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ESG’s increasing visibility in short-term investments

US-based institutional clients of BNY Mellon's LiquidityDirect platform are now able to seamlessly invest cash in commercial paper (CP) and exchange-traded funds (ETFs) while also being able to leverage a search application that introduces environmental, social and governance (ESG) ratings onto the portal.

Building on investment capabilities

The addition of these new investment options and ESG analytics represents the next step in the expansion of LiquidityDirect, BNY Mellon's short-end investments platform, to deliver a range of liquidity management and investment choices across the short end of the curve.

"Clients are looking to easily access investments with different returns, terms, and risk profiles via a single platform," commented George Maganas, global head of Liquidity & Margin Services at BNY Mellon. "Our latest expansion, which follows on from the addition of sponsored cleared repo earlier this year, provides clients with industry-leading capabilities that address their investment needs via a simplified user experience. We've been listening to our clients and it's clear that today, investing is about more than just returns. We have to help clients address the ESG investment challenges they face across a range of issues, from non-standardisation to securing meaningful insights on the environmental and social impact of their investments. This is why we are adding capabilities to embed clients' ESG investing criteria in their short-term cash management, helping them to connect the dots between their values and investments."

New functionalities

The new offerings on the BNY Mellon platform are designed to enable clients to select from a range of investments at the click of a button. CP is short-duration debt issued by banks and corporations with maturities ranging from overnight to one year. Yields on cash invested in CP offer opportunities for higher and differentiated returns compared to other short-term investments.

Short-duration fixed income ETFs typically invest in short-term, high-quality government securities like US treasury bills or investment-grade corporate bonds and are an alternative near-term investment option.

Socially responsible and sustainable investing is of growing importance. LiquidityDirect's new focused investing capabilities, which are run by BNY Mellon's ESG Data Analytics, help clients analyse ESG ratings of eligible investment options to enable alignment with their corporate social and ethical values.   

In addition, LiquidityDirect is increasing access to its investment platform for clients through a collaboration with treasury workstation provider Indus Valley Partners (IVP). To date, LiquidityDirect is also fully integrated with cash management systems such as GTreasury and Hazeltree. As of year-end 2020, the platform supported almost US$9 trillion in transaction flow annually for more than 700 corporations and institutional investors.

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