Social Finance

Social Finance

Enabling Positive Change Through Investments

At BNY Mellon, our social finance capabilities can help investors intelligently and sustainably finance growth, while creating social dividends that address major global challenges.   

Because BNY Mellon safeguards one-fifth of the world’s assets,* we have unique insight into global markets and investors’ needs across the investment lifecycle. We see that a confluence of social and environmental factors from rapid population growth to climate change and constraints on resources are impacting the dynamics of the capital markets. Risk resides where it didn’t before and new opportunities are emerging. Sustainable investments that take a longer-term view can help hedge against risk from these social and environmental forces.

As mainstream investors – from individuals to institutions – continue to seek strategies that allow them to mitigate risk, maximize returns and diversify their portfolios, we believe there’s untapped market potential in social finance.

Social Finance: A Holistic Framework

Social finance describes investment activities that include both financial and significant social and/or environmental impact. These strategies include:

  • Socially Responsible Investing:  Integrating environmental, social and governance (ESG) considerations into investment decisions and portfolio management.
  • Environmental Finance: Allocating capital to mitigate negative or maximize positive environmental impact through green bonds, project finance, etc. and supporting areas including renewable energy, energy efficiency and green buildings.
  • Impact Investing: Generating intentional positive social and/or environmental impact through investments in funds, companies or organizations.
  • Development Finance: Advancing economic development goals in emerging and developing markets through the de-risking of investments to mobilize private sector finance.

By creating a cohesive social finance framework, we can help open the field to mainstream investors, as well as expand the opportunities for investors specifically interested in building an investment strategy around their social and environmental values. Social finance has increasing value for mainstream investors because it can provide a sustainable set of tools to help manage investment risk, diversify portfolios and support long-term financial performance.

Social Finance at BNY Mellon

Because we work with corporations, institutions and investors across the investment lifecycle, we can see social finance’s full potential. We bring the breadth of our business to bear in developing and delivering innovative social finance solutions for clients, and our social finance capabilities continue to grow. Through our formalized focus on social finance, we’re harnessing the power of investments to help our clients succeed and effect positive change in the process.

  • Within Investment Management, our SRI offerings range from SRI funds and ESG screening to full integration and issue engagement. Six of our affiliated boutiques are signatories to the United Nations Principles for Responsible Investment (UNPRI). As of 2013, 48 percent of our assets under management – or $754 billion – are covered by the UN PRI, up from $148.5 billion in 2011.
  • In Investment Services, we’ve provided ESG screening capabilities to our Asset Servicing client base for more than 10 years. The number of clients using our ESG screening services grew by nearly 26 percent in 2013.
  • Our Depositary Receipts (DR) Global Investor Relations Advisory (GIRA) team helps issuer clients elevate market visibility of their DR programs and works with them to develop and execute strategic market outreach plans. One of GIRA’s areas of suggested focus for DR issuers is ESG disclosure, as issuers can benefit from understanding how investors and financial intermediaries view their sustainability practices and performance.
  • Our Corporate Trust business supports our clients’ ESG needs through environmental finance products including custody of carbon credits, environmental trusts and escrows, green bonds and project finance.

Beyond the services we provide clients, BNY Mellon is driving research to advance social finance and forming strategic partnerships, including innovative philanthropic approaches to fund and invest in systemic change.

  • Our Social Innovation Challenge, UpPrize, employs a “catalytic philanthropy” model to help support and invest in local entrepreneurs, creating innovative products that positively impact key social or community challenges.

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* The statement that our company oversees “a fifth of the world’s assets” is based upon the value of assets held in custody reported by the top 51 custodians, as reported by Global Custody.net in March 2014.