts of the world.

The fund portfolio now consists of 33 companies that all help improve children’s well-being in their own way. Yes, this is a focused wallet, but that’s our approach. The number is sufficient to ensure adequate spread.

“The fund portfolio now consists of 33 companies that all help improve children’s well-being in their own way”

All other sustainable wallets have the same names in the top 10 collectibles, such as Apple and Microsoft. With this box, it’s really different. There are a few companies in our top ten of the biggest positions people will ever know about. This not only makes it a distinctive product, but also improves the diversification of the investment portfolio.”

How were these companies selected?

Rosing: “Our stock selection consists of three steps. During the first step, we only select companies that are clearly doing something good for the world in the broad sense of the word.

In the second step, we only select companies that meet our minimum criteria, which consists of 27 criteria. In doing that, we look at things like the situation with respect to CO2 emissions. Are employee rights properly regulated? For example, many medical companies are dropping out because their animal testing policy is not sound.

During the third step, we determine an investment case for the remaining companies. What about evaluation? Is earnings growth strong? “

85% of the portfolio consists of companies from the United States, Europe and Japan. Why are companies from the non-Western world so absent?

Rosing: “This ratio does not tell the whole story. Although a number of companies in the portfolio are listed in a Western country, they focus 100% or more than 50% on the non-Western world. The intent is to increase investment in the non-Western world, But gradually and to a maximum of 25%. After all, if the portfolio is dominated by companies from the emerging world, this significantly increases the risk profile. Not every investor wants this.

In addition, there are a lot of Western companies with connections to the non-Western world, such as the Dutch DSM, which produces food ingredients, or the Swiss SIG Group, which sells packaging materials that allow food to be kept longer outside the refrigerator. “

Also important, how do you measure the positive impact of the fund?

Rosing: “We measure a number of the fund’s impacts, such as carbon dioxide emissions, water consumption and waste. We compare these results to a sustainable benchmark. The waste scores are a little lower, but the carbon dioxide and water are much higher than the benchmark.

We also measure how the Fund contributes to the UN Sustainable Development Goals. In terms of improving health, education and inequality, the fund clearly outperforms the broad sustainability benchmark.”

Yield expectations?

Rozing: “All Triodos funds aim to achieve a market-aligned return with a better impact profile. This also applies to this fund.”

What type of investor is the Triodos Future Generations Fund suitable for?

Rosing: “The fund is primarily intended for private investors. It can be grandparents who buy this box for their grandchildren. We also think of family offices that feel drawn to the subject. Six months after launch, we are satisfied with the turnout, especially given the unattractive climate for trade fairs this year.”

Finally, the fund’s investors automatically contribute to UNICEF. What kind of contribution is this?

Rosing: “We are supporting a UNICEF project in Côte d’Ivoire where schools are built with bricks made of plastic waste. An annual amount of 10 basis points of AUM goes to UNICEF. This is paid for from management fees and has no impact on the investor’s return.

No, this is not a cigar out of your own box, because the costs of this box’s chest are the same as those of other Triodos boxes. And the more capital in the fund, the more money goes to UNICEF.”

  • know more? Here you will find more information about the Triodos Future Generations Fund.

Disclaimer UNICEF does not play any role in the development, management or investment decisions of the Triodos Future Generations Fund. UNICEF does not recommend any investment advisor, investment, company, product or investment in the Triodos Future Generations Fund.
This is an advertisement. Please refer to the Triodos Future Generations Fund prospectus and key investor information document before making any investment decision. An overview of the investor’s rights can be found in the prospectus.
As a result of the investment policy, the value of the fund’s assets can fluctuate widely. Triodos Future Generations Fund is managed by Triodos Investment Management.
Triodos Investment Management is authorized as a Director of an Investment Institution and Director of UCITS by the Dutch Authority for Financial Markets (AFM) and as such is supervised by the AFM and De Nederlandsche Bank.

Rob Stalinga is a financial journalist. The information in his articles is not intended as professional investment advice or as a recommendation to make certain investments. Click here for an overview of IEX Editors’ investments.

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