Directors & Officers, Bloomberg has arrived!!

It was several years ago now, I can’t even remember if it was pre or post GFC.  Maybe 2008.

On the front page of the Wall Street Journal, reporting about the lack of liquidity in the markets, it quoted a prominent investment banker as saying “all the brains are in Wall Street, and all the money is in China”. 

Overlooking the complete disgust in this racism, and narcissism, and ignorance, it was a fascinating comment for many reasons.  But the main one was the complete ignorance of this prominent investment banker representing his entire professional community on Wall Street about a country that is now a critical global player. 

I felt the shame he failed to recognise. 

I had just spent many years as a global equity analyst covering China (amongst others of course).  One report in particular that I wrote, in January 2000:  China:  From Command to Demand, China’s Century  was about China’s financial services sector.  It proved very popular I recall, as there had been little written to that date.  Most data was in Mandarin and my trusty team helped me translate and analyse it. A decade later so far so good; the Chinese banks are now listed and the largest in the world and the insurance companies are up there also.

My clients were the top 200 investors internationally; which included of course the largest fund managers in the United States.  So I was fortunate in meeting some very smart people.

But it also included a long period with the heads of some of the China’s largest financial institutions, doing due diligence, writing reports, and as a team leader on large scale transactions. In so doing I met some of the smartest people that I had met anywhere.  Including Wall Street.

Of course Wall Street is listening now, as China continues to exercise its significant strategic skills.

Why I am telling this story, is to illustrate the enormous gap in knowledge that can occur between “Wall Street” and a particular current and relevant subject.  A subject that is vitally important, as China was at the time [as an emerging power] but completely ignored by investment bankers.  And Bloomberg for that matter.

The same applies to the subject I have covered in the series of blogs on Directors and Officer and Peak Everything, about climate change.  I mentioned in this blog,  that Bloomberg was now gathering, analysing and reporting data from companies with respect to Sustainability. 

That information is likely to only be available on its Professional service on a screen that sits about three feet from every fund manager and investment banker around the world.

I now note that Sustainability is on the front page of Bloombergs Public website, with a big heading “New” [sans the analysis, which you have to pay for].    Can’t miss it.  By gathering the data from companies, and in the face of disparate reporting, it will be exposing those companies that are not reporting sufficient information, and those not reporting at all.  That’ll get the companies moving, and over time there will be convergence in standards and compliance which is critical for relative analysis.

[As an aside for those not in the "know".  Bloomberg offers a Professional service with almost unlimited analytical data and comparability for about US$5,000 per month per screen.  However you can view its 'free' website without those facilities on the net.]

This is of course magnificent news.  And I see two clear outcomes.  First, despite the best will of the organisation I covered in this blog to standardise reporting on climate change issues, Bloomberg’s data collection, analysis and reporting will, I am suggesting, have the greatest impact. 

Second, the reputed lack of fund manager interest and the ignorance in Wall Street, will disappear.  As the desk jockeys in the investment banks and fund managers around the world sit on their hands during this liquidity crisis, what better way to fill the time than to open up the new Bloomberg Sustainability site and have a look around.  A bit of analysis here, and bit of analysis there, and before you know it they will have invented a climate change CDO Swap product that will turn everybody into Sustainability experts.  Maybe even Moodys and S&P will rate it. 

Bloomberg setting up this site may well be one of the most critical tipping points in Sustainability.