Data provider Bloomberg has launched its proprietary enviromental, social and governance (ESG) scores, which include offering 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.
The ESG scores are fully transparent, allowing investors the ability to examine the methodology and the company-reported data underlying each score. In addition, the company provides a number of sustainable finance solutions, offering data-driven insights to help investors integrate ESG throughout the full investment process.
The E and S 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.
The scores provide a data-driven measure of corporate E and S 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.
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 scores rank the relative performance of companies across the four key focus areas of diversity, tenure, overboarding and independence, and they enable investors to assess how well a board is positioned to provide diverse perspectives and supervision of management and to assess potential risks in the current board structure.
“ESG data is critical to the investment process,” 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.”