Guidelines for Child-Responsive Bonds & Sukuk

Highlights

The Guidelines for Child-Responsive Bonds/Sukuk represent a pioneering effort by UNICEF Indonesia to integrate child welfare into sustainable finance. These instruments are designed as Use of Proceeds bonds and sukuk, ensuring that all funds raised are exclusively directed toward child-focused projects in areas such as education, health, nutrition, water, sanitation, hygiene (WASH), social protection, and climate resilience. What sets them apart from other social bonds is their explicit commitment to child rights, guided by the UN Convention on the Rights of the Child (UNCRC). They also emphasize child inclusion, encouraging mechanisms that involve children in project design, implementation, and evaluation. By embedding "do no harm" principles, these bonds/sukuk prohibit financing activities that could negatively impact children’s well-being, making them a unique innovation in sustainable investment.

For Indonesia, the relevance of child-responsive bonds is particularly strong. With around 80 million children—almost one-third of its population—the country still faces persistent disparities in poverty, education, nutrition, and access to social protection. Despite progress, nearly 40% of children remain deprived in multiple dimensions of poverty, and child-related SDG indicators are off-track in two-thirds of cases. At the same time, Indonesia has a proven track record in issuing sovereign sustainable bonds and sukuk, mobilizing billions for green and social projects. This existing financial infrastructure provides a solid foundation to expand into child-responsive bonds, helping bridge the estimated US$1.7 trillion SDG financing gap by 2030. By channeling resources directly to children’s needs, these bonds not only advance national development priorities but also foster long-term socio-economic benefits, ensuring a healthier, more productive future workforce. This guideline supports government and market actors to incorporate child rights outcomes into thematic bonds/sukuk. It outlines principles, a practical process for selecting child‑focused use‑of‑proceeds, and clear approaches to monitoring, reporting, and verification.