Business and financial markets information service provider giant Bloomberg announced today that it is launching a proprietary ESG scoring service. The new service will comprise of Environmental and Social (ES) scores, as well as board composition scores.
Initially, the ES scoring system will be available for coverage of the oil and gas industry with 252 companies rated at launch, while the board composition ratings will include 4,300 companies across multiple sectors.
ES scores are intended to provide investors with a data-driven measure of corporate environmental and social performance, enabling them to rapidly evaluate performance across a range of financially material, business-relevant and industry-specific key issues, including climate change and health and safety. The system will also allow for quantitative assessment of company activities relative to industry peers.
According to Bloomberg, the company is launching ES scores with oil and gas as this sector accounts for more than half of carbon dioxide emissions related to fuel combustion, and 15% of global energy-related greenhouse gas (GHG) emissions as per IEA data, while companies in the sector also tend to provide more fulsome disclosure regarding environmental sustainability efforts and progress.
Bloomberg’s Board Composition scores tool assesses board diversity, supervision of management, and evaluates potential risks in the current board structure. The company stated that the Board Composition tool’s quantitative model was designed by Bloomberg governance specialists and utilizes Bloomberg’s management and board level data. The service provides relative performance rankings across four key focus areas, including diversity, tenure, overboarding and independence.
Patricia Torres, Global Head of Bloomberg Sustainable Finance Solutions, said:
“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. 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.”