From Complexity to Confidence With ESG Data Transparency
Originally published on bloomberg.com
This article is reproduced from Environmental Finance.
Bloomberg’s head of sustainable finance solutions Patricia Torres and ESG enterprise data content head Caroline Ward outline how they are working together to provide a comprehensive suite of ESG data solutions on and off the desktop.
Environmental Finance: What is your business goal when it comes to ESG data?
Patricia Torres: I oversee the ESG strategy for the Bloomberg Terminal. My goal is to ensure that we are exceeding our clients’ expectations about how they can use ESG data. My team’s first priority is ensuring our clients can access all the data and analytics they need for their business, including company-reported data, Bloomberg proprietary datasets, and third-party data.
Secondly, we provide seamless integration of these datasets across Bloomberg solutions so clients can efficiently build and execute their ESG investment strategies.
Manage sustainability-related risks and opportunities
Caroline Ward: I look after Bloomberg’s Enterprise Data ESG business, which makes ESG datasets accessible for enterprise use via Bloomberg Data License. Patricia and I share a mutual goal to create consistency across every channel while offering our customers optionality. For example, customers want to share data across their entire enterprise in a scalable way, so I spend a lot of time ensuring consistency when it comes to historical data, metadata, and more. This enables our customers to take their Bloomberg ESG datasets and distribute them into data lakes or management systems so people across an organisation can readily access the same information.
EF: What sets Bloomberg’s ESG data offering apart?
PT: Hands down, it’s data quality and transparency. Our company reported ESG data on 15,000 companies representing more than 80% of company operations and at least 80% of the company workforce. Our ESG analysts run over 5,000 sophisticated, multilayer quality control systems to ensure all data conforms to the highest standards. Our customers can drill down to the source documents to validate any datapoint.
We provide visibility into factors that are applied to Bloomberg’s ESG scores and the weighting of those factors. Our scores are based on a quant model; they are not subject to conflicts of interest and are not judged by analysts. They are based on company reported data and we do not use proxies to supplement a lack of data governance.
It is clear to our users what data has been disclosed by the company, what hasn’t, and how well a company performs on disclosure.
EF: What enhancements have you recently made?
PT: Regulation is a big driver. There are 30 taxonomies in development as well as global frameworks. We are working with policy makers and industry associations to inform our development to support interoperability of ESG-based regulations worldwide.
CW: Another major challenge is incorporating ESG data from multiple sources. Bloomberg’s Data License Plus ESG Manager solution provides firms with the flexibility to satisfy multi-vendor ESG requirements, maintain consistent data across their organisation, and enrich it with Bloomberg Data License content.
EF: What are your priorities for the year ahead?
PT: Biodiversity and impact investing are emerging as big themes. Our customers are expected to set biodiversity policies, monitor investment impact/exposure to biodiversity loss, create biodiversity-themed investment products, align with TNFD, and report to their regulator. To help clients meet these requirements, we are enhancing our supply chain and commodity exposure data so users can understand the flow of commodities driving nature loss. We are also working on analytics that identify whether a company operates in locations of high impact or dependency risks, as well as capturing nature-related disclosures.
CW: A priority for my team is helping customers navigate the sustainable debt market. Bloomberg evaluates the credentials of active fixed income instruments across corporate bonds, loans, preferreds, munis and structured products, then offers timely and comprehensive sustainability data for investors seeking to direct capital to sustainable activities.
We are also focused on helping clients analyse fund investments according to specific ESG goals. We have recently launched a Funds Data Solution which combines Bloomberg’s holdings data with its premium security-level data to deliver objective, granular fund-level ESG Scores & Analytics so customers can determine if a fund truly meets sustainability criteria. ESG is getting more complex, especially as new taxonomies and frameworks emerge.
EF: What is one thing you want your customers to know?
PT: ESG is getting more complex, especially as new taxonomies and global frameworks emerge. We focus on data transparency and consistency so you can cut through the complexity and act with confidence.
This article was published in conjunction with Environmental Finance’s 2023 ESG Data Guide – view Bloomberg’s entry here.
