Resumen de Integrating sustainability into capital markets: Bloomberg LP and ESG's quantitative legitimacy.
The rise in prominence of environmental, social, and governance data has been driven in large part by a growing interest among investors who seek to gain an edge through the incorporation of such data in their investment decision-making. There are, however, several significant obstacles to the integration of ESG data into mainstream investing analysis. Perhaps most important, while finance today is a fundamentally quantitative discipline, ESG is often qualitative. Moreover, the ESG data that is available is incomplete and inconsistent, due largely to a reliance on voluntary reporting by individual companies. In short, ESG has not yet earned its quantitative legitimacy in the eyes of the investor community. Nevertheless, recent work in the area of stranded asset values has provided Bloomberg LP, a leading provider of financial data and analytics, an opportunity to 'bridge theory and practice' by translating the stranded assets framework into a first-cut valuation tool designed for mainstream financial analysts. The tool offers a quantitative introduction to an ESG issue that the authors believe will eventually become an important focus of many investment decision-makers' analysis. While the tool continues to evolve in analytical sophistication, the authors 'preview' it here in its early form as one step towards Bloomberg's broader vision of 'sustainable finance,' and the company's role in supporting the quantitative maturation of ESG through the twin engines of standardization and disclosure. [ABSTRACT FROM AUTHOR]
