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New solution enables investors to screen portfolios, funds, and indices against their own set of sustainability criteria
Bloomberg announced the launch of a new tool that helps investors assess portfolios, funds and indices based on sustainability criteria and thresholds customized by the user. Available on the Bloomberg Terminal, the solution facilitates a transparent screening process and can be used both for making investment decisions and to help clients with regulatory compliance.
With the diversification of sustainable investment strategies, investors are looking for easy and reliable ways to understand if investment products align with specific sustainability criteria. Regulators across the globe also increasingly set baselines for companies to be considered as sustainable, and require investors to assess if the companies they invest in are meeting these thresholds. Bloomberg’s new tool provides an easy and transparent way for investors to understand to what extent a portfolio, fund or index meets their expectations and sustainability criteria predetermined by them.
Patricia Torres, Global Head of Sustainable Finance Solutions at Bloomberg, said: “Sustainability objectives vary from investor to investor, and from product to product. It can be difficult to fully understand whether a portfolio, fund or index meets your own definition of a sustainable investment. This new Bloomberg tool provides clarity and empowers the user to customize sustainable investment criteria to determine if portfolios, funds, or indices meet their requirements with confidence. Based on Bloomberg’s extensive range of company ESG data, proprietary metrics and scores, the tool enables investors to assess investments in a comparable and scalable way.”
The screening process is entirely customized by users, who input their investment preferences by selecting from a wide range of criteria and calibrating precise thresholds for the three following categories: sustainability targets, exclusion or “no harm” criteria, and good governance requirements. The solution then calculates a percentage figure that reveals how much of the portfolio, fund or index is aligned with the user’s criteria, and provides a detailed list view of all holdings to quickly detect any outliers.
In addition to using the solution for investment purposes, investors can also use it to check, based on their own definitions, if funds align with regulatory obligations, including the EU’s MiFID II suitability rules and Sustainable Finance Disclosure Regulation (SFDR), the United Arab Emirates’ new sustainable finance framework, the UK FCA’s forthcoming sustainability disclosure requirements, and future SEC guidance on ESG disclosures and fund labelling.
The solution could also be used by investors to help assess whether a fund meets classification under the SFDR framework, and the percentage of sustainable investment reported by the fund itself. Bloomberg streamlines the screening process for Article 8 and 9 funds by providing access to SFDR fund-reported data for 26,000 funds captured within the European ESG Template (EET), covering more than 345 data points including a fund’s minimum EU Taxonomy alignment.
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Bloomberg’s Sustainable Finance Data License offering provides enterprise-wide access to the underlying data feeding this new tool, for investors to use in their sustainable investment construction. Via Data License, clients can access a company’s potential Sustainable Development Goal (SDG) impact and SFDR Principal Adverse Impact sector percentile performance, alongside both positive and negative revenue-based screening.