AFTAs 2020: Best New Technology Introduced Over the Last 12 Months (AI, Machine Learning and Analytics)—BNY Mellon

AFTAs

Environmental, social and governance (ESG)-conscious investing has become increasingly popular with investors over the course of the last year, although there is little standardization in this area. Asset owners, portfolio managers and analysts all have very different priorities: They can choose to consume data from a dizzying array of sources, ranging from public bodies, to third-party providers, to in-house metrics. And concepts like sustainability mean different things to different investors. “How do you help investors grow their sustainability investments and figure out what data is more appropriate to support their own individual objectives?” says Corinne Neale, global director of business applications at BNY Mellon Data and Analytics Solutions. To answer that question, in 2020 the bank launched an application, built on Microsoft Azure, that loads disparate data sources and enables mapping of ESG factors against clients’ preferences. 

The app provides users with measurements to help them understand if the data underlying specific ESG factors is reliable, with taxonomies developed in collaboration with the industry. The app’s behavior feedback loops help the user to customize their own portfolios, while effectively crowdsourcing standards across the user community. “At the moment, there is no standard, there is no single definition of sustainability. Investors are saying, I don’t know what data is more material for me to use. How do I know if a product labelled as sustainable or responsible matches what I consider sustainable or responsible?” Neale says.

“Through the creation of a community of users and crowd-sourced metrics, we can provide and build guidance. Investors want guidance from each other, they want to know what the market is doing—is everyone investing in climate action, what data and metrics are others using? There is a great thirst for guidance from investors to investors, and that is what this app does through that community of users.”

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