Partnering for Progress: BNY Mellon and the UN SDGs in the Banking Sector

Against a backdrop of the ongoing global economic recovery, rising inflation, patchy and fragile economic growth forecasts, impending recessionary pressures, global supply chain and labour market disruptions and unsustainable debt levels, the world is witnessing ever-evolving conflicts at its zenith since the foundation of the United Nations. By current estimates of the UN Annual Report, approximately two billion people are currently residing in conflict-affected countries, with the start of the war in Ukraine led to the fleeing of 6.5 million refugees over time, causing severe distress on the world trade and financial markets and affecting the global economic growth by 0.9 percentage points merely by the end of 2022.

Supporting the UN SDG Agenda

The United Nation’s 17 Sustainable Development Goals (SDG) of 2015, it’s 2030 Agenda and the ambition of the 10 Principles of the UN Global Compact- including areas of human rights, labour, environment and anticorruption- for businesses establishes meaningful and strategic ambitions towards the development of a better world. As of 2022, according to the UN Global Compact Reports, the current trajectory shows that not more than 46% of all companies within the global business community have nested achievement of SDGs as their core focus. The collaborative effort between over 50 international and regional organizations and the Department of Economic and Social Affairs is based upon endeavours from over 200 countries. The need for sustainable finance is increasing in the wake of the recent financial scandals causing heightening regulatory and reputational challenges for organizations.

Source: United Nations (2022)

Considerations for the Banking System

The consensus aim of the SDG establishes not only the environmental and social considerations but also the impact of ESG integration within company operations through accountable ecosystems that drive change. The nature of the businesses and industry in which the company operates determines which SDGs can contribute to its competitive positioning and have a profound impact. Banks play a critical role in the global financial ecosystem as the key orchestrator. Centred on the concept of dual materiality, banks are held accountable for both sustainable business operations and their contribution to the UN SDGs including their impact of portfolio ESG risk in their investing and lending operations as well as climate change.

Source: Google Images (2017)

BNY Mellon’s commitment to sustainability

BNY Mellon, as the largest custodian bank, deals with accounts in excess of 20% of the global investable assets and processes payments of over $2 trillion dollars each day. The approach taken by BNY Mellon, called its Future First strategy, starts with Enterprise ESG 2025 goals, which is built on three pillars- Culture and Purpose, Responsible Business and Global Citizenship. A materiality assessment that has been conducted annually over the past years highlights the most relevant ESG considerations for BNY Mellon and addresses actions to be taken for every issue.

According to BNY Mellon CEO Todd Gibbons, “The pandemic has accelerated the need for widespread adoption of ESG Principles and responsible investing.”

Together with the United Nations Global Compact (UNGC), Principles of Responsible Investment (PRI), Sustainable Development Goals (SDGs) and the Sustainability Accounting Standards Board (SASB), the bank facilitates building a sustainable value chain infrastructure. BNY Mellon has, with the efforts of the World Economic Forum and Monetary Systems Platform set afloat a series of multi-stakeholder conversations initiative trying to create a more inclusive and resilient banking system.

In conclusion, the global capital market participants in a pandemic and conflict-affected world recognize the exigencies for reform, innovation and trust, following the cycles of unequal economic recovery. A Globally-Systematically Important Bank must be cognizant to the UN SDG pillars as it shoulders the responsibility of ensuring the soundness of the global financial system due to its size, interconnectedness and potential ‘crisis-multiplier’ effect in event of its failure.

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Next up is discussion on BNY Mellon and SDG 1: Fighting Poverty and Supporting Human Rights

Reference List

• BNY Mellon Official Website. (2023). Sustainability Insights. Retrieved from Sustainability (bnymellon.com)
• BNY Mellon Official Website. (2023). Enterprise ESG at BNY Mellon. Retrieved from Enterprise ESG (bnymellon.com)
• Bloomberg. (2021). BNY Mellon Investment Management CEO Smits on ESG Outlook. Retrieved from Watch BNY Mellon Investment Management CEO Smits on ESG Outlook - Bloomberg
• United Nations. (2023). Sustainable Development Goals. Retrieved from Take Action for the Sustainable Development Goals - United Nations Sustainable Development
• UN Environment Programme Finance Initiative (UNEPFI). (2023). Principles for Responsible Banking: Shaping the Future of Banking. Retrieved from Principles for Responsible Banking – United Nations Environment – Finance Initiative (unepfi.org)
• UN Global Compact. (2021). United Nations Global Compact Strategy 2021-2023. Retrieved from UN-GLOBAL-COMPACT-STRATEGY-2021-2023.pdf (ungc-communications-assets.s3.amazonaws.com)
• Environmental Finance. (2023). The Sustainable Bond Market Against the Background of a New Geopolitical Reality. Retrieved from The sustainable bond market against the background of a new geopolitical reality :: Environmental Finance (environmental-finance.com)
• FXStreet. (2023). Video on Monthly Economic Outlook: Analysis. Monthly economic outlook [Video] (fxstreet.com)