Welcome to Data Spotlightour series of insights from Bloomberg’s 8,000+ corporate data sets available on data.bloomberg.com via Data License.
In this edition of our series, we focus on data insights related to sustainable finance: sustainably linked bonds, ESG backtesting, the European ESG template and Bloomberg’s updated greenhouse gas model estimates to take financed emissions into account.
1. Systematic tracking of the performance of sustainability-linked bonds
Sustainability-linked bonds (SLBs) are a relatively new and popular type of sustainable debt instruments, accounting for nearly 8% of total sustainable bond issuance in 2023.
SLBs aim to align the issuer’s interests with climate and environmental objectives as their structural features are tied to predefined sustainability/ESG objectives. To help investors evaluate SLB performance, Bloomberg’s Sustainable Debt Data Solution provides a number of data points such as the Key Performance Indicator (KPI) name and the Sustainable Performance Target (SPT) value. The depth and breadth of this data set is critical as conducting a systematic analysis of SLBs has historically been a difficult undertaking due to the differences in objectives and performance indicators for different issuers.
Empower your work with monthly insights into Enterprise Data & Technology
Sign up for the newsletter
Table 1 shows how investors can monitor the performance indicators as well as the current performance status of a particular bond in detail.
Bloomberg clients can also combine Bloomberg’s sustainable debt data with our ESG company data, which covers 15,000 companies, to track the performance and transparency of a company’s ESG goals. Figure 1 shows how Enel, an Italian energy company, is on track to have more than 60% of the renewable capacity needed to avoid triggering a penalty on its 2027 SLB.
Theme: sustainability debt
Roll: Fixed Income Portfolio Managers, Risk Managers, ESG Analysts
Bloomberg records: Sustainable debt, Sustainable debt (per security), Company ESG reports
2. ESG backtesting: Uncover industry insights and dispel criticism
With the increasing prevalence of ESG data being reported around the world today, it can be difficult to understand which metrics are financially important for which sectors. To cut through the noise, a robust, transparent valuation model can help investors understand which ESG factors influence financial performance. When evaluating ESG scores, it is important to understand the inputs and methodologies underlying these scores to enable defensible investment decisions.
Bloomberg provides data-driven and fully transparent ESG scores and percentiles for over 14,000 companies. Bloomberg’s ratings are based on company-reported data and do not use proxies to compensate for a lack of data management. It is clear to users what data the company has disclosed, what data has not been disclosed, and how well a company performs when it comes to disclosure. Charts 1 and 2 illustrate the diversity of ESG performance across companies across regions and sectors.
Backtesting ESG scores and their components provides insights into market performance, such as the positive correlation between environmental practices and financial returns, as shown in Figure 3 for the oil and gas sector.
Monitoring how markets respond to ESG criteria can also help investors integrate ESG alongside traditional financial criteria to enable more informed decision-making when reviewing companies.
Further insights into ESG backtesting can be found here this blog post. To learn more about all of Bloomberg’s ESG solutions, please visit our website.
Theme: IT G
Roll: ESG portfolio managers, ESG analysts
Bloomberg dataset: ESG scores and transparency
3. European ESG template: Create transparency in sustainable practices
ESG considerations are becoming increasingly important for fund investors and there is a growing need for transparent and standardized ESG reporting. The European ESG Template (EET) has become a key tool and offers fund managers a comprehensive framework for disclosing their ESG performance. By providing a consistent and comparable data set, the EET is not only a regulatory requirement, but also a powerful, standardized reference for investors. In addition, it supports asset managers in complying with MiFID II investor protection.
An example question that investors can answer with EET data is: What sustainability policies does a fund follow? As shown in Figure 1, most Article 9 funds intend to invest at least 70% in securities with environmental or social characteristics.
It is worth noting that compared to Article 8 funds, which should promote environmental or social characteristics and have good governance practices, Article 9 funds have a positive impact on society or the environment through sustainable investments and at their core non-financial objective of their offer.
These and many other questions can be answered with Bloomberg ESG regulatory funds reported Data covering more than 27,000 unique funds with more than 350 data fields, as shown in Figure 2. This comprehensive data set provides investors with a detailed understanding of fund policies and their implementation when it comes to ESG investing.
Theme: IT G
Roll: Fund analysts, ESG analysts, portfolio managers, consultants
Bloomberg dataset: ESG regulatory funds reported
4. Updated greenhouse gas model estimates: financed emissions
Bloomberg uses a model to estimate financed emissions using a bottom-up approach and following guidelines from the Partnership for Carbon Accounting Financials (PCAF). This model leverages Bloomberg’s extensive data on financial firms’ loan book, long-term investments and inventory data.
The model output populates Scope 3 GHG estimates for financial companies and also updates two new data fields that split financed emissions into two buckets: financed emissions resulting from a company’s loan book and long-term investments; and financed issuances resulting from a company’s assets under management.
Chart 1 shows Bloomberg’s reporting of emissions financed by greenhouse gas (Scope 3) emissions by industry.
Theme: GHG Scope 3 – Financed emissions
Roll: ESG analysts, portfolio managers, risk managers
Bloomberg dataset: Carbon emissions
Would you like to find out more about our data offering? Bloomberg’s Enterprise Data business is transforming the way customers derive value from data by providing the broadest coverage and highest data quality in the industry.
Bloomberg’s OneData approach makes all data on data.bloomberg.com easy to find. above Data License, ready to use and delivered to a customer’s hosting provider or data center via APIs in the cloud. Our data management solutions aggregate, organize and connect your data to make it accessible through various delivery mechanisms.