We heard at the 2010 EHS Management Forum about how Bloomberg is now posting environmental, social and governance (ESG) performance data on the terminals its 300,000 customers use to make investment decisions every day.
Bloomberg went live with this data in July 2009 and it is reported in the April issue of Fast Company magazine that “in the second half of 2010, 5,000 unique customers in 29 countries accessed more than 50 million ESG indicators via Bloomberg’s screens.” This is a 29% increase over first half of last year.
According to the article and Bloomberg’s sustainability director, Curtis Ravenel, they expect that trend to continue. Investors are finally waking up to the idea that good performance in these areas can impact shareholder value. Bloomberg gleans this data from many different sources and provides it to their clients as just one more subject area to be used to evaluate investment decisions. Ravenel states that “ESG ought to be in SEC-required company filings, and until it is, it won’t be viewed as material by a lot of people.
“Of course, a lot of the financial data in there now aren’t material either.”
While performance data may provide important bits of information for investors, what is really needed to determine whether they are material is to analyze how the ESG initiatives impact the cash flow of the company. Full valuation audits of ESG initiatives could answer that question. Understanding how ESG initiatives can impact shareholder value provides information that is critical for strategic planning and gives environmental, health and safety (EHS), and sustainability leaders the evidence they need to push projects forward in a meaningful manner.
Does your company have any idea of how your initiatives are impacting shareholder value? Do you just do a simple payback analysis and leave it at that?
Showing the link to the price of the stock is going to be critical for fully integrating sustainability in our corporations. Because, let’s face it, a company that is not producing value for its shareholders is not sustainable.