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Environmental and
Social Scores
Methodology and Field Information
A Bloomberg Professional Services Offering
Bloomberg Terminal
ESG
Bloomberg ESG
Environmental and Social Scores
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Contents
Introduction .................................................................................................................................................................. 2
Approach to Bloomberg Environmental and Social Scores ............................................................................................. 3
Issue Priorities and Score Template Inputs ..................................................................................................................... 5
Score Framework and Issue Priorities ........................................................................................................................ 8
Score Framework and Structure ..................................................................................................................................... 8
Issue Priorities ................................................................................................................................................................ 9
Scoring Methodology ................................................................................................................................................. 11
Principles of Quantitative ES Scores Methodology ....................................................................................................... 11
Parametric Approach to Scoring ................................................................................................................................... 11
Field Attributes.............................................................................................................................................................. 13
Field Transformation ..................................................................................................................................................... 14
Field Scoring ................................................................................................................................................................ 14
Score Aggregation ...................................................................................................................................................... 25
Sub-Issue Scores ......................................................................................................................................................... 25
Issue Scores and Disclosure Factors ............................................................................................................................ 25
Technical Description ................................................................................................................................................... 26
Pillar Scores ................................................................................................................................................................. 30
Pillar Disclosure ............................................................................................................................................................ 31
Enhancements and Limitations ................................................................................................................................. 32
Endnote ........................................................................................................................................................................ 33
Version Release Date
Description
December 2020
Methodology for Environmental and Social Scores
Bloomberg ESG
Environmental and Social Scores
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Introduction
In recent years, environmental, social and governance (ESG) issues have increasingly influenced and impacted
business decisions. Businesses need to manage the effects of climate change and shifting societal norms, among
other key issues, making transparency, disclosure, and measurability of ESG issues paramount. Advances in
corporate reporting on ESG issues should help investors and other stakeholders better understand how businesses
can and will respond to this dynamic landscape – but only if the information can be evaluated easily and
transparently.
In this document, Bloomberg outlines the methodology for proprietary Environmental and Social Scores (ES Scores).
This initiative, through which we will release scores for all sectors, is grounded in Bloomberg’s decade-long effort to
champion useful, comparable, and consistent sustainability disclosures and their use in financial decision-making.
The increased availability of accurate and timely information helps to drive growth in all markets. Sustainable finance
and investing will likewise benefit from standardized, transparent company data. As a steward of this information,
Bloomberg plays a key role in facilitating corporate ESG reporting. Bloomberg also serves as a central point of
contact in maintaining a platform to support the analytics, including developing measures for ensuring the integrity
and comparability of the data.
Data-driven scores are a powerful vehicle for making ESG data accessible and intelligible to investors and other
interested parties. By introducing transparent, data-driven ESG Scores, Bloomberg is highlighting the value of
sustainability information and promoting improved disclosure from a wide range of businesses around the world.
In addition to ES Scores, Board Composition Scores have been released as a first step toward comprehensive
governance (G) scores. This effort will integrate seamlessly with Bloomberg’s data, analytics and research solutions,
Bloomberg news and media platforms, and the company’s support for market infrastructure to improve both the
supply and demand side of sustainable finance.
In developing proprietary scores, Bloomberg’s work has been informed by investors who flagged the critical challenge
of deploying company-reported ESG data in the investment decision-making process. Bloomberg ESG scores
summarize corporate sustainability data and simplify the integration of ESG analysis into business and investment
analysis.
Bloomberg’s ES Scores have been developed by a group of specialized cross-business contributors in research and
consultation with external experts and through active engagement with clients to learn from their observations and
experiences.
Key Contributors to Bloomberg’s Environmental and Social (ES) Scores
Sustainable Finance Solutions Global Data
Quantitative Research Index Research
Bloomberg Intelligence BloombergNEF
Bloomberg Law and Government
Bloomberg ESG
Environmental and Social Scores
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Approach to Bloomberg Environmental and Social Scores
Bloomberg’s rationale for developing ES Scores is driven by the growing demand for ESG information, the
emergence of global sustainability frameworks, and the specific nature of reported ESG data and performance
scores. Sustainability frameworks, such as those of the Sustainability Accounting Standards Board (SASB) and the
Task Force on Climate-related Financial Disclosures (TCFD),
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are emblematic of the shift toward viewing business
relevance and financial materiality as the key considerations for selecting industry-specific ESG themes and data for
use in decision-making and reporting.
Bloomberg’s goal in developing the ES Scores is to evaluate and present ESG data so that it can be: 1) integrated
into analysis more easily, 2) made more comparable within specific industries, 3) used to identify leaders and
laggards, and 4) deployed to complement or validate research-driven performance scores. The key challenge that
Bloomberg’s users face in this effort is the overwhelming number of company- and third-party-reported ESG fields,
including both the sources and the data types. Looking at energy and climate change alone, for example, Bloomberg
offers almost 200 different company-reported data fields. Users of sustainability information are also faced with non-
comparable disclosures and substantial disclosure gaps within and across firms.
Finally, while frameworks and reporting recommendations are useful, interpreting and deriving insights from this
guidance requires substantial research, informed judgment, and analytical resources. Research-driven scores have
thus far stood as the main summary indicators of performance for investment managers, asset owners, corporate
leaders, and others. However, such scores often diverge for reasons that are not necessarily clear to users of this
information.
In order to address these challenges, Bloomberg has brought a range of resources and assets together in developing
the ES Scores. The goals and processes include the following:
• Improving ESG data in existing data fields with more precision, coverage, and history and through new
industry-specific datasets
• Providing an organizing structure and taxonomy to clarify hierarchies and ES issues and to translate from
reporting frameworks
• Offering guidance on materiality to highlight and rank key issues by industry
• Leveraging fundamental research to provide context and practical insights
• Using quantitative analysis to incorporate standing guidelines and principles and to aggregate data for
analytical use.
Bloomberg’s ESG Scores bring together various data sources offered on the Bloomberg Terminal® service,
principally company-reported sustainability information and financial fundamentals data, with proprietary research
assets and analytics, such as Bloomberg Intelligence ESG research and the Bloomberg Industry Classification
Standard (BICS).
Bloomberg’s ES Scores product is supported by evidence, research, consultation, and analytical rigor. Bloomberg
Intelligence’s dedicated ESG team conducts top-down materiality assessments by industry; these are detailed in this
document. A broader, bottom-up consultation assesses existing and new data to determine their suitability for
describing and quantifying material sustainability issues. Rigorous quantitative techniques are then applied to ensure
that meaningful signals are reflected in the Scores.
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Bloomberg ESG
Environmental and Social Scores
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Bloomberg’s Process for ES Scores Product Development
External Frameworks
External frameworks used to prioritize sustainability performance
drivers and to group issues
Key Issue Research
Research on key issues through both proprietary analysis and
external consultation to specify the data fields best aligned with
priority themes
ESG Data Analysis
Analysis of existing ESG data, especially disclosure and suitability,
to describe key sustainability issues and activity metrics for
normalization
New ESG Fields
Development and collection of new ESG data fields to fill gaps in
industry-specific sustainability information
Taxonomy/Grouping
Grouping of sustainability themes and corresponding data fields
Issue Priorities
Research, evaluation, and assignment of issue priorities by industry
Data Attributes
Assignment of field qualifiers for importance of disclosure, polarity
(e.g., positive = better or worse), fit, consistency, and quality of data
fields
Quantitative Data Survey
Quantitative evaluation of quality and coverage of ESG data
Field Score
Deployment of field-level, industry-specific scoring methodologies
Aggregation and Weighting
Incorporation of weighting schema to aggregate from Bloomberg
Field Scores up to Sub-Issues, Issues, and Pillars
Review and Feedback
Internal score review and feedback to calibrate and refine industry
scoring models
