Episode Summary
“The slowdown in certain business activities [in response to the coronavirus pandemic] has shed a light on what things might look like in a less carbon-intensive world, which is certainly interesting.”
– Eric Kane, Senior Environmental, Social and Governance (ESG) Analyst for Bloomberg Intelligence
Companies are increasingly interested in improving their Environmental, Social and Governance (ESG) strength, but in order to do so, they need information to fuel their decisions. Bloomberg has a well-established reputation for providing business intelligence of all kinds, but their ESG unit has been growing steadily in recent years. One key to this demand for data is that they provide complete transparency into the sources of their data.
In this conversation, Eric shares with Supply Chain Now Co-hosts Greg White and Scott Luton how companies are investing in and tracking their ESG programs:
- Using tools to benchmark where they are in terms of current emissions and to make plans to decarbonize going forward
- The implications of recent changes in business activity across all industries for the environment and the climate
- Standardized ESG procedures and best practices that are trickling down through supply chains and across industries
Episode Transcript
Intro – Amanda Luton (00:05):
It’s time for supply chain. Now broadcasting live from the supply chain capital of the country, Atlanta, Georgia, heard around the world. Supply chain now spotlights the best in all things, supply chain, the people, the technologies, the best practices, and the critical issues of the day. And now here are your hosts.
Scott Luton (00:28):
Hey, good afternoon, Scott Luton here with you in supply chain. Now welcome back to the show. Today’s episode, we’re speaking with one of the leading news providers in the world. In fact, they provide the first word in business news. This interview is part of our continuing collaboration with the automotive industry action group. In fact, today’s guest is one of the speakers at the AIAG corporate responsibility summit, so stay tuned as we look to increase your supply chain acute quick programming note. Before we get started, if you enjoyed today’s conversation, be sure to find us and subscribe wherever you get your podcasts from. We’ll welcome in my fearless cohost on today’s show. Once again, Greg white, serial supply chain, tech entrepreneur and trusted advisor. Hey Greg, how are you doing? I’m doing well. This has been a busy day. It’s been a busy day, busy day, and a busy series.
Scott Luton (01:19):
All the content we’ve been putting together for what all accounts has been a home run corporate responsibility summit. Yeah, we got to talk with Alan. Let’s see Deidre today as well. And everyone’s going to get to see their performance. Let’s call it a performance. What do you say? And it’s been great talking with uh, everyone who is, um, doing or facilitating or pleading for like initiatives that we talked about with today. So, um, look, this is a good cause. Glad to see it happen. Of course. Glad to have, um, you know, folks who, who care about contributing to this, this, uh, corporate responsibility initiative. That’s right. Lots of action focused leaders that are making things happen. So welcome in our featured guests for this segment, Mr. Eric Kane, senior ESG analysts with Bloomberg intelligence. Eric, good afternoon. Good afternoon. Thank you so much for having me. We appreciate it.
Scott Luton (02:20):
Great to connect with you. I’m sure you’ve got several full plates right now. Uh, tackling the world as seemingly changes hour by hour, if not minute by minute. So thanks for carving some time out with us. It’s my pleasure. So, uh, you know, Greg, we’re gonna, we want to get, get to know Eric A. Little better like we typically do with, with each of these episodes. So for starters, Eric, before we kinda dive into the world of Bloomberg and, and, and what you do, tell us more about who you are and where you’re from and, and maybe give us a reader’s digest version of your journey leading up to your Bloomberg role. I’d be happy to. I’ve been working in ESG
Eric Kane (03:00):
space for over a decade now. Um, I started my ESG journey, if you will, with, um, a startup at the time, uh, called innovate strategic value advisors. Uh, the company was one of the pioneers in the ESG research and rating, uh, space. It was ultimately acquired by risk metrics and then, um, ultimately by MSEI. So the work that we were doing there kind of forms the backbone of, of some of the MSEI work. Um, from there, uh, actually, uh, left the ESG sustainability space for a little while. Um, but then we emerged, uh, to help the sustainability accounting standards board, uh, get off the ground, was one of the first employees that are on the research side and, uh, initiated coverage, uh, for healthcare and financials and, and help that organization kind of develop, uh, their, their research platform, um, and was with them for, for several years. Um, and then ultimately joined Bloomberg intelligence, uh, in the fall of 2018 and I’ve been there for about a year and a half now. And my focus continues to be on ESG and I, you know, extremely happy to be in the role that I’m in now.
Scott Luton (04:22):
Hmm. So you’ve been a trouble Lazer of sorts in many ways, uh, helping organizations, it sounds like, um, you know, develop their own approach and, and this ESG space, which we should define, uh, you know, we love our acronyms and business and certainly in supply chain, ESG is environmental, social and governance. Is that right?
Eric Kane (04:44):
That is correct. Yes. And I have been very fortunate to be at a lot of great organizations, um, you know, kind of at the beginning of their journey. So I do feel like I’ve had an opportunity to, to kind of blaze a trail a little bit. Um, and you know, it’s, it’s been an exciting time. Obviously there’s a tremendous amount of growth that’s happened over the last decade or so in terms of, uh, ESG, not only in terms of the amount of information that’s available, but you know, how that information is viewed and who it’s skewed by. So it’s an extremely exciting time and I’m very fortunate to be part of the conversation.
Greg White (05:22):
Yep. So what you do is a part of Bloomberg intelligence, which is also a part of Bloomberg professional services, I think is that those two are related, correct? That is correct, yes. Yeah. And you work with a lot of companies in a lot of countries. So tell us a little bit about that, the scale of your work and then a little bit about, um, you know, what it is that specifically that you do, um, you know, and how do companies consume or
Eric Kane (05:58):
use what you provide. Sure. Happy to. So perhaps I’ll take a little bit of a step back and give a overview of Bloomberg intelligence. Um, and then can you talk about what the, what the role that the ESG team provides within that? So Bloomberg intelligence or BI as we typically refer to it as, you know, provides in depth research and data on industries and companies as well as the government ESG, uh, credit and mitigation factors. And the idea of course is that all of this information, um, is, is useful and that we’re defining really what, what can impact business decisions. So we cover over 135 industries, um, over 1900 companies. And our work is backed by over 303rd party data providers. We’re extremely fortunate and that our overall team is made up of, of over 280 research professionals. Uh, so it’s, it’s a really strong and globally oriented team.
Eric Kane (07:04):
And, and of course, as you suggested, our, our research is available, uh, to Bloomberg clients, um, on the Bloomberg terminal. Within that, uh, the ESG team really focuses on a couple kind of key areas. We develop, uh, industry specific analysis where we look at a given industry, we’ll identify issues that we ultimately think are material or impact business and we’ll provide a research on that. The research really highlights, uh, you know, what we think investors should know, um, information that we believe to be decision useful. We also look at a lot of, um, themes that we think are impacting the market. So you could think of certain examples that perhaps aren’t specific to a given, uh, industry such as, uh, you know, decarbonization and something that of course we continue to look at across multiple industries. And we also provide our clients with a sense of what’s driving, um, the ESG markets and how they’re performing.
Eric Kane (08:15):
So we do a lot of research on different ESG ETFs, for example, and compare how they’re doing well to, to their, their non ESG variance. And I think it’s important to note that the team has grown significantly in the last 18 months since I’ve been part of it. We were two when I started with five now and we continue to expand. So there’s really a lot of, um, you know, interests not only within the company but on the part of our clients. And we continue to build new data sets and new analysis and research to, to meet the demands of our clients. I see that you guys provide dashboard
Greg White (08:56):
and I know we’ve talked to several folks who have similar data. I wonder if they use your data, um, like, uh, Bruno Sarda, um, and his organization. Do they do, you know, um, so how, how do these companies use this data? I mean, it sounds like there might be a use for some of the facilitators of change as well as the companies who hope to know where they stand or know where they’re headed or, um, where to target their efforts.
Eric Kane (09:31):
Absolutely. We really see the service and the data that we provide and the research that we provide us, uh, being useful for, you know, all the parties that you just alluded to. So investors, um, and, and also, uh, you know, the, the corporates themselves who may be looking at you suggested to see how they rank, you know, relative to peers. And what some key issues they might want to focus on are. And of course there are a number of other parties, you know, everyone from, from academics to um, NGOs who utilize our data as well. So I can’t speak directly to specific clients who use the data, but in general, um, our ESG data covers, um, about 500 or so different data points, uh, for several thousand companies. So we really do think that it’s, you know, one of the most comprehensive, it’s not the most comprehensive sources of ESG data, um, available.
Eric Kane (10:34):
And you know, that’s tremendously powerful. And of course, one of the things that kind of separates our work from, from perhaps that of others is, you know, we provide full transparency behind, uh, the data. So if someone is looking at the data available on, um, terminal, you can kind of click right through that data to the source document. So we do know that, you know, historically ESG data has kind of varied in terms of quality and compare ability. So having that sort of transparency to the source is certainly extremely useful and ensuring that that is accurate. And, and also looking to, to what the contexts around that data might be.
Greg White (11:15):
Yeah. So a particular company can determine how useful or how pointed it it as it is that their particular concern or problem or curiosity. Right,
Eric Kane (11:27):
absolutely. And they can look to see that they could identify peers and look to see where their peers are with respect to a certain issue. Um, you know, just to name one that I mentioned earlier, which relates of course to climate change. We know that’s a big area of interest, um, kind of across autos and other, um, industries. So certainly we provide a useful tool for companies to benchmark where they are, um, not only in terms of current emissions but also historic emissions and also setting targets to, to decarbonize going forward.
Greg White (12:02):
Yeah, I see that. I see where you can, uh, you can rank them against their peers and rank them against themselves historically. And it, it’s pretty simple. I mean, when you look at it, it’s pretty simple to tell where you stand and, and whether you’re progressing or regressing.
Eric Kane (12:20):
Absolutely. Yup. Yeah,
Scott Luton (12:22):
that’s useful. So let’s, um, speaking of the 500 data points, uh, for several thousand companies, gosh, I can only imagine the wealth of information that your teams grow. You’re growing team’s fingertips. So, so let’s broaden out a little bit more. So when you’re looking, you know, obviously it goes without saying, these are challenging times for so many people economically, um, health-wise, um, certainly the, the supply chain industry and, and, uh, and, and, and all of its many facets. Uh, these have been really challenging times. With that backdrop, what is in particular an issue or a news story or development, one or two of them that you and your team have been tracking more than others here in recent weeks?
Eric Kane (13:09):
Sure. I think the Corona virus, um, you know, has, has kind of taken over, uh, recently. Um, you know, that’s something obviously with its impact on, on the markets, uh, we’ve been looking to see how ESG investments, um, kind of fairing and in this market. Um, and then we of course also then looking to see how, um, the change in kind of business activity across all businesses has impacted, uh, things like greenhouse gas emissions and air pollution. Just to get a sense of, of, you know, what the kind of physical changes are and how that has implications for the environment. So that really relates of course to our ongoing, um, examination of, of climate and, and the risks and opportunities there.
Scott Luton (14:03):
Well, um, so we’ve been surprised and, and through a variety of, of interviews on our shows and, and over the last 45 days or so, uh, Greg, it seems like there’s been a, uh, a common thread of, of organizations and leaders and investment firms not being overly opportunistic, but finding opportunity and, and deals and invest in solid investments despite the environment. Is that kind of what you’ve been seeing as well, Greg?
Greg White (14:32):
Yeah, no doubt. I mean, I think if I, if I think about the theme we’ve seen evolving, um, this, first of all, this has given people, um, recognition of the impact we do have on the environment. Because, um, you know, no planes flying over w we talked without Hildreth and he was talking about the, the canals in Venice being clean enough to swim in. Um, and I, I think people can see the impact that we have on the environment every day, but also, um, companies are, you know, are seeing opportunity. I mean, there are still investments being made if you’re in the right type of industry and there are opportunities where, um, you know, companies can join together and, and advance the economic condition of both. And also companies are using this time to become really, really aware of their, um, environmental impact. And I think that, you know, this isn’t strangely an opportune time for this particular conference, this summit to be going on. Um, with everyone having everyone. I think having a new found awareness of, of environmental impact.
Scott Luton (15:50):
Hey Eric, I want to get you to kind of respond to that initially. And then I’ve got one follow up question for you related to the, the, the wide realm of ESG. So, so from a, um, any insights on from an investment, a deal-making? Um, anything Greg just shared there?
Eric Kane (16:09):
Sure. I think it’s absolutely right that the slowdown in certain business activities has kind of shed a light on, um, on what things look like, um, perhaps in a, in a less kind of carbon intensive world, which is certainly interesting. That of course has implications for a variety of different issues that we cover, whether it’s, you know, the future of carbon pricing. Um, we, we of course see an impact on oil prices, uh, which is, you know, interesting when we start to think about how different companies are transitioning away from oil and towards, you know, less carbon intensive forms of energy and perhaps how these sorts of markets, uh, factors might ultimately kind of drive that change perhaps a little faster than we anticipated. So there’s certainly a lot to to follow and I think it’s going to be, uh, an interesting several months, if not years, to, to see what these impacts really kind of play out to be over the longterm.
Scott Luton (17:20):
Agreed. Agreed. So within the ESG space that in entails so much, um, especially in today’s environment, what is, what is one subject or topic or issue or challenge that you’ve, that you like reporting and analyzing the most? Is there one that really sticks out?
Eric Kane (17:42):
There is, and I think that it’s, it really is climate, um, and you know, the efforts towards decarbonization. Um, I think it’s, it’s been a particular interest of mine since I, you know, began in the field over a decade ago and it’s, it’s one that I think has also really kind of captured the most attention within ESG over the last several years. So we’ve worked, uh, extensively on the issue, uh, at, at BI. We developed a new dataset, um, about a year ago where we actually looked to see if we could translate the different greenhouse gas reduction targets that companies state into kind of a common language, if you will, and then forecast performance out to 2030. And that data set covers over 500 companies right now. So it’s something we’re extremely excited about. Um, we actually just updated that data and we’ve had a lot of good response, um, to that data, um, from, from clients and other people.
Eric Kane (18:47):
So it’s certainly a space that continues to evolve and one that continues to attract a lot of attention and it seems like almost on a daily basis, if not a weekly basis, we get, um, you know, more and more companies coming out with really ambitious carbon targets. So just sticking with the oil and gas industry as, as an example, you know, we saw last week that shell came out with a new target and we’ve seen a number of the integrated oil and gas companies, especially in Europe, come out with, with ambitions for carbon neutrality, which really in our mind kind of suggests that they’re looking to really transition their business from a oil, which is obviously carbon intensive to renewable energy and, and, and far less carbon intensive forms of energy. So it’s an extremely exciting time and that’s certainly an initiative that I, that I’ve enjoyed covering
Scott Luton (19:40):
but also seems generally speaking in recent years, excuse me, that, uh, consumers as well as investors have taken a greater and greater interest in ESG related topics. And, uh, of course all three of us know about the triple bottom line and how more and more companies are, are looking at those and how they interplay with each other. Right. Uh, Greg, you made a great point earlier today when we were, uh, interviewing, uh, Lissandra now about how we can make a lot of the change more sustainable by making the financial business case for it, right?
Greg White (20:19):
Yeah. You know, we find that the hurdle for implementing some of the change that we’re talking about here is not insubstantial, but it also has a diminishing cost over time. Just like when you implement, implement any other new technology or new business process or that sort of thing. It, you know, it, it can be cost effective. And to motivate companies which have to make a profit, that’s how companies keep people employed and, and please their shareholders, um, to be economically feasible is it’s the way to get these initiatives working. And I, I really think, and you said earlier today, Scott, the people are figuring that out and you know, rather than demanding instantaneous change without solution, they are working together to find economical way points to get to a solution over time rather than one saying you must and the on the other party saying we want. Right. So, uh, I think we’re seeing a lot of progress in that regard and a lot of recognition, uh, with anyone who cares about these topics,
Scott Luton (21:36):
which should give lot ton of more fodder, Eric, for you and your team to, to digest and analyze and, and stand up new data groups and, and offer even more very valuable insights to the thousands of companies that, that your information is helping guide their decision making.
Eric Kane (21:55):
Absolutely. And you know, to the point that Greg made a few seconds ago, and one of the exciting developments that we saw last year was the, uh, business round tables revised statement on the purpose of the corporation. So that was something that was signed by over 180 CEOs from different companies, including Amazon city group, Walmart, et cetera, where they essentially said that the purpose of their corporation, um, with it’s should be modified so that it’s clear that, that these companies exist for the benefit of all stakeholders, not just shareholders. So I think that sort of development really does kind of emphasize the point that Greg made and indicate that the companies are taking these issues seriously. They’re, they’re willing to kind of revise their, their mission statements, if you will. And, you know, we’re, we’re continuing to track kind of what that means. Um, not only on, you know, the broad level, but when we look at specific companies within that group, how they’re actually kind of, you know, action in that statement. So it’s an extremely exciting time.
Scott Luton (23:06):
It is, uh, deeds, not words is one of the phrases that we like to say around here. All about action. Don’t give us lip service, go out there and lead. And that’s what we’d like to see. And clearly there’s a lot of action based leadership, both in general. We’re seeing more and more in this space. But you know, going, I hate to belabor a point, but Greg, we’ve seen it in each of these, these conversations we’ve been having. And on that note I should mention in case anyone is tuning into this episode and didn’t check out the earlier one when we referenced, uh, let’s see, Dre and Al, we were talking about Al Hildreth global energy manager at general motors who’s doing some big things in the space as well as Lissandra Welsh, who was a program manager for environmental sustainability with AIAG, which we’re gonna talk about in just a moment. Greg, you’re going to say something.
Greg White (23:57):
I just think it’s, um, you know, it’s important for companies to recognize that their brand identity and their esteem in the marketplace is now based on how they conduct themselves in business. And the, and, and how their business partners conduct themselves in business. You know, if you think about sustainability, fair trade, um, you know, things like, like forced labor, euphemism for slavery, you know, it’s very easy to discover that these things are occurring and brands have to recognize that their stakeholders are not just their shareholders as you said, Eric, and, and that their brand equity is a big part of their overall equity. And in order to maintain it, even if they only do it for selfish reasons, I don’t care just as long as they do it, but, but maintaining that brand equity is important is an important part of, um, producing profit and shareholder value and, and stakeholder esteem,
Scott Luton (25:06):
stakeholder esteem. I love that. Um, alright, so Eric, I want you to appreciate what you’re doing with AIG and looking forward to your comments is part of your keynote there. Um, but talk to the value of getting engaged and participating in AIG.
Eric Kane (25:25):
Sure. I’m very excited to be a part of the virtual conference next week. Um, I think there’s, there’s a tremendous amount of value of course, and engaging in a group like this and then an event like this. I think first and foremost from my standpoint, um, it’s an opportunity for help for us to really help, uh, the attendees understand how some of the ESG data that we, um, look at collect, analyze is ultimately being used to make decisions. And I think, you know, that sort of, uh, insight can ultimately help, you know, folks in the group understand, um, you know, the, the value of, of disclosing the data, the value of making sure that the data is comparable and to understand really how their stakeholders might, might use the data. So it’s, it’s a tremendous opportunity for us. And I think, you know, groups like AIG are essential in this kind of sustainability, uh, journey that many of us aren’t on because the sharing of ideas, uh, the sharing of experiences really kind of is critical in us getting to the point where I think we all want to be where we have, you know, standardized, um, data to evaluate companies.
Eric Kane (26:45):
We have standardized procedures, we have companies sharing best practices and, and you know, seeing those best practices kind of trickled down, uh, throughout supply chains and across industries. So it’s very exciting. And I’m, I’m honored to be a part of it.
Speaker 5 (27:01):
Yeah.
Scott Luton (27:01):
Outstanding. We are too. We are too, uh, automotive industry action group. And as Greg said earlier today, uh, action be the operative word. Uh, and, and love that. Uh, Greg, any follow up points about AIG based on what Eric just shared there?
Greg White (27:19):
You know, I’m thinking about the fact that a lot of people will listen to a lot of these episodes and they’ll probably hear me say this over and over again, but this is a really timely initiative by AIG. And I think also an example of leadership in terms of switching from a physical event to a virtual event and then making the event free to all, maybe a free for all, but certainly free to all. Um, and you know, that to me that is one of their many actions that speaks volumes.
Speaker 5 (27:55):
[inaudible]
Scott Luton (27:55):
agreed. Absolutely. And, and looking forward to, you know, uh, as one of the followups, Eric and Greg, uh, coming out of the, uh, corporate responsibility summit, we’re gonna be featuring a member of the AIG or to, to share some of the key takeaways for all of these, you know, these thought leaders are getting together and not only sharing best practices for what’s working in their neck of the woods, but you know, sharing and, and probably, uh, debating some of the topics. You know, as we’ve talked about through a lot of these conversations are a lot of these episodes you’ve got to have the passionate at and at times, um, uh, disagreeable conversations and move the whole industry forward. That’s how, that’s how it happened. So, um, alright, so Eric, we want to make sure that our listeners know how to connect with you in case they want to compare notes or check out, um, some of your work and some of your new projects and of course, how they can learn more about Bloomberg intelligence.
Speaker 5 (28:53):
[inaudible]
Eric Kane (28:53):
sure. Uh, certainly happy to hear from, from listeners. Uh, we’re always excited to engage on these topics. Um, our research is available of course on the Bloomberg terminal. Um, if folks are interested in getting a demo for the terminal, they can find out all the necessary information on bloomberg.com and folks can also reach out to me directly. My email address is, uh, cane in the number nineteen@bloomberg.net.
Speaker 5 (29:23):
[inaudible]
Scott Luton (29:23):
outstanding. Good stuff here. Eric, thanks so much for joining us. I know you’re busy and challenging times for all, but they’re really enjoyed your perspective here. And um, when to say big thanks, Eric Kane, senior ESG analyst with Bloomberg intelligence and don’t, don’t take off just yet as we wrap up here, Greg, a big key takeaway from this conversation.
Greg White (29:47):
You know, this let’s really drive home the point. How pervasive the importance of, um, corporate responsibility, environmental awareness, fair trade, all of those things are. I mean, when you talk to one of the biggest investment media organizations in addition to the largest automaker in the world in the same day, it really lets you know what the scale and scope of this initiative is. And I think that bodes well for the future of our planet.
Scott Luton (30:20):
Agreed. Absolutely. We’re going to leave it there for this episode. Really enjoy talking with Eric Kane, with Bloomberg intelligence, all the best to you, Eric. Looking forward to seeing you at the event coming up here, um, and uh, Greg to our audience. Uh, be sure to check out a wide variety of industry thought leadership at supply chain now, radio.com find us and subscribe wherever you get your podcasts from on behalf of the entire team, Scott Luton here wishing you a successful week ahead. Stay safe. No this brighter days. Certainly lie ahead. And with that duly noted. We’ll see you next time here on supply chain now.
Would you rather watch the show in action?
Watch as Scott and Greg welcome AIAG CR Summit speaker, Eric Kane, to Supply Chain Now.
Featured Guests
Eric Kane is a Senior Environmental, Social and Governance (ESG) Analyst for Bloomberg Intelligence, a research platform that provides context on industries, companies, government, litigation and the economy, available on the Bloomberg Professional Services at BI. Mr. Kane’s research focuses on identifying and analyzing current and future trends, including climate change, resource scarcity, and data security, and linking performance to financial value. Mr. Kane also specializes in understanding ESG disclosure and how key metrics can be incorporated in traditional company analysis. Prior to joining Bloomberg, Mr. Kane was the Health Care Sector Analyst at the Sustainability Accounting Standards Board (SASB) and a Senior Analyst at Innovest Strategic Value Advisors. Mr. Kane holds a Master of Public Administration from NYU Wagner Graduate School of Public Service and a degree in political science from Bates College.
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