Putting transparency first
Since its foundation in 1981, Bloomberg has focused on getting its customers the best data possible. Curtis Ravenel, its Global Head of Sustainable Business & Finance, explains how that mission extends to ESG
EF: How has the ESG landscape changed over the last years?
Demand for more ESG data – environmental, social and governance –has accelerated over the last several years. At Bloomberg, we were ahead of the curve, serving early adopter investors for the past decade. Now, demand for more complete, consistent, and high quality data to drive investment decisions is becoming mainstream. This requires companies to be more transparent and disclose relevant information.
We see the sustainable investing market continuing to expand from roughly $23 trillion AUM in 2016 to approximately $40 trillion by 2020. There are a few drivers for this increased demand. First, mounting evidence shows that performance on broader ESG issues is tied to financial performance. Second, as new customers — especially millennials and women — become more active in investing, they push investment managers to offer investment strategies and products that reflect their core beliefs. And, third, regulators are increasingly paying attention to this topic, too, creating an additional push for more sustainable finance products.
EF: How are investors’ demands for ESG data and products changing?
Asset owners are demanding ESG data in order to support their long-term strategies. Specifically, they want to ensure that what their clients are investing today will benefit them long term and well into retirement.
Further, many firms feel they have a fiduciary responsibility to not only do good but also do well for the end investors and shareholders. Because of this, there needs to be proof that sustainable investments are also sound investments. That’s why our customers are looking to Bloomberg to provide more and better ESG-related data, news, analytics and products.
EF: How do Bloomberg's ESG products fit into its broader commitment to ESG?
Everything we do at Bloomberg is based on Mike Bloomberg’s leadership. Since the company was founded in 1981, we’ve been guided by the principle that transparent markets empower investors, fuel entrepreneurs, and support economic growth. Better data leads to better decisions. As the world changes, we are committed to making sure that our clients have the data they need to understand and navigate those changes and act on them.
Our foundation Bloomberg Philanthropies leads numerous initiatives, such as Beyond Carbon, America’s Pledge and Vibrant Oceans, to combat climate change. We’re also working on efforts to improve corporate climate disclosures through the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB); and drive investment in climate solutions through the Climate Finance Leadership Initiative (CFLI).
Working towards positive change is deeply embedded in our culture. And it’s not just doing good for the sake of it – but because it is good for business. Our ESG data offering is, hence, a natural continuation of our commitment to sustainability and a response to growing client needs.
EF: Bloomberg more than 900 fields of ESG data on 11,500 companies. What does this data cover, how is it collected, and how do you ensure its accuracy?
We provide two types of ESG data and analytics; some are primarily informational in nature, and others are more explicitly used to influence investment decisions. We’re constantly working to expand our universe of high-quality ESG data and analytical tools to further the field of sustainable finance. We also offer the Bloomberg Gender-Equality Index which covers more than 60 data points on companies’ gender-related statistics and policies, and provide third-party data and scores.
Our sustainable finance products go beyond raw data and scores to include more contextual analysis: BloombergNEF (BNEF) provides research and long-term forecasts on industries impacted by the energy transition, and Bloomberg Intelligence (BI) delivers in-depth analysis on industries and companies. Our News teams cover the sustainable finance beat to keep our readers and listeners abreast of the latest trends.
EF: How do you make this data available to customers and how is that valuable? For market participants making investment choices, ESG information has to not only be high-quality and contextual, it has to be instantly actionable. That’s why we make our ESG products easily accessible at every stage of the investment workflow.
For example, on the Bloomberg Terminal, ESG data is displayed alongside fundamental data on security description screens, so analysts can integrate ESG risks and opportunities into their fundamental analysis. Other Terminal functions enable investors to analyze, monitor and report on portfolios, as well as research and invest in ESG fund and index products.
We also make machine-readable ESG data available via our Enterprise Data feeds, to be pulled directly into in-house trading, analytics and operations systems. This helps our clients ensure that consistent data is used throughout the firm, minimizing errors caused by data discrepancies. The data can also be downloaded in formats suitable for quantitative analysis, reducing the time and cost of acquiring, cleansing and normalizing data before it can be used.
In the index space, Bloomberg offers the Bloomberg Barclays MSCI ESG Fixed Income Indices, the market's first fixed income index family to incorporate measures of ESG risk.