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Mellon Investments Corporation

PRI reporting framework 2019

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Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

We believe robust, holistic, open-minded research creates better investment outcomes and that ESG integration enhances our ability to meet or exceed our risk-adjusted return targets. Whether we are investing in public equities or fixed income securities, using fundamental analysis or systematic methodologies, we incorporate ESG factors into our investment processes. These factors are emphasized differently in our various strategies, ranging from an acknowledgement of the ESG profile of a portfolio to active engagement with company managements on extra-financial issues. It is the responsibility of research analysts and portfolio management teams to recognize material ESG considerations and to incorporate them appropriately.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

RESPONSIBLE INVESTMENT STATEMENT

Mellon has established a formal statement, that applies to all assets under management, outlining our commitment to responsible investing . This statement was approved after our merger in February 2018 and is reviewed, modified if necessary and approved annually by the Chief Investment Officers.  In addition, we offer certain strategies that utilize more comprehensive ESG guidelines such as our Carbon Efficiency Strategy.

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CARBON EFFICIENCY STRATEGY - Investment Guidelines

We analyze both a company's carbon emissions per revenue and the extent to which they manage the carbon emissions risk inherent in their business. We call these scores Carbon Intensity and Carbon Readiness respectively. Both scores are sector relative. Carbon intensity is defined as the greenhouse gas emissions per unit of sales. It is a component of our proprietary Carbon Intensity Score. Companies with high carbon intensity receive a low score and vice versa. This score determines the direction of the strategy's weight (e.g. over/under the index weight). Companies with high carbon intensity and a low score are a candidate to under-weight relative to the benchmark weight. Our proprietary Carbon Readiness Score measures the extent to which companies manage carbon emissions risk inherent in their business relative to other companies in their sector. A high score indicates a company addresses its carbon risks in a positive way setting the upper bound of the company's overweight. This score determines the magnitude of the over or under-weight of the strategy. The maximum over/under-weight is ±20bps relative to the benchmark weight. Exposures are limited to within 0.50% of the benchmark (Russell 3000® Index).

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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PROXY VOTING

Mellon has adopted the general proxy voting policy of The Bank of New York Mellon Corporation's ("BNY Mellon") Proxy Voting and Governance Committee (PVGC).

01.6. Additional information [Optional].

          
        
I confirm I have read and understood the Accountability tab for SG 01 I confirm I have read and understood the Accountability tab for SG 01

SG 01 CC. Climate risk (Not Applicable)


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

Mellon's Responsible Investment Statement highlights our overall ESG approach. Formalized environmental factors, as they pertain to our Carbon Efficiency Strategy, are detailed via the corresponding hyperlink.

Mellon has adopted the proxy voting policy of The Bank of New York Mellon Corporation’s (“BNY Mellon”) Proxy Voting and Governance Committee.  

As an extension of our parent company's culture, we are happy to share the BNY Mellon Corporate Social Responsibility Overview and the BNY Mellon Corporate Social Responsibility Highlights Overview.

BNY Mellon Corporate Social Responsibility Overview

https://www.bnymellon.com/us/en/who-we-are/csr/

BNY Mellon Corporate Social Responsibility Long Term Goals

https://www.bnymellon.com/us/en/newsroom/news/company-news/bny-mellon-unveils-ambitious-2016-2020-corporate-social-responsibility-long-term-goals.jsp

 


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

At Mellon, individual portfolio managers may manage multiple accounts for multiple clients.  Mellon has adopted various policies and procedures in order to manage potential conflicts between funds or with other types of accounts, and to help ensure that no one client, regardless of type, is intentionally favored at the expense of another.  Such policies and procedures include, but are not limited to: trade operations, best execution, trade order aggregation and allocation, short sales, cross-trading, media communications, code of conduct, personal securities trading, proxy voting, and purchases of securities from affiliated underwriters.  We also maintain a conflicts matrix that lists potential side-by-side conflicts, compliance policies and procedures reasonably designed to mitigate such conflicts of interest (where applicable), and controls that are designed to mitigate the conflicts identified. In addition, Mellon utilizes several of its committees as forums for reviewing and identifying potential or actual conflicts of interest. 

03.3. Additional information. [Optional]

Mellon maintains separate and distinct portfolio management areas that are focused on select strategies (i.e., Active Equity, Active Fixed Income, Equity Indexing, Multi-Factor Equity, Index and Multi-Factor Fixed Income and Asset Allocation).  Portfolio management decisions and trading are not made for specific accounts but rather for portfolio groups (i.e. model-based), which include all accounts in a specific strategy.  In addition, steps have been taken to limit each portfolio management area’s access to those systems that house information which is necessary to manage its own set of portfolios. 

Mellon's Chief Compliance Officer (“CCO”) evaluates the extent of potential conflicts within the firm annually, and more frequently as warranted, to help ensure corresponding procedures and executive oversights are appropriate given the products and portfolio management structure of the firm.  The CCO also determines if such potential conflicts of interests have been appropriately disclosed.


SG 04. Identifying incidents occurring within portfolios (Private)


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