BNY Mellon has introduced a suite of reporting tools to enable institutional investors evaluate ESG factors and United Nations Global Compact (UNGC) principles in investments.
The move is said to be in response to rising demand for ESG scoring among investors, with an aim to enhance risk management practices.
The demand for regulatory requirements associated with ESG is said to have particularly increased after the European Union’s enactment of Directive on Pensions (IORP II).
The new proposition will enable clients to gain access to their total ESG and UNGC scores on equities at the account level compared to relevant benchmarks.
Besides, the tools will allow users to see ESG and UNGC scores at a company level to gauge their sustainability.
In order to source data for these reports, the firm has tied up with Arabesque S-Ray that measures the sustainability of firms using machine learning.
BNY Mellon managing director of global risk solutions in EMEA Fraser Priestley said: “This new service expands upon our existing post trade compliance monitoring service, which enables clients to screen and track their investments based on social and ethical factors.
“We believe our new service around ESG metrics will be particularly helpful to a number of European pensions who, under a directive known as IORP II, are required to disclose the relevance and materiality of ESG factors and how they are taken into account for risk management processes.”