Bloomberg has launched its propriety environmental, social and governance (ESG) scores.
This initial offering includes Environmental and Social (ES) scores for 252 companies in the oil and gas sector, and Board Composition scores for more than 4,300 companies across multiple industries.
“ESG data is critical to the investment process. We see an opportunity to provide transparent and complete scoring methodologies along with the underlying data in order to support investment and finance professionals make informed decisions,” says Patricia Torres, global head of Bloomberg Sustainable Finance Solutions. “By providing transparent ESG data and scores, we are helping investors decode raw data that is otherwise hard to compare across companies. For corporates, these scores offer a valuable, quantitative and normalized benchmark that will easily highlight their ESG performance.”
The ES scores will begin with the oil and gas sector as there is typically stronger disclosure data from these companies, which account for more than half of carbon dioxide emissions related to fuel combustion and generate 15% of global energy-related greenhouse gas emissions, according to the International Energy Agency (IEA). The governance scores will start with board composition as there has been increased scrutiny on the role of corporate boards in providing proper leadership and oversight over long-term strategic performance.
The Board Composition scores enable investors to assess how well a board is positioned to provide diverse perspectives and supervision of management, as well as to assess potential risks in the current board structure. The quantitative model is designed by Bloomberg governance specialists and uses Bloomberg’s management and board level data. The scores rank the relative performance of companies across four key focus areas of diversity, tenure, overboarding and independence.
The ES scores provide a data-driven measure of corporate environmental and social performance that investors can use to quickly evaluate performance across a range of financially material, business-relevant and industry-specific key issues, such as climate change and health and safety, and assess company activities relative to industry peers.
Bloomberg’s proprietary quant model is informed by sustainability and industry frameworks, research and analysis to reduce noise, normalize data and address size bias and disclosure gaps.
More information on the data can be found here.