Bloomberg has revealed US equity benchmark capabilities that will guide the construction of its new ESG index family of investment products.
The ESG index family includes the Bloomberg SASB ESG equity index for US large cap equity, and the Bloomberg SASB ESG fixed income index for investment-grade corporate bonds, Bloomberg said in a statement.
The new indices focus on industry-specific ESG factors most likely to influence the financial performance of companies.
Building on the Sustainability Accounting Standards Board’s (SASB) market-informed materiality framework, Bloomberg said it will now offer ESG policy benchmarks for asset owners and custom indices that maximise the R-Factor ESG score.
It said these offerings will help investors track companies and create sustainable, long-term value in a way that supports their fiduciary responsibilities.
“The Bloomberg SASB ESG index family is an innovative example of bringing SASB’s vision of materiality-based ESG investing to life,” said Bloomberg’s director of capital markets policy and outreach at SASB, Janine Guillot.
“We have always viewed SASB standards as important market infrastructure and a valuable tool to help integrate ESG factors into investment decision-making in a rigorous, scalable way.”
Bloomberg said it’s using R-Factor, an ESG scoring solution developed and made available to the market by State Street Global Advisors, is being used for the index family.
It said score reflects the performance of a company’s business operations and governance as it relates to financially material ESG issues, and leverages commonly accepted materiality frameworks, namely the SASB Materiality Map and region-specific corporate governance codes.
“We are pleased that Bloomberg has chosen R-Factor to power these ESG indices,” said head of ESG investments and asset stewardship for State Street Global Advisors, Rakhi Kumar.
“We developed R-Factor using SASB’s framework to provide greater transparency to companies and investors about which financially material ESG issues are driving a company’s score. This transparency allows companies to know what to manage and disclose in order to improve their performance.
“Over time, this will bring better ESG data into the market, ultimately helping build more sustainable markets.”
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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