BNYÂ Mellon has launched a service enabling their global collateral management clients to apply their environmental, social and governance (ESG) principles to the assets they are willing to accept as collateral.
The functionality draws on MSCI ESG ratings through BNY Mellon’s ESG data analytics. Rating are assigned to E, S and G individually and then adjusted and aggregated into a final ESG letter rating, from AAA to CCC.
The ESG data analytics incorporate these MSCI ESG Ratings into clients’ collateral eligibility decisions via the bank’s electronic collateral schedule manager, RULE.
“Rolling out this capability takes RULE, a proven technology that has already transformed the process of negotiating collateral schedules, and expands it into a very crucial and topical area of focus for the industry,” says Brian Ruane, CEO of Government Securities Clearing Corp., Clearance & Collateral Management and Credit Services at BNY Mellon.
He adds, “Now, through the incorporation of capabilities from ESG Data Analytics, a client can bring their ESG priorities into negotiations around acceptable collateral, adding an entirely new dimension of utility to the platform.”
The MSCI ESG ratings represent just the first input into BNY Mellon’s ESG collateral management capabilities in what will be an iterative process of further honing the sophistication of the data analytics’ patent-pending ESG mapper, according to the bank.
Over time, BNY Mellon expects to add supplementary ESG data to clients’ ability to express their ESG preferences, making the offering even more responsive to their ESG goals.
Launched in 2019, RULE affords collateral providers and receivers the ability to negotiate collateral schedules, establishing which assets each party is willing to accept as collateral in real time.
BNY Mellon’s ESG data analytics supports institutions to reach their sustainable investment goals by employing a combination of crowdsourcing and data science. This allows them to benchmark their ESG principles against their peers.
In addition it helps clients customise and monitor portfolios in alignment with their sustainability missions, address demonstrability concerns and support evolving standards for ESG implementation practices.
©Markets Media Europe 2021
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