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Bloomberg L.P.

Service Provider Reporting Framework 2017

You are in Research and Data Provision » Research/process level

Research/process level

RDP 02. Sources for research and/or rating

02.1. Indicate the types of sources you use for research and/or ratings of companies. Tick all that apply.

          Metadata derived from News

02.2. Additional information. [OPTIONAL]

RDP 03. Stakeholder input

03.1. Describe how you actively include inputs and information, wherever possible, from relevant stakeholders or interested parties, in the research process or in reaching assessment conclusions.

          Bloomberg regularly considers input from NGOs (e.g. SASB, GRI), Investor Relations (IR) teams at public companies issuing CSR reports and product users (e.g. investment community) in prioritizing the ESG data we gather and analyze. Below are a few examples of our stakeholder engagement:
•	Bloomberg Intelligence (BI) ESG Industry primers, rolled out in 2016, use metrics laid out by SASB (Sustainability Accounting Standards Board) as a base for our research and inform ESG metrics displayed for each sector on the Terminal.
•	BI analysts participate on company socially responsible investment analyst calls and hold regular conferences and webinars to discuss data collection and industry reporting best-practices.
•	Bloomberg New Energy Finance (BNEF) maintains a comprehensive green bond data set. In addition to internal reviews, this data is reviewed quarterly with underwriters as an additional quality control measure; BNEF has NDAs with some of the largest issuers of consumer finance for energy efficiency and renewable energy installations, which allows us to aggregate individual loan data for in-depth analysis. 
•	BNEF’s clean energy team works with hundreds of stakeholders across the industry to provide accurate asset level data on clean energy; the clean energy team conducts numerous pricing surveys where buyers and sellers submit pricing data confidentially, which is aggregated into an index that provides pricing transparency for clean energy technologies.
•	Bloomberg Sustainable Finance Product team’s collaboration with the National Association of Real Estate Investment Trusts (NAREIT) has helped revise our Real Estate Investment Trust (REIT) data sets.
•	We collaborated with Bank of America Merrill Lynch on their Green Bond Index.

03.2. Additional information. [OPTIONAL]

RDP 04. ESG factors in research methodology

04.1. Indicate whether your research/rating methodology incorporates ESG factors.

04.2. If yes, describe how ESG factors are incorporated into your research/rating methodology.

          The Terminal integrates company ESG data and scores into the Bloomberg Fundamental Analysis (FA) screen to help investors leverage ESG data in their company analysis. We also offer several analytic functions and tools that integrate into an investor’s workflow: 
1.	Our ESG page offers investors the first opportunity to easily compare company reported sustainability performance over time, against peers and against third party ESG scores.  
The Relative Value function can be used to evaluate the performance of a company’s third-party ESG ranking scores (e.g. RobecoSAM) alongside key financial metrics relative to peers. 
2.	The Equity Screening (EQS) function helps screen equities against specific criteria (e.g. geography, industry and values-based or negative screening) and enables users to build custom models and scores combining financial data, ESG information and third party scores. 
3.	The Portfolio Analytics function (PORT) helps assess the ESG risks at the portfolio level and compare against a benchmark portfolio. Users can drill down to identify which sectors/companies may be driving the ESG performance of the portfolio. 
4.	Several Excel-based analytic models (XLTP) enable deeper evaluation of ESG risks (e.g. Portfolio Carbon Footprinting Tool, ESG Scorecard, Executive Compensation Analyzer, ESG Strategic Country Risk Tool). 

Bloomberg Intelligence (BI) provides analysis on industries, companies and expert topics, delivering key data and interactive charting from BI analysts with an average of seventeen years of experience in their given industry. Topics include government, legal and regulatory issues, as well as environmental, social and governance (ESG) industry performance and trends. BI ESG also offers industry and topic primers to help investors easily identify material ESG risks and opportunities and separate the signals from the noise. 

Bloomberg New Energy Finance (BNEF) conducts additional in-depth research on energy issues and provides unique analysis, tools and data for decision makers driving change in the energy system. BNEF’s sectoral products provide financial, economic and policy analysis, as well as news and a comprehensive database of assets, investments, companies and equipment in the clean energy space, while the regional products provide a comprehensive view on the transformation of the energy system by region.

04.4. Additional information. [OPTIONAL]

RDP 05. Material ESG issues in research and/or rating

05.1. Describe how you ensure that your research and/or ratings capture material ESG issues.

          The ESG fields that display on a company's ESG page are informed by SASB guidance on materiality and also take into account data availability and disclosure trends in the sector.  We collaborated with SASB to map their materiality indicators to Bloomberg ESG data fields. A SASB excel template was created as a guide to help decision-making based on the most material ESG factors.

RDP 06. Up-to-date assessment and ratings

06.1. Describe how you ensure your assessment of companies is up-to-date and that new information is incorporated or new assessments are conducted at reasonable intervals.

          Company data is updated annually and on an additional ad-hoc basis if a company releases a new report with ESG data outside of its standard reporting cycle.  We wait until all of a company's expected reports are released and process our ESG data at the same time. For example, companies typically will release their annual report 2-3 months after fiscal year, but the Corporate Social Responsibility (CSR) report often comes out several months after the annual report.  In that case we will wait for the CSR report to be released and process all of a company's ESG data then. This system provides for maximum accuracy and efficiency and avoids seemingly painting a company as not reporting specific ESG data when in fact most of the data is reported at a later time. 

The data team also conducts quality checks on the company data where anomalies or missing data may be the result of a company error and engages with the company to ensure we have the latest information.  

We also provide real-time news alerts for 150 ESG topics, such as, environmental risks and opportunities, human rights, product responsibility, board independence and diversity.

RDP 07. Balanced research and assessment

07.1. Indicate how you ensure a balanced approach to your research methodology and assessing/rating of companies. Tick all that apply and explain your approach to each option.

Type of indicators

Explain your approach

          We capture companies' quantitative performance on ESG metrics along with qualitative information about their ESG policies.

Explain your approach

          While our emphasis is on performance metrics, our Green Bonds Principles indicators are a good example of capturing management processes.

Explain your approach

          We capture company historical performance on each quantitative metric reported by the company to help investors make decisions based on the company's performance trajectory.

Explain your approach

          We only evaluate companies on the level of ESG disclosure. The methodology evaluates a company based on the proportion of fields reported to the most relevant data points for each sector.

07.2. Additional information. [OPTIONAL]

RDP 08. Consistency and comparability

08.1. Describe how you ensure that your criteria and methodology are consistent and applied equally to comparable subjects of research.

          Our methodology is consistently applied to all companies within a sector.  In addition, Bloomberg Intelligence’s curation of most material data sets by industry shows where there is consistency in company reported data by sector.

RDP 09. Emerging ESG issues and trends (Private)

RDP 10. Client use of outputs (Private)