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August 11, 2020 at 03:49 PM
(Image: Shutterstock)
In yet another sign of the growing popularity of sustainable investing, Bloomberg is launching proprietary ESG scores.
The initial offering includes environmental and social, or ES, scores for 252 oil and gas companies, and governance (board composition) scores for more than 4,300 companies in multiple industries. The scores are available to Bloomberg terminal users.
Bloomberg said it’s starting ES scores with the oil and gas sector because these companies typically provide “stronger disclosure data” than others. Also, they 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.Related: DOL’s ESG Proposal Blasted in Public Comments
The board composition (or Governance) scores assesses board diversity, as well as the board supervision of corporate management and any risks within a board’s structure.
Boards are ranked across four key focus areas: diversity, tenure, over-boarding (when a board member sits on too many individual boards of directors) and independence.
“ESG data is critical to the investment process,” said Patricia Torres, global head of Bloomberg Sustainable Finance Solutions, in a statement. “By providing transparent ESG data and scores, we are helping investors decode raw data that is otherwise hard to compare across companies.”
The scores also provide companies with “a valuable, quantitative and normalized benchmark” to highlight their own ESG performance, and they give investment and financial professionals “transparent scoring methodologies and underlying data” that help them make informed decisions, said Torres.
