Saturday, February 25, 2023

Driving Inclusive and Sustainable Industrialization: Insights on BNY Mellon

Source: BNY Mellon ESG Report (2021)

Sustainable Development Goal 9 focuses on building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation. These three aspects are essential for sustainable development as they provide basic physical facilities, drive economic growth and job creation, introduce and promote new technologies, and enable efficient use of resources. BNY Mellon, a global financial services company, recognizes the importance of SDG 9 and has integrated it into its enterprise Environmental, Social, and Governance (ESG) pillars.



Outlook for Sustainable Finance

Recent administration of 169 sustainable, green bond issuances, until 2022 add up to $89 billion, putting BNY Mellon at one of the leading trustees in green bonds by deal volume for two consecutive years. The bank has in collaboration with the Yale Initiative, has helped deliver to and further its ESG goals and sustainable finance research. The Corporate Trust manages bonds and loans that help the bank to finance multiple infrastructure, green infrastructure and renewable energy projects.

Resilience of Technological Progressiveness

The representation of key intersection of societal needs and BNY Mellon business priorities are achieved through Information security and resilience to cyberattacks. BNY Mellon adopts digitalization and innovative technology in its financial operations through its recent digital transformation. Moreover, the use of artificial intelligence and data analytics (AIDA) has become increasingly embedded across all platforms. In 2023, the bank has collaborated with 25 other banks and technology firms to augment a framework around smooth and responsible adoption of AIDA. 

Source: United Nations (2023)


Transparency & Client Trust

Ever-evolving sustainability challenges like board oversight, responsiveness and functional transparency are crucial to stakeholder expectations. BNY Mellon's integration of its competency of cash dealings with Dreyfus CIS in the second half of 2021 offered clients a trustable and diversified platform for liquidity solutions across investment vehicles, to institutions with over $300 billion per year in AUM. By making its annual Corporate Social Responsibility (CSR) Report publicly available, BNY Mellon demonstrates its commitment to transparency and accountability, and allows stakeholders to gauge the company's ESG performance and impact.


Industry, Innovation, and Infrastructure

BNY Mellon plays a crucial role in economic growth, job creation, and introducing and promoting new technologies. BNY Mellon recognizes this and continues to support SDG 9 through its various initiatives such as partnership with the Massachusetts Institute of Technology (MIT) to establish a research centre focused on blockchain technology, and with the Singapore Management University to establish a fintech lab. BNY Mellon has also hosted an annual innovation challenge and also has a venture capital arm, BNY Mellon Ventures, which invests in innovative fintech companies. Through these investments, BNY Mellon can stay up-to-date on the latest trends and technologies in the industry, and potentially integrate them into its own operations.

The COVID-19 Impact 

The pandemic has revealed the urgent need for resilient infrastructure. The Asian Development Bank notes that critical infrastructure in the region remains far from adequate in many countries, despite the rapid economic growth and development the region has experienced over the past decade. Making infrastructure resilient to disasters and climate change will require an additional investment of $434 billion per year. This sum may need to be even greater in some subregions, such as the Pacific island developing states.

Inflationary environments call for the infrastructure sector to be more insulated than other segments of the equity markets. BNY Mellon believes that the backdrop for defensive businesses, particularly those exposed to themes such as the aging demographic and the energy transition, is as constructive as it has ever been. As for the global push toward a lower-carbon future, regulated utilities may need to convert their generation fleets to more sustainable sources. This process could drive regulated utilities to grow more rapidly than ever. Faster-rate base growth should lead to faster earnings growth and, likewise, faster dividend growth. 
Source: United Nations (2023)


In conclusion, BNY Mellon recognizes the importance of SDG 9 and continues to support it through its various initiatives. However, the world still has a long way to go to fully tap the potential of inclusive and sustainable industrialization, infrastructure, and innovation. The COVID-19 pandemic has highlighted the need for resilient infrastructure, and making infrastructure more sustainable and accessible to all. However, the world still has a long way to go to fully tap the potential of inclusive and sustainable industrialization, infrastructure, and innovation. Least developed countries need to accelerate the development of their manufacturing sector, and there is a need to scale up investment in scientific research and innovation to meet the 2030 target.

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