“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.”
Bloomberg has launched a screening tool that helps users assess portfolios, funds, and indices based on sustainability criteria and customized thresholds.
Available on Bloomberg Terminal, the tool can be used both for making investment decisions and to help clients with regulatory compliance.
How to use Bloomberg’s ESG screening tool
Bloomberg said the 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.
Investors can 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.
Investors can also use it to check 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 labeling.
Additionally, investors can leverage the solution to assess whether a fund meets classification under the SFDR framework, and the percentage of sustainable investment reported by the fund itself.
“Sustainability objectives vary from investor to investor”
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.”
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.
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.
