Putting it all Together: ESG Integration

As investors, policymakers and citizens seek out more information on sustainability, Bloomberg is providing new and expanded environmental, social and governance (ESG) data sets, tools, analysis and news.

Our latest tools make it faster and easier to integrate ESG measures into the investment workflow. While interest in integrating ESG data into the investment process is skyrocketing, putting it into practice can be difficult for all but the most well-resourced or ESG focused firms.

In traditional equity investing, investors refer to standardized, comparable and meaningful financial measures like earnings and credit spreads to drive decisions on how to allocate their resources. However, incorporating ESG measures into the investment workflow is not as straightforward.

Because ESG data disclosure is voluntary and companies do not report this information on a regular basis, if at all, the data alone provides an incomplete picture of ESG activity in the global economy. ESG ratings, based on this same sparse data, vary widely among ratings providers and can provide conflicting scores. Consequently, investors need a large amount of additional context in order to interpret ESG data in a way that can help them evaluate opportunities and spot risks.

A handful of large investment firms have addressed this challenge by building internal tools, available across the organization, that score companies on ESG metrics they care about. In 2019, Bloomberg made it possible for all Terminal users to do the same thing — without needing to develop an expensive in-house system.

We expanded our proprietary Bloomberg Query Language (BQL) coverage universe to run on ESG data, allowing asset managers to use an advanced API query for ESG data in Excel and build their own internal dashboards and ESG scores within BQuant, Bloomberg’s quantitative analytics system. Now asset managers can get more out of our best-in-class research publishing tools, Research Management Solutions (RMS), which encourage structure, consistency, systematic data capture and reporting capabilities of internal ESG research and engagement notes, and build dashboards that reflect how they view ESG measures and what they are trying to achieve. These dashboards provide full transparency into the investor’s decision-making process, linking to internal notes and data, market data, fundamental data, news and third-party research and can be shared as interactive visualizations with other Bloomberg users.

Bloomberg was founded on the idea that making markets more transparent empowers investors, fuels entrepreneurs and supports economic growth. With our latest tools designed to clarify ESG data and make it faster and easier to evaluate market activity, we hope to empower more investors to incorporate sustainability considerations into their investment strategies.

For more on Bloomberg’s ESG products and services, view the 2019 Impact Report.