Pulling the threads together
In an increasingly fragmented sustainability landscape, and with insights to be found across Bloomberg’s vast universe of data, research and news, workflow integration is a priority for its sustainability data business, says Lauren Smart
Environmental Finance: What are you seeing as some of the key trends driving demand for sustainable data?
Lauren Smart: Climate change will remain central, with investors looking for more granular insights into how the energy transition is playing out across different jurisdictions, alongside a deeper understanding of physical risks. We also see growing demand for information on the impact of the artificial intelligence boom and the sustainability challenges the sector faces.
EF: How are your clients thinking about the evolving dynamics of the energy transition?
LS: While the overall direction of travel is the same, the energy transition isn’t evolving in the same way across different countries. Jurisdictions are pursuing different strategies depending on their specific energy mix, technology availability and approach to energy security.
Historically, our clients have relied on emissions data to assess progress towards decarbonisation, but increasingly they are complementing this with more forward-looking insights into the energy transition.
These might include data on companies’ green capex and how it’s evolving over time, as well as information on their transition plans – not just whether a plan exists, but how credible it is. Understanding regional climate policy and the outlook for low-carbon technologies is also incredibly important – BloombergNEF (BNEF) provides data, analysis and forecasting on these topics. At Bloomberg, we bring together all these different pieces of information to help clients assess the trajectory and pace at which different companies might be transitioning, in the context of the specific policies and technologies at the country and regional levels.
EF: What about artificial intelligence as a sustainability theme? How are you approaching that in terms of data and insight?
LS: We're looking at it very holistically. At Bloomberg, we have a wealth of data that helps clients understand the financing associated with data centres, as well as their location, energy and water consumption, etc. Through Bloomberg Intelligence, we also provide detailed research on a range of sustainability-related themes, including community impacts linked to data centre development, water stress and demand for critical minerals. We also look into emerging topics such as the role of AI in the defence sector, an area of growing interest to many investors.
EF: Attitudes to sustainable finance and sustainability policy more broadly have become more differentiated by jurisdiction in recent years. How are your clients navigating that?
LS: The landscape is fragmented and far more complex than it used to be. Countries are moving at different paces, and a range of factors are at play across markets, including diverging political views towards sustainable finance.
But, while we've got very different regional trends, the underlying systemic drivers for sustainable finance haven't gone away. Climate change and extreme weather events, population-related strains and consumption patterns, and the resulting pressures on resource availability are all very much alive and well.
However, the policy response is far more nuanced from one region to another. The landscape is more complex and therefore requires more than simple data points. It demands deep research, an understanding of news flows and policy sentiment in different markets, and forward-looking data. It requires breadth as well as depth.
EF: How are you responding to that in your sustainable finance data product offering?
LS: We recognise that investors managing large investment portfolios may not have the time to read all the in-depth reports and the deep dives into regional policies and technology trends produced by BNEF. That’s why we’re focused on bringing that content and research into the workflows and tools investors use every day, enabling them to benefit from BNEF insights through the scores, metrics and interfaces we provide.
Another example is with ASKB, our conversational AI interface. Take data centres, a topic that touches on so many different areas, and for which we provide data, news and analytics. ASKB enables our clients to ask questions on everything from shareholder resolutions and site selection concerns to water stress, or the impact of copper prices, drawing together insights from across our organisation to answer complex, cross-cutting questions.
EF: What are your plans for further developing your offering?
LS: Integrating insights across workflows is a big focus for us. At Bloomberg, we provide multiple tools that can be applied to sustainable investment, whether for portfolio analysis or stress-testing. We also provide indices, enterprise data solutions and some phenomenal mapping tools.
Our objective is to bring relevant insights to where the client is. Sometimes that's within specialist workflows, such as sustainable investing or climate risk management. Increasingly, however, we’re seeing clients access this information without necessarily thinking of it as sustainability-related.
This has been an interesting finding with ASKB. We see clients who may never have sought sustainability information, because they don’t necessarily identify as sustainable investors, accessing insights from Bloomberg’s sustainability datasets and research through searches on ASKB. That’s incredibly powerful and demonstrates how many of the megatrends and structural shifts long recognised within the sustainable finance community are becoming increasingly relevant to investors more broadly.
Lauren Smart is global head of sustainable finance at Bloomberg. For more information, see: https://professional.bloomberg.com/products/bloomberg-terminal/sustainable-finance/
