Financial data provider, Bloomberg, will widen coverage of environmental, social and governance (ESG) factors to include a larger group of NZX-listed firms.
Bloomberg provides ESG analysis on just over 20 of NZX companies but would more than double that for the next financial year, according to a spokesperson for the firm.
“We currently have 21 of the 50 companies listed on the NZX with an ESG Disclosure Score,” the Bloomberg spokesperson said. “By the end of this year or early next year, you will see the score for all since most [NZ firms financial year ends in] June.”
The Bloomberg ESG analysis, based on a proprietary scoring system covering vast sets of data, is included as part of the information provider’s Sustainable Finance Solutions.
According to the group’s website, the ESG service “enables investors across asset classes, company management and other market participants to understand their risks and opportunities comprehensively, including factors associated with intangible and reputational value”.
“Bloomberg provides ESG data on more than 11,000 companies with over 700 environmental, social and governance indicators from company-sourced filings and third-party information, covering virtually the entire publicly investable universe,” the website says.
NZX companies have been coming under increasing pressure to lift ESG disclosure standards in line with the burgeoning global trend. For example, last December the NZX released an ESG guide for member firms to prompt better disclosure across those factors.
“All over the world, companies and entities are coming to report on ESG and responsible investment,” the NZX guide says. “These trends reflect the need to shift to a low carbon economy, increasing business vulnerability to the effects of climate change and other environmental and social factors, a generational changeover and institutional forces.”
At the time, Hamish Macdonald, NZX head of policy, said ESG reporting was inconsistent.
“A few of NZ’s largest companies are reporting ESG issues really well,” Macdonald said last year. He said while Z Energy, Air NZ, Sanford and Tourism Holdings, for example, had strong ESG disclosure standards there was a long tail of smaller companies yet to address the issue.
The ESG trend has also fueled a boom for researchers in the space with groups such as Bloomberg rival Thomsson Reuters, index provider MSCI, and European-headquartered Sustainalytics (now part-owned by research house, Morningstar).