Innovation comes in many forms. To help finance the needs of children, UNICEF and UNDP are developing a Child Bond Standard, that will cover the areas of education, health, nutrition, water, sanitation and hygiene. The standard will facilitate the issuance of child bonds, as well as serve as a way for financial markets and bond verifiers to measure a bond’s impact on children.

More than 40 per cent of the world’s population is under the age of 25. Meeting their needs is crucial to achieving the Sustainable Development Goals (SDGs). Although many socially responsible corporations and financial institutions have started aligning their activities with the SDGs, children’s rights are often not integrated into business activities and there are large financing gaps. There is a need for financial instruments and commonly accepted methodologies that both mobilize financing for children and measure the impacts of such investments on children and young people.

The Child Bond Standard will include a catalogue to identify and screen projects, measures to evaluate and rate them, metrics to assess their impacts, and principles to conduct information disclosure. The standard is intended to be global, and it will be tested in developing economies initially and rolled out worldwide. The standard will be used in project design to ensure a child-focused approach will be adopted, and after project implementation to measure whether there is a positive and lasting impact on children. UNICEF and UNDP are not going to issue or verify bonds; they are producing an industry standard for issuers and verifiers.

The project will draw on experience from the development of the green bonds market in China in recent years and the SDG Bonds Standard project at UNDP. This collaboration combines the strengths of the two UN agencies: UNDP’s expertise on developmental policy and its platform for the SDG Bond Standard; UNICEF’s framework for integrating children’s rights into impact assessments and its unique technical expertise in education, health, nutrition, water, sanitation and hygiene (WASH).

On 28 April 2020, UNICEF and UNDP brought together 40 experts from international standard setting agencies, research and financial institutions, and young people for an online meeting to kick start the Child Bond Standard project.

Developing this standard will require collaboration between international standard setters, research institutions, financial institutions and UN agencies. Financing is an important driver for achieving the SDGs. This challenge is not just about mobilizing funds and closing financial gaps. There is also a need to fundamentally realign financial markets and systems to prioritize the SDGs. The Child Bond Standard is an important step in this direction, offering an ambitious initiative for moving towards defining SDG-enabling finance for children’s well-being, and assessing the impacts of projects on children’s development.

The first draft of the standard is expected by mid of 2021, with the final standard ready by the end of 2021 after a wide range of industry consultations. It is expected that the first pilot child bond will be issued by financial institutions in 2021 based on the Child Bond Standard.

Mr. Shouqing Zhu, Senior Adviser of UNICEF China and Mr. Devanand Ramiah, Deputy Representative of UNDP China will lead the technical committee.

UNICEF and UNDP are calling upon financial institutions and other interested stakeholders to join the technical committee to develop the Standard and prepare projects for bond issuance.