Sunday, March 3, 2024

A Pioneering Bloomberg Tool Bridges the Gap in Impact Investing


A new Bloomberg tool is the first of its kind designed to aid investors in evaluating the influence of a company’s operations on the United Nations’ Sustainable Development Goals.

As COP28 prepares to get underway, Bloomberg launches an innovative new tool to help measure impact investments. The market for impact investing has reached a milestone, surpassing $1 trillion in assets globally as of 2021. This development is crucial, considering the United Nations Sustainable Development Group’s estimation of a yearly funding shortfall between two and a half to three trillion dollars in developing countries to achieve the United Nations’ Sustainable Development Goals (SDGs) by 2030.

The tool makes Bloomberg the first data provider to build a tool based on the United Nations Environmental Programme Finance Initiative (UNEP FI) and aims to provide investors with enhanced clarity, assisting them in channeling their capital into sustainable assets and evaluating the private sector’s alignment with the SDGs. The UNEP FI Sector Impact Map, a component of UNEP FI’s holistic impact methodology, connects more than 500 sector activities to 38 impact topics and the SDGs.

According to Bloomberg, it helps distinguish the positive and negative impacts a company might have on the environment, people, and economic development. This resource has been applied to approximately 50,000 public companies utilizing Bloomberg’s detailed segment revenue classification across its Environmental, Social, and Governance (ESG) data offerings.

wall street
Photo Courtesy LoLo

“Bloomberg’s ESG data, research, and analytics help clients mitigate risk and comply with new and emerging regulatory requirements, and pursue investments aligned with their sustainability commitments,” Patricia Torres, Global Head of Sustainable Finance Solutions at Bloomberg, said in a statement. She emphasized the tool’s significance, noting that it enables customers to effectively bridge the gap between ESG integration and impact investing, fostering greater clarity and transparency.

The introduction of the SDG Impact assessments by Bloomberg offers investors additional market data for corporate engagement and security selection. Bloomberg’s comprehensive data coverage allows for benchmarking and fund classification, crucial in an evolving regulatory reporting landscape. The new data mapping tool, available on the Bloomberg Terminal and via Bloomberg Data License for enterprise use, is poised to become an instrumental resource in adhering to sustainable finance standards and legislative frameworks.

Careen Abb, SDGs and Impact Lead at UNEP FI, also expressed enthusiasm about the initiative, saying, “UNEP FI works with the finance industry to mainstream impact analysis and management in business and finance, to help close the SDG funding gap.” Abb noted UNEP FI’s commitment to developing impact management tools and resources across sustainable development’s three pillars, mapping related negative and positive impacts. She expressed delight at the utilization of these resources to mainstream impact management and accelerate the transition to an economy conducive to achieving the SDGs.

Bloomberg’s ESG data, research, and analytics encompass a wide range of areas, including regulatory compliance, carbon emissions, sustainable debt, scores, indices, and climate risk.

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