Bloomberg Inc. is opening up about its sustainability efforts in the hopes that other large companies will follow suit, and that more companies will take advantage of the sustainability and renewable energy ventures the company has invested in following the success of its own sustainability goals.
During a recent event for public company directors in New York, Bloomberg chairman Peter Grauer and global sustainability head Curtis Ravenel detailed Bloomberg’s successes, which began after Ravenel made a pitch for the company to become carbon neutral during a leadership retreat in 2007. The company prioritized sustainability with Ravenel reporting directly to Grauer – who was then the company CEO – and started with what Ravenel called “the low-hanging fruit.”
“If you’re looking to reduce your environmental impact, what you’ve got to target is waste,” said Ravenel to the audience of public company directors. “If you have waste, you have inefficiency – which probably means there’s money to save either through processes or direct savings.”
Grauer, who is also the lead director at Davita, said he knew Ravenel was onto something big after one of the company’s annual events at Brasserie in New York City.
As I walked up Lexington Avenue… every goddamn light in the building was on – on a Sunday night,” said Grauer. “I called [Ravenel] and said, ‘if the boss is wandering around Midtown and sees this, we are in deep trouble.
Bloomberg is owned by New York City Mayor and resident, Michael R. Bloomberg.
Grauer says the company’s three-pronged approach to sustainability was partly altruistic and partly commercial from the start. One pillar of the plan involved looking at Bloomberg’s practices and relationships and the broader impact on the communities where the company’s businesses operate. Second, said Grauer, Bloomberg wanted to be in a position where the company could educate their colleagues in the business world about being sensitive to environmental issues and how they live their day-to-day lives. And third, the company wanted to “put a stake in the ground” regarding product initiatives and commercial opportunities around collecting environmental, social and governance (ESG) data and providing analytics that would enrich Bloomberg’s core product.
Ravenel said the company’s decision to be transparent about the financial dynamics of its sustainability efforts on the company were also a major part of the push to create and commoditize ESG data. At Bloomberg, according to their most recent sustainability report, the company’s focus on energy efficiency at its operations around the world led the company to reduce its carbon footprint by 50% by 2011, which was two years ahead of its 2013 goal. And, Bloomberg also beat – by a factor of 10 – its target of achieving a return on its investments of at least 15%.
The company’s hope, said Ravenel, is that other large companies follow its lead on prioritizing sustainability – improving energy efficiency and adopting formalized environmental, social and governance annual reporting – and that other companies will take advantage of the data Bloomberg will mine on sustainability.
Despite the fact that the company is private, Bloomberg voluntarily started publishing sustainability reports on its website in 2009 and updating them every year. Last year, the company launched a media channel entirely devoted to sustainability.
And when it comes to the company’s ESG analytics products, the amount of data is growing by leaps and bounds. Back when the company first starting researching an ESG data project, said Ravenel, they found 700 companies with some level of sustainability data out of the 20,000 most actively-traded securities in the world. Today, their system has 5,300 companies and Ravenel said there were probably about 6,000 total. And beyond more companies disclosing sustainability data, Ravenel said the amount of funds under management that use ESG data in some form tripled in value from 2005 to 2012.
“The most significant thing we’ve seen is that every major financial institution signed the United Nations principles for responsible investing,” he said.
That means companies such as BlackRock, Pimco, AllianceBernstein, Goldman Sachs and others have agreed to integrate ESG data into their investment analysis decisions during the past six months, he added.
And, Bloomberg also financially supports the “SASB” which stands for Sustainability Accounting Standards Board. The group works to bring more clarity to accounting standards regarding sustainability.
Eventually, the group hopes its outreach to public companies will lead to a more standardized method of accounting for sustainability projects companies undertake, said Ravenel.