In April 2009 Emil Efthimides, the manager of environmental, social, and governance (ESG) data for Bloomberg L.P., joined a panel at a conference in San Francisco to promote a new product. His financial data services company was adding sustainability metrics to the real-time corporate profiles accessed by the 300,000-odd subscribers to Bloomberg’s computer terminals. More than 100 ESG measures and ratios would be available on their screens at no extra charge.
Only about one in 10 of Bloomberg’s customers factored ESG criteria into their investment decisions. Now at least they could see the information, Efthimides said. His comment at the meeting is memorable: "Maybe they’ll dabble in it or even request the information from companies. It will become a virtuous cycle."
Three years earlier, none of the executives at Bloomberg understood one word about ESG metrics. The largest privately owned companies in the US, like Bloomberg, spurned sustainability reporting when they even knew what it was.
Bloomberg is admired on Wall Street for giving customers what they want while still managing to be innovative. In September 2008 Bloomberg contracted with the Carbon Disclosure Project to post corporate greenhouse gas data on its terminals. Later on, the company acquired New Energy Finance, a carbon-market and clean energy investment researcher and analyst. The London-based subsidiary became an operating unit of Bloomberg in December 2009.
Bloomberg hired a consultant and launched a colourful communications program to get environmental activism moving internally. The strategy is called BGreen, and 78% of employees consider it to be an integral part of the Bloomberg culture. (The company hires about 12,900 people worldwide.) Bloomberg’s ESG initiatives are featured in a Harvard Business School case study published in August 2010. The review shows how committed employees are able to create social change in a large corporation.
After a couple of years of practice, on 4 May 2011, Bloomberg was ready to go public with their first report. ‘The Sustainable Edge’ covers all operations globally, including joint ventures and leased facilities, for calendar year 2010 when most data collection was automated.
The PDF file is startling: 238 pages. The length is bloated by an annex. The body of the report is a manageable 76 pages, laid out in a roomy landscape format (wider than tall). The contents cover environmental operations, supply chain initiatives, social investments, and employee issues. Environmental efficiency measures predominate though.
One page in the PDF presents a bulleted list of the issues management identified as being the most material and others that are the most challenging. Two pages are needed to tabulate 37 primary indicators. The columns give a definition of each indicator, three consecutive years of the relevant data, and the percent change. (An interactive version of the table can be queued up on the company’s sustainability web page.) These three pages alone constitute best practice in sustainability reporting.
The annex cannot be ignored, with the exception of a stupefying 27-page carbon emissions calculation. The appendix contains 23 distinct items or sets of documents. The Global Reporting Initiative content index resides there, along with other essentials. For instance, the invaluable BGreen Operations Guideline is reprinted in its 44-page entirety.
Elsewhere in the annex, 15 one-page reports review the sustainability performance of individual departments (for example, travel, asset management, and purchasing). The write-ups are uniform. Each gives the departmental overview along with the year’s wins, challenges, and future initiatives. No corporate sustainability report provides more thorough summaries of environmental initiatives on a departmental level.
Bloomberg’s business is based on providing vital analytical data in a clear way to those who need it the most. The sustainability report is similarly data-rich. But the report excels by perfectly pairing text with quantitative information.
Here and there, the Bloomberg report does sound prideful. Mainly the copy sticks to the hard facts, elaborating on the accompanying graphs, tables, and charts. The reward for readers is a lucid discussion of what the company wished to accomplish, how they did it or why they failed, and what remains to be done.
The report does not beat around the bush. The company’s economic interest is served by reducing energy consumption in data centres, Bloomberg’s largest power use. Efforts in this regard are tempered: "…our appetite for aggressive change is constrained as we cannot risk any disruptions."
Guidelines are in place to push public transit in lieu of cars and use rail instead of air on frequently travelled short hauls. Yet travel is admittedly not seen as a candidate for reduction because it is a key component of Bloomberg’s sales tactics.
In a similar vein, purchasing asks other departments to consider environmentally preferable products but will not automatically buy them if the premium is five percent or less.
The straight talk is refreshing not depressing. The tone of the report is practical, constructive, and farsighted. An admission is made that sustainability issues have not been integrated into standard investment analysis. About this Bloomberg says they intend to stay the course and lead the way for the financial community.
‘The Sustainability Edge’ adheres to the Global Reporting Initiative’s G3 guidelines. It meets B+ level requirements, separately checked by GRI. An A mark seems just out of reach, mainly because Bloomberg L.P. is privately owned. The company does not disclose financial details about itself.
One page of the report explains the engagement with stakeholders. The non-profit social investment group Ceres organised a meeting of 13 people, not named. Senior executives who manage Bloomberg’s sustainability, human resources, and philanthropy efforts attended. The recommendations from the advisory group are summarised in the report and are said to have been taken into account.
The company’s greenhouse gas emissions are calculated using the protocol from the World Resources Institute and World Business Council on Sustainable Development. The results are assured by Cventure, carbon emissions consultants. Otherwise, the issue of ESG data assurance is not broached.
On five separate occasions the report brags: "Bloomberg is the world's most trusted source of information for businesses and professionals." Although the claim is unsupported, any attempt to prove the contrary will be futile. Bloomberg’s broadcast and publishing arms are whisker clean.
Though billionaire owner Michael Bloomberg has stepped aside, the company cannot escape his shadow, nor would they likely choose to. Mike has earned comparatively green credentials since his election in 2001 as the mayor of New York City. Recently he burnished his image with a $50 million donation to the Sierra Club’s on-going campaign to close coal-fired power plants in the US.
Still, Mayor Bloomberg sacrificed a measurable degree of credibility by backsliding on term limits so he could run for a third time against the wishes of New York voters. He then poured a reported $90 million of his personal fortune into winning the race, a sum the New York Times calls "without equal in the history of municipal politics."
Hubris is a persistent threat to Bloomberg’s corporate reputation.
1. Share your views on assurance not just for your own data but also for the ESG information you gather from publicly traded companies.
2. If all that extra material is going in next time, number the pages on the index to the annex.
3. Pop some corks. Your first-time report surpasses what few others have accomplished after many tries.
William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters. He also edits Crosslands Bulletin www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues