Bloomberg Professional Services
This article was written by Christian Lelong, Product Manager for Sustainable Finance Data Solutions and Nadia Humphreys, Global Head of Sustainable Finance Data Solutions at Bloomberg.
Sustainability data, whether described as ESG, climate, or non-financial information can reveal risks and opportunities that traditional financial statements can miss. In this blog post, we examine the key challenges investors face in interpreting company disclosures and explore strategies to address them.
Assessing sustainability risks and opportunities in a portfolio is more complex than traditional financial analysis. First, a lack of standardization of what companies disclose and how they measure it results in hundreds of different metrics that investors have to navigate. For example, most companies have discretion over the types of greenhouse gases they include in their reporting, the choice of conversion factors and units of reporting, and their approach to calculate indirect emissions. Expert judgement is required to bring out the required information from such a complex dataset. As a result, calculating the average profit margin of a portfolio is far easier than measuring its carbon footprint.
Second, the usefulness of the selected metrics is limited if some companies report them inconsistently or not at all. Over 4,000 companies in the Bloomberg coverage report the amount of water they source, of which less than 3,000 disclose the amount they actually consume, and only a fraction disclose whether the water came from a river or the local municipality, or whether it was recycled.
The adoption of mandatory reporting standards under the Corporate Sustainability Reporting Directive (CSRD) in Europe and the International Sustainability Standards Board (ISSB) in other jurisdictions should significantly improve the quality of non-financial disclosures from thousands of companies around the world. As of May 2025, over 1,000 companies have disclosed CSRD information in their FY2024 reports, with data now accessible via the Bloomberg Terminal and Data License.
Tackling gaps in sustainability data
However, for the foreseeable future, investors will continue to rely on legacy voluntary disclosures. To help investors face this large, sparsely populated dataset, Bloomberg provides a curated set of waterfall fields (i.e. providing the best available data from a prioritized sequence of fields) and derived metrics, and standardizes the different units of measure used by companies around the world.
Our standard dataset for entity-level sustainability disclosures, covering a universe of companies equivalent to ~95% of global market cap, illustrates the challenges of voluntary reporting. The absence of binding requirements and a lack of standardization result in a large number of related but ultimately distinct disclosures for a given metric, together with low levels of disclosure (Figure 1). More specifically, sustainability analysts must navigate between hundreds of fields, knowing that environmental fields are reported by 1 in 5 entities, while social metrics are available for 1 entity in 3.
The extent of disclosure depends on the topic and type of business activity (see Figure 2. Note: These differences in company focus will be captured by the double materiality assessment under CSRD). For instance, a mining company’s investors may prioritize details about community engagement and water consumption, while a hardware manufacturer might emphasize aspects of the circular economy. In contrast, an entertainment company with a smaller environmental impact may have fewer data points to report.
The level of disclosure varies by company size. For instance, large companies with revenues in excess of US$10 billion report twice as many environmental metrics as smaller firms with revenues under US$100 million. Large companies tend to attract the most sophisticated investors and are better positioned to allocate more resources toward measuring sustainability performance.
The level of disclosure also varies by region (Figures 3 and 4). Based on Bloomberg coverage of over 16,000 companies, the average field completeness is similar in Europe and APAC. The former has a slight edge on climate metrics while the latter comes out slightly ahead in the total number of environmental and social datapoints (108 versus 104 populated fields). Meanwhile, firms in North America lag behind with approximately 20% fewer datapoints across those categories, but US regulations and long-standing practice result in more governance datapoints than firms in other regions.
Investor demand for sustainability data has contributed to a twofold increase in the rate of disclosures over the past 20 years (Figure 5). Investors seeking to understand the impact of sustainability on financial performance ask for more transparency, but voluntary reporting has shortcomings. The standardization of sustainability reporting around mandatory reporting frameworks like CSRD and IFRS S1 and S2 should result in more useful datasets.
As a result, companies should receive fewer bilateral data requests from their investors, suppliers and customers. In due course, investors may be able to do more with less, as interest in non-mandatory disclosures with lower completeness should fade over time.
How can we help?
Bloomberg offers an extensive breadth of sustainability data via the Terminal, Data License and Data License Plus ESG Manager,covering over 16,000 companies and nearly 94% of global market capitalization. Bloomberg also provides a wide breadth of regulatory tools that assist in disclosure, reporting and analysis of sustainable finance data to help navigate developing requirements. More information is available here.