Painting the full picture

Patricia Torres, Global Head of Sustainable Finance Solutions at Bloomberg talks to Shanny Basar about wider horizons, innovation and diversity.

Patricia Torres, Global Head of Sustainable Finance Solutions at Bloomberg, always tells women they need to be open to different opportunities. For example, when her former manager asked her to move from Brazil to London to take on her current role, she never thought that it was going to have such an impact on her life and personal growth.

Torres said: “I initially said no but he kept trying and eventually he convinced me. Even when you don’t believe in yourself, you have to know that other people are believing in you.”

That belief has paid off as Torres leads a team that she describes as focussed on offering the most comprehensive and unique environmental, social and governance data, analytics, research, and indices to the financial community.

“I ensure that when people log into Bloomberg, they see all the ESG data they need to make intelligent decisions,” she added.

Bloomberg onboards strong data from company reports, as well as third-party ESG data from providers such as MSCI and Sustainalytics. In October Sustainalytics’ ESG Research and Ratings became available via the Bloomberg Terminal. Sustainalytics’ Controversies Research reports and data on nearly 18,000 companies were also added to the Bloomberg Terminal.

Shila Wattamwar, Executive Director of ESG Product Strategy at Sustainalytics, said in a statement: “By taking a material ESG issue focus with our ratings, Sustainalytics offers Bloomberg Terminal users a forward-looking view of companies’ ESG risks as well as a lens into how well they manage these risks.”

Torres said she wants to be agnostic in her role and serve clients by making sure that the data they want and need is available on the Bloomberg Terminal.

“So if a client loves Sustainalytics I’m going to bring those data sets to the Terminal,” she added. “In total, we offer almost 1,000 data points of third-party content which is a big part of the strategy in my business plan.”

Proprietary data
In addition to providing third-party data, Bloomberg creates unique proprietary scores using its 700-plus research analysts across Bloomberg Intelligence and BloombergNEF. The huge team of data analysts go through corporate social responsibility reports, collect data, ensure it is comparable and represents at least 80% of the operations and 80% of the workforce. Bloomberg covers nearly 12,000 companies representing 88% of the global equity market capitalization.

“For Bloomberg scores, we started scoring companies separately on the E, S and G with an industry specific materiality which we think is unique,” said Torres.

In order to promote transparency on how a score was derived, Bloomberg provides its materiality map, methodologies and ensures that all the data can be traced to the original document. Through the scores, a client can see how a company has performed based on the data they have disclosed, and importantly, the percentage of data that was disclosed versus what was expected.

Torres said disclosure is improving as every player in the market is becoming more aware of ESG and pushing each other to do a better job – including regulators, NGOs and investors.

“However, in the S&P 500 only 60% of the companies have published total greenhouse gas emissions for the fiscal year 2020,” she added. “Everybody is aware of the importance of climate change, we have heard from scientists and have recently had COP 26, so it is critical we fill the data gap in the market.”

In order to fill the data gap, Torres believes it has to be simple for companies to disclose ESG data alongside their annual reports. She asked: “Why are we still allowing companies to disclose ESG data three, six or nine months after the financial data comes out?”

In addition disclosure should be timely, accurate and verified by a third party or an internal audit team. She also asked: “How many people are putting numbers out there that are incorrect?”

The data also has to be consistent and machine readable as CSR reports can have 400 to 500 pages of unstructured data. Torres said: “We need to ensure easier and seamless access to data, and that is not the case today, which is why Bloomberg is so active in this space.”

To overcome greenwashing Bloomberg goes back to specific frameworks such as the EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR). Torres continued that Bloomberg offers analytics to help combat greenwashing, including a data solution that automates the four-step due diligence process of Taxonomy alignment, and mapping SFDR’s Principal Adverse Impact requirements to ESG data on nearly 12,000 companies.

“We are also launching indices aligned to the Paris agreement which will allow firms to benchmark their sustainable funds against a sustainable benchmark,” she added. “To avoid greenwashing you have to give the market tools and good data.”

Torres explained that when she looked at Bloomberg in 2001, she thought it was the most innovative fintech firm and at the core of every single customer on the buy and sell side, which she still believes today.

“Moreover, Mike Bloomberg is an inspiration as a philanthropist, business leader and successful politician,” she said. “He has given $1 billion to fight climate change which is transforming the lives of millions of people in 810 cities and 170 countries.”

She puts her success down to energy, drive and visible passion.

“I’m passionate about what we do at Bloomberg, I’m passionate about ESG, and I’m passionate about working towards a greater purpose – to bring a more sustainable future to our industry and the world at large,” Torres added.

Another factor behind her success is that she has worked in many different places and with many different people, which has allowed her to keep learning. Torres is Portuguese but has worked in Latin America as well as London.

She said: “You have to be curious, keep learning, be open and have confidence in yourself because other people do. So don’t put yourself down, which can be a tendency for women.”

In order to improve gender diversity, she believes it is not enough for the financial industry to put policies in place to ensure equitable promotions – although this is a good start. She said real change will only come when companies hold all leaders accountable for meeting diversity goals and institute material incentives for leaders to create an inclusive and supportive culture that encourages participation from women at all levels.

Bloomberg releases a Gender Equality Index (the GEI) every year and a persistent trend is a lack of pipeline.

“Women are very well represented at the base but as soon as you go up the ladder there are fewer women represented,”Torres said. “There is a correlation between the number of women in senior positions and the people coming in, so companies need to invest in their pipeline and provide opportunities in revenue generating roles.”

The 2021 Bloomberg Gender-Equality Index found that a record number of companies disclosed their data, and the quality of disclosure was continuing to improve. On average, GEI members’ boards are 29% women, and 61% have a Chief Diversity Officer or an executive with the primary responsibility of diversity and inclusion. The companies have an average of 39% of women in revenue-producing roles and more than half, 52%, require a gender diverse slate of candidates for management positions.

Torres pleaded to women to stay in financial services to continue driving diversity.

“I would tell women not to leave the financial industry because we need you!” she said. “We need to ensure that the next generation can look up and see us and so that we can all help support a much more diverse agenda in the near future.”

When recruiting Torres considers other measures of diversity such as age and ethnicity, as well as gender.

She said: “We hired five new people this year and it is so amazing to look around the table and see different ethnicities, the balance between women and men and ages, which is important because we know that diversity drives performance.”

©Markets Media Europe 2021




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