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The sustainability agenda and its implications for post-trade technology adoption
Journal of Securities Operations & Custody,
15
(2),
114-122
(2023)
Abstract
Environmental, social and governance (ESG), referring to the process of integrating ESG factors into investment decisions, and sustainable and impact investing, referring to the intent to deliver an environmental or social outcome on top of financial performance, are growing very rapidly. BNY Mellon and Aviva Investors reflected on implications for post-trade technology adoption. Rapid growth in demand is accompanied by increased expectations from a range of parties including regulators with a focus on disclosures and labelling, international institutions seeking greater alignment and lobbying groups asking for more data. All of this is affecting data to be sourced, controlled and reported, and reporting is complicated by lack of consensus on ESG definitions and difficulty in comparing data and incorporating investors' preferences across jurisdictions. Each party in the post-trade custody chain depends on reference data and needs access to the same accurate sustainability ESG reference data. Missing, different and inaccurate reference data creates errors and discrepancies. Sustainability data acquisition is thus becoming an emerging area of focus for post-trade servicing teams, particularly finding, formatting, correcting and monitoring updates and maintaining asset coverage, creating a shift in operating model. Technology is a critical enabler given the growing volume of data, lack of a single ESG definition and the need to prove product claims and support clients' preferences throughout the custody chain
Keywords: sustainability; ESG; technology; governance; controls; cloud
The full article is available to subscribers to the journal.
Author's Biography
Corinne Neale is Global Head of Sustainability Thought Leadership for BNY Mellon Securities Services. She is responsible for supporting clients’ sustainability goals, leading the development of next generation securities services products and services for asset managers, asset owners and banks, with a focus on currently unmet needs. At BNY Mellon, Ms Neale previously led the data and platform applications team, who pioneered industry awardwinning technology for environmental, social and governance (ESG) data cross-referencing across data sources. Prior to joining BNY Mellon, Ms Neale worked for BlackRock, Credit Suisse, Fitch-Algorithmics, Bankers Trust and was the President of Fintech company IQ Financial Systems Singapore which she sold to Standard & Poor’s. Ms Neale earned two master’s degrees in finance and business administration from ESCL in France and University of Connecticut. She is a regular industry thought leadership contributor with more than ten published articles and regular speaking contributions at industry events.
Sarah Smart is the Head of Aladdin Oversight and Data Enablement for Aviva Investors. She supports the Global COO and leads initiatives relating to the BlackRock Solutions Aladdin platform and the optimisation of data usage within Aviva Investors. Sarah's current focus is driving effective and efficient usage of ESG data to support the investment process and external reporting, focusing on ensuring quality controls and data consistency. She brings together external market insights, peer group knowledge and experience, as well as a broad understanding of the asset management industry. She works closely with Aviva Investors' strategic partners and the key business stakeholders. Sarah brings a wealth of knowledge and experience, having spent over 20 years within the asset management industry. She joined Aviva Investors in 2010 from Schroders Investment Management, where she was a senior business consultant within the group change management function. Prior to this she worked for British Airways in its information management department. She has expertise in implementing global change, reflecting the evolution and changing demands of the business. Sarah holds a BA (Hons) in history (2:1) and an MSc in information technology (distinction)
