NEW YORK, April 29, 2024 — Bloomberg launched a customizable sustainable-investment screening tool for portfolios, funds and indices. Available through the Bloomberg Terminal, the solution lets users define their own criteria and thresholds, calculate the share of holdings that meets them and identify securities requiring closer review.

The launch responds to a market in which investors and regulators use different definitions of sustainability. According to Bloomberg's product announcement, the tool is designed to make the screening logic visible instead of applying an unexplained universal label.

Users determine the screen before seeing the result

The workflow begins with an investor selecting relevant data points and setting thresholds. This allows a pension fund, asset manager or adviser to reflect a specific mandate rather than accepting a single provider-defined sustainability score. Different settings can legitimately produce different results for the same portfolio.

Customization increases control, but it also transfers responsibility to the user. A permissive threshold may include holdings that another mandate excludes, while an overly narrow rule can eliminate businesses undergoing credible transition. The output must therefore be read together with the definitions and data used to produce it.

Three groups of screening criteria

  • sustainability targets selected by the user;
  • exclusion or “no harm” criteria intended to identify conflicting activities or impacts;
  • good-governance requirements applied to issuers;
  • an alignment percentage calculated for the selected portfolio, fund or index;
  • a detailed holdings view for locating outliers and investigating the underlying evidence.

Transparency separates a screen from a label

A result is more useful when an analyst can trace it back to an issuer, metric and threshold. Bloomberg said the detailed view helps users find holdings that fall outside the selected criteria. That supports review and documentation, but it does not determine whether a security is suitable or whether an investment product satisfies every applicable rule.

Data availability can differ by company, market and reporting period. Estimates, self-reported information and changing methodologies can affect comparability. Users should examine missing values and source dates rather than interpreting a calculated percentage as a complete statement about environmental or social performance.

A text-free physical infographic sends varied investment tiles through three adjustable sustainability, no-harm and governance gates into an aligned vessel and separate amber review trays
Three adjustable gates show why a screening result depends on the user's definitions, thresholds and underlying portfolio data.

The tool supports several regulatory workflows

Bloomberg cited possible use in assessments related to the European Union's MiFID II suitability rules and Sustainable Finance Disclosure Regulation, the United Arab Emirates sustainable-finance framework, forthcoming UK Financial Conduct Authority disclosure requirements and future U.S. Securities and Exchange Commission guidance on ESG disclosure and fund labelling.

Supporting a compliance workflow is not the same as certifying compliance. Legal obligations depend on jurisdiction, product structure, client classification, disclosure date and regulatory interpretation. Firms remain responsible for governance, documentation and professional advice.

Reported fund data expands the evidence base

The release said Bloomberg captured European ESG Template information for 26,000 funds, covering more than 345 data points. That information can help users examine fund-reported characteristics, including minimum EU Taxonomy alignment, and can streamline comparisons across Article 8 and Article 9 products.

Fund-reported data still requires care. Reporting coverage and calculation methods may change, and two funds with similar headline classifications can have different holdings and objectives. The screening tool helps expose those differences; it does not remove the need to read formal disclosures.

Terminal and enterprise uses share the same foundation

Bloomberg made the interactive screen available on the Terminal and described access to underlying sustainable-finance data through its Data License service. The first supports analysts making individual assessments, while the second can feed organisation-wide portfolio construction, monitoring and reporting systems.

Enterprise deployment requires consistent definitions, permissions, version control and exception handling. Firms should record which criteria were active at a decision date so that a later reviewer can reproduce the screen and understand why a holding was included or flagged.

About Bloomberg

Bloomberg provides business and financial information, data, news and technology to participants in global markets. The new screening tool combines configurable criteria with Bloomberg's issuer and fund datasets to support analysis; it does not constitute investment, legal or regulatory advice.

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URL: https://www.bloomberg.com/company/press/bloomberg-launches-customizable-and-transparent-sustainable-investment-screening-tool/