Banking on Sustainability: BNY Mellon's Commitment to Economic Growth and Inclusion

BNY Mellon is a financial services company which is committed to encouraging sustainable economic growth, job creation and economic development as part of the United Nations' Sustainable Development Goals (SDGs). In 2023, significant strides towards achieving SDG 8 were made by BNY Mellon and a goal was devised to promote sustained, inclusive, and sustainable economic growth, full productive employment and decent work for everyone.

Source: BNY Mellon Sustainability Report (2022)

Supporting Small and Medium-Sized Enterprises (SMEs)

Source: United Nations (2023)

One of BNY Mellon's key initiatives in 2023 is to provide the much needed support to small and medium-sized enterprises (SMEs) among others. The leading custodian bank of New York and globally recognized that SMEs play a critical role in the propulsion of economic growth, economic development as well as job creation, specifically in emerging markets. This move was to support SMEs, along with a dedicated program launched by BNY Mellon allows provision of financing, mentoring and other required support to help SMEs expand and succeed. This move is designed to assist SMEs in  overcoming the challenges they face in accessing financing and other resources, enabling them to contribute to sustainable economic growth in their communities in the near future.

Promoting Diversity and Inclusion

The focus of BNY has also been on diversity and inclusion promotion within its own enormous workforce. The company has recognized that this is essential for driving innovation and attaining sustainable economic growth. To that end, BNY Mellon has also launched several initiatives aimed at advancement of diversity and inclusion, including establishment of Employee Resource Groups, Unconscious Bias Training for all of its employees, IMPACT enabling recruitment, development and advancement of its multicultural workforce, PRISM for LGBTQ inclusion, VENET for veterans, military spouses and family members, primarily focusing on promoting this objective. These initiatives are designed to create a more inclusive workplace culture that enables employees to reach their full potential and contribute to sustainable economic growth. As of December 2022, in all their global workforce consists of 40% women with 37% of new hires and 32% senior leadership who are women and female BOD control of a high 36% as part of its WIN program, which exhibits their philosophy in action.

Reducing Environmental Impact  

Source: United Nations (2023)

Another key component of sustainable economic growth is the aim of minimizing environmental damage and consequence. In 2023, BNY Mellon implemented several initiatives like adopting sustainable procurement practices, including sourcing renewable energy and reducing waste, which were aimed at reducing its carbon footprint. The multinational bank also implemented a comprehensive recycling programme to encourage its employees towards a sustainable future, furthering practices such as regular use of public transportation or carpooling to its offices. GENEDGE is one such initiative that help drive high-impact ideas by aiding educational, charitable, social, networking and collaboration for all levels of professionals across its offices, with reverse mentoring and Shadow Executive Programs. Through this, its environmental impact has significantly reduced, making way for BNY Mellon to a more green future by supporting UN SDG 8.

Conclusion

In 2023, BNY Mellon exhibited its constant commitment in stimulation of sustainable economic growth and boosting job creation by launching its various initiatives for SMEs and the society as well, to further its multifaceted goal of diversity, inclusion and reduction of environmental impact. Even though all the SDG goals are not achieved by 2030, nevertheless efforts should be made towards achieving them in a different timeframe. Looking at where we would be in 2030 there should be setting of adjusted targets with the ultimate aim of SDGs to transition in subsequent 5-10 years in a more sustainable future. As time goes by hopefully we will look at major improvements year on year till one day it will lead to a more promising time ahead.

References:

• BNY Mellon Official Website. (2023). Sustainability Insights. Retrieved from Sustainability (bnymellon.com)
• United Nations. (2023). Sustainable Development: Goal 8. Retrieved from  https://sdgs.un.org/goals/goal8
• 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)

BNY Mellon and the Challenge of U.S. Monetary Policies in 2023

The Current Economic Climate

The world has seen a lot in the recent few years, from a pandemic to severe economic downturns, financial insecurity, job loss and supply chain disruptions. The global growth has slowed from 6% in the year 2021 and 3.2% in 2022 to 2.7% in 2023. This is indicative of the weakest growth profile since the year 2001, besides the global financial crisis and the nimble phase of the COVID-19 pandemic. The world economy is yet to recover from these shocks and it has led to a dire situation for everyone. BNY Mellon Bank, one of the largest custodian institutions in the world, has had to traverse this turbulent environment in order to maintain stability for all its stakeholders.

Source: Federal Reserve (2023)

Monetary Policy and Outlook

The economic view presented by BNY Mellon for the year are of a nuanced nature as it considers the effect of government intervention in the form of injecting cash into a slumping economy as crucial to stimulating consumer demand, and is considered as a mandate during a crisis. BNY's monetary policy has been interlocked towards supporting economic upswings, particularly for the mass who have suffered disproportionately from the effects of the pandemic. 

BNY Mellon's Asset Management branch currently oversees more than $2 trillion in assets, it standing as an enormous financial institution for its clients worldwide. Resultingly, the bank seems well-positioned to steer through the current financial climate. BNY Mellon has also been acting as an inflation hawk, with the cost of living as measured by the CPI index rose to 7% in the U.S. this year which is a cause of major concern for policymakers worldwide. This is higher than the Federal Reserve's target rate of 2% and calls for close monitoring of the situation. BNY's experts have predicted that the inflation rate will taper off over time, to be around 2% in the coming times.

The Future Prospects 

Source: St. Louis Federal Reserve (As of 2019)

Looking ahead, The Bank of New York, has its business well-positioned in 35 countries, has opportunity to proactively respond to economic, social, environmental and governance developments, while providing the best services for its clients. The bank has been investing in technology and digital solutions to enhance its services, which has become increasingly important in the current climate. With the rise of remote work and digital communication, the bank has access to data and insights from one of the largest datasets in the world.

Typically, banks revel in an economic growth environment as it drives demand for loans that leads to healthy markets. The right amount of stimulus is expected to taper off the virus and move world away from a total economic meltdown aside from creating opportunities after the volatility storm. The graph presented alongside shows the Total Annual Outlays data by the Federal Reserve as a % of GDP since the Depression in 1929 and every economic crisis that followed. From the Vietnam War to the 9/11 attack to the 2008 Global Financial Crisis has  not put the global economy through a complete stranglehold as The Great Depression, and now the coronavirus. A W-shaped recovery curve has been expected, which is far from an overly bearish estimation, in face of such a volatile environment, as per the experts at Mellon. 

Source: Bloomberg (2023)

As conditions of lending are likely to be tighter than ever, with the above graph depicting the figure at a high 44%, a mild recession is in the making. Also, as SME banks with $250 billion or less in assets provide around 50% of the U.S. commercial and industrial loans, and after the major collapse of Silicon Valley Bank, they are likely to have greater regulatory checks. The strength in the job market is probable to mild the effect of the slowdown. BNY's mission is to support economic growth while also promoting social and environmental responsibility. Although there is uncertainty in the future being as volatile as the present, economic stimulus seems necessary to get the economy out of the foxhole and to open up a world of opportunities, no matter the shape of the recovery curve.

Conclusion

Rather than the current economic crisis-like environment coming from securitization of sub-prime mortgages, it has begun as a severe health crisis. The bank's monetary policy has been focused on supporting economic growth and addressing inflation concerns. With its extensive AMC and custodian services and the bank's investment in digitalization and technology as well as its commitment to sustainability highlight its commitment to contemporary solutions that benefit both its clients and the vast world.

References:

• BNY Mellon Official Website. (2023). Assault on Central Banks. Retrieved from  https://www.bnymellon.com/us/en/insights/aerial-view-magazine/assault-on-central-banks.html
• BNY Mellon. (2023). Bank Stress a Headwind to Economic Growth. Retrieved from https://www.bnymellonwealth.com/insights/bank-stress-a-headwind-to-economic-growth.html
• BNY Mellon. (2022). Aerial View Magazine. Retrieved from https://www.b nymellon.com/content/dam/bnymellon/documents/pdf/aerial-view/a-fine-line-for-the-fed.pdf
• BNY Mellon. (2022). Annual Report – Financial Section. Retrieved from The Bank of New York Mellon Corporation 2022 Annual Report - Financial Section (bnymellon.com)
• Federal Reserve. (2023). Financial Stability Report, 2022. Retrieved from https://www.federalreserve.gov/publications/financial-stability-report.htm

BNY Mellon's Digital Transformation Journey: Investing in Blockchain, AI, and Cybersecurity for the Future

BNY Mellon has been the financial services industry pioneer for over two centuries since its inception in 1784. Over the decades, the bank has embraced digital innovation to propel itself into the future. With its primary focus on digitalization through cutting-edge technology, The Bank of New York has contributed to the current strength of the economy  through investments in various blockchain technologies, digital assets, artificial intelligence, and cybersecurity, among others. Established in the year 2000, BNY Mellon Technology Private Limited, a subsidiary of BNY Mellon, operates in India and works towards providing leading technology solutions to the bank. The bank has over 13,000 professionals who work across nine innovation centres globally and assist in empowering the bank worldwide.

Source: Google Images (2019)

Blockchain and Digital Assets

In August 2021, the global market capitalization of cryptocurrencies was a rough $2 trillion, which was more than twice the level at the end of 2020. This data indicates that in just a decade, the crypto market reached approximately 20% of the global market capitalization of gold. A global survey of institutional asset managers and hedge funds indicate that over 270 buy side institutional investors hold 41% of cryptocurrency in their portfolios with an additional 15% planning to hold digital assets in the near future. BNY Mellon's significant investment in blockchain technology and digital assets is aimed at exploring potential use cases for the technology in the financial services industry while creating its own digital assets solutions. The company has provided custodial services for Bitcoin and other cryptocurrencies and has invested in these currencies.

Artificial Intelligence and Customer Service

The company is adopting digitalization in investment services, using AI and process automation to increase efficiency, and robotic process automation to enhance the client experience. With all the traditional and digital assets in one place, pioneering in technology and institutional grade risk management processes built in one infrastructure, BNY is positioned to provide the best customer services. BNY Mellon's investment in artificial intelligence (AI) and machine learning has led to improvement of the efficiency of its operations and customer service. The company uses AI to automate back-office processes, cut costs, and increase efficiency. BNY Mellon has also captured headlines recently for exploring natural language processing and chatbots to improve customer service and interaction. 

Source: BNY Mellon (2022)

Future-Proofing with Investment in Digital Technologies

With over $2 trillion in payments cleared and settled everyday, BNY Mellon also hold the title of being the sole settlement agent for U.S. government securities. BNY Mellon is actively developing new digital products and services to meet the changing needs of its clients, such as its digital asset custody solution. BNY Mellon uses natural language processing to identify the intent of client inquiry emails and machine learning to classify and understand incoming trade instructions.

Source: BNY Mellon (2022)

Moreover, BNY Mellon is exploring blockchain technology's potential to eliminate unnecessary or duplicative processes, reduce costs, and improve efficiency, transparency, and resilience. APIs are the foundation of the client experience, enabling institutional investors to receive data in their preferred format, while open architecture defines the future-state operating model.

In conclusion, BNY Mellon's digitization efforts reflect the company's unwavering commitment to innovation and technology. By investing in blockchain technology, artificial intelligence, and cybersecurity, and creating new digital products and services, BNY Mellon is positioning itself as a pioneer in the financial services industry's digital transformation.

BNY Mellon and SDG 1: Fighting Poverty and Supporting Human Rights

In 2000, world leaders set the Millennium Development Goals (MDGs) to tackle poverty, hunger, and other global challenges by 2015. While not all goals were achieved, considerable progress was made, including significant reductions in extreme poverty and undernourishment. Today, the United Nations' Sustainable Development Goals (SDGs) continue this work with its goal aimed at eradicating extreme poverty by 2030 and financial institutions like BNY Mellon are playing an essential role in promoting social impact and economic opportunity.

Source: United Nations (2023)

Goal 1: No Poverty 

Despite significant progress in reducing global poverty, COVID-19, rising inflation, and ongoing conflicts like the Ukraine War have resulted in new challenges. The World Bank predicts that up to 100 million people could fall into extreme poverty due to the pandemic, with low- and middle-income countries experiencing significant economic costs. In 2020, BNY Mellon contributed $5 million to the UN Capital Development Fund (UNCDF) to support its work in promoting financial inclusion and sustainable economic growth in the world's least developed countries. This contribution will help to empower low-income individuals and communities to access financial services and resources that can help lift them out of poverty. BNY Mellon is fighting poverty in many ways, including providing financial contributions and community support to refugees impacted by the Ukraine War.

Human Rights: Fighting Modern Slavery and Human Trafficking 

Another vital aspect of SDG 1 is promoting human rights and fighting modern slavery and human trafficking. BNY Mellon is committed to this effort and is implementing due diligence and training practices to prevent these practices in their operations, supply chain, and communities. BNY Mellon directed approximately $1.4 million in grants championing justice, advocacy, reform, human rights, and equal protection under the law to support refugee protection and resettlement in Afghanistan in the year 2021. Additionally, BNY Mellon has continued its partnership with City Year, a non-profit organization by providing funding and employee volunteers that supports at-risk students across the United States, many of whom come from low-income backgrounds to support City Year's efforts to improve their educational outcomes.

Source: United Nations (2023)

Employee Issues: Supporting Diversity, Equity, and Inclusion 

BNY Mellon recognizes that employee issues like diversity and inclusion, talent attraction and retention, gender pay equity, and employee engagement can significantly impact the company's competitiveness. To support their workforce, BNY Mellon has introduced several programs, including a digitally powered employee engagement program, higher minimum hourly wages for US-based employees, a global Caregiver Leave Policy, and enhanced time off, including paid sick and safe-time of 13 days for both physical and mental health needs. The bank also BNY raised $1.4 million from their employees in 2021 through a week-long global Giving Tuesday campaign to advance racial and social justice.

Source: United Nations (2023)

Corporate Giving: Making a Difference in Communities

BNY Mellon's Global Impact Citizenship office carries out the company's strategy and drives social impact in three areas: Corporate Giving, Community Impact, and Enterprise ESG. BNY Mellon has contributed millions of dollars to support economic opportunity and reduce inequity in access to capital, including a $3 million investment in South Carolina-based Optus Bank in 2021. They directed approximately $1.4 million in grants to support refugee protection and resettlement in Afghanistan, championing justice, advocacy, reform, human rights, and equal protection under the law. These actions demonstrate BNY Mellon's commitment to achieving SDG 1 and making a positive impact on the world. BNY Mellon has pledged $1 million and mobilized employee volunteers in Poland to provide humanitarian aid to Ukrainians following the Russian invasion and the company has, until the February of 2023, provided over $1.9 million in support of organizations and individuals providing humanitarian assistance and protection to Ukrainians and refugees.

Source: IMF (2023)

The Future We Want

Fighting poverty and promoting human rights are critical aspects of SDG 1, and BNY Mellon commits to making a difference. From providing community support to refugees impacted by the Ukraine War to implementing programs that support diversity, equity, and inclusion for their workforce, BNY Mellon is leveraging their influence to address pressing global issues and create a better future for all. In conclusion, the actions taken by BNY Mellon in the light of the current economic conditions, including contributions to poverty reduction efforts, COVID-19 resiliency, social justice, and refugee protection, demonstrate a commitment to fulfilling SDG 1 and ending extreme poverty by 2030.

BNY Mellon Financial Analysis: A Look at a G-SIB in 2022

As a global systemically important bank (G-SIB), BNY Mellon is one of the world's largest financial institutions. Founded in 1784, the bank has a rich history of providing financial services to customers around the world. With over $44 trillion in assets under custody and as one of the world's largest custodian banks, BNY Mellon plays a crucial role in managing trillions of dollars in assets for clients across the globe. In this blog post, we will take a closer look at BNY Mellon's financial performance over the past few years.

Company Valuation

BNY Mellon, a custody banking giant, has gained 12% YTD on the NYSE as compared to the 4% rise in the S&P500 index. However, the company's Q4 2022 results were mixed, with net revenues decreasing by 2% YoY. The decrease was primarily driven by a 14% drop in the total fee and other income. The fee and other revenues suffered due to lower investment management fees and a decrease in investment and other revenues from $107 million to -$360 million. That said, the negative impact was partially offset by a 56% jump in the net interest income driven by higher interest-earning assets and an improvement in the net interest margin. 

Source: Google Images (2019)

While BNY Mellon's YTD performance and undervaluation may seem like positive signs, investors should take a more nuanced approach to evaluating the company's current valuation. It's essential to look at additional financial metrics and consider factors such as market trends and economic conditions to gain a more complete understanding of BNY Mellon's prospects.

Revenue and Profitability

In 2022, BNY Mellon reported total revenue of $17.5 billion, a 9% increase from the previous year. The bank's net income for the year was $3.5 billion, up by 21% from 2021. These strong financial results were driven by the bank's ability to capitalize on favourable market conditions and its ongoing efforts to optimize its operations.

Source: BNY Mellon (2021)

Asset Quality and Capitalization

BNY Mellon maintained a strong balance sheet in 2022, with total assets of $454 billion and a Common Equity Tier 1 (CET1) capital ratio of 11.4%. The bank's asset quality remained solid, with non-performing assets (NPAs) making up just 0.3% of its total assets. Additionally, the bank's credit portfolio remained well-diversified and of high credit quality.

Liquidity and Funding

As a custodian bank, BNY Mellon's liquidity and funding position is critical. The bank reported a liquidity coverage ratio (LCR) of 134%, well above regulatory requirements, indicating its strong liquidity position. The bank's funding profile remained well-diversified, with a stable funding ratio (SFR) of 105%, indicating a comfortable funding position.

Market Performance 

Despite facing intense competition from other custodian banks, BNY Mellon's market performance in 2022 was strong. The bank's share price increased by 18% over the year, outperforming the S&P 500 index by 9%. The bank's strong performance was largely attributed to its ability to capitalize on favourable market conditions and its ongoing efforts to optimize its operations.

Conclusion

Overall, BNY Mellon's financial results for the year 2022 were impressive, demonstrating the bank's ability to navigate a challenging economic environment and despite the economic challenges posed by the COVID-19 pandemic, capitalizing on the opportunities. The bank's strong revenue and profitability,
solid asset quality and capitalization, strong liquidity and funding position, and market outperformance are testaments to its strong fundamentals and competitive position in the industry. Going forward, BNY Mellon will have to continue to focus on innovation, operational efficiency, and risk management to maintain its competitive edge and deliver value to its clients and shareholders.

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.

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)