When Bloomberg LP announced a plan to develop its own environmental, social, and governance scores, it entered a crowded but crucial market.
ESG, also known as sustainability or corporate social responsibility, is not just a nice-to-have feature. In 2019, an estimated $30 trillion of assets invested worldwide relied in some way on ESG information, up 34% since 2016. As more investors commit to sustainable investing, ESG scoring of companies and investments points the way.
As the product manager for sustainable finance solutions, Lenora Suki leads development of those scores for Bloomberg. The company announced its first environmental and social scores, covering the oil and gas industry, in August. And its first governance scores evaluate board composition for more than 4,300 companies in a variety of industries.
As Bloomberg adds new industries and new scores, Suki, who holds an MBA from MIT Sloan and is an MIT Sloan Industry Advisor, seeks ideas and feedback from experts outside the company and her area of expertise. We talked with her about how she develops ideas, how she vets them, and who is involved.
Who inspires you?
So many people inspire me. People who have succeeded in mobilizing capital for impact investment. People who innovate and reach across disciplines to address our most pressing social and environmental challenges. People who manage to hurdle massive odds and great hardship. And my daughter — it’s inspiring to see the world through fresh eyes, to find joy in the simple, to relearn again and again how to interact with love, patience, and gratitude.
Where do you get ideas?
The best ones come from reaching outside my area of expertise and knowledge. I am a consummate connector of people and ideas. Nothing gets me more excited than reading about or listening to something that seems unrelated on the surface but has some glimmer of insight for work or otherwise.
How are new ideas discovered and developed in your organization?
In the earliest stages of idea generation, we prioritize consultation with investors, business leaders, policymakers and NGOs. It’s so critical to ground the early stage thinking with both “blue sky” and market research. We dialogue widely internally as well — across the organization, across businesses. We also work hard to remain active participants and supporters in the broader knowledge ecosystem. Once we decide to pursue an idea, we bring together colleagues with wide-ranging experience into product teams that are dedicated to solving key problems. We use agile methods to plan and build incrementally and come together frequently to update, plan, and consider scope of activities relative to big-picture strategy.
How do you keep track of new ideas?
Unfortunately, this is my weak spot. Mostly in notes on my phone. But I do really like to get feedback on implementability and potential collaboration. That usually helps the viable ideas float or sink.
Who do you share new ideas with?
I have a list of people across different institutional landscapes with whom I’ve developed a great rapport specifically aimed at discussing ideas. Because I am interested in and often working across disciplines, geographies, for-profits, and non-profit, it’s important to know that I can reach out to people I trust to share even crazy ideas. These are people who appreciate even very early stage or undeveloped ideas, people who can critique, help reshape, suggest broader alternatives and even propose “giving” the ideas to people or organizations that are better positioned to pursue them.
When do you know it is time to abandon an idea?
That’s so hard. Some successful ideas take a very long time to come to fruition. Others happen fast. It depends on my appetite to be persistent, my level of passion, the amount of support from others, the potential level of regret, and the social and financial return. When none are there, it’s time to let go.
Maybe somewhat counterintuitively, while I generally feel that large setbacks are a good reason to systematically reconsider ideas to which I’m devoting time and energy, I’m convinced that is almost never the right time to abandon ship completely. Unless you’re forced by circumstances to give up on an idea, I think that there’s a natural release point that happens outside of the most intense conflicting emotions.
What was your worst idea?
To try to build a global network of forward-thinking affordable housing leaders in developing economies. At the time it turned out there really weren’t any! Or very few. Suffice to say you can’t build a network out of essentially nothing. That said, the world has changed since then, and there is more potential now in almost any industry where a group of leaders wants to integrate social inclusion and environmental sustainability directly into their business models.
How do you know an idea is a good one?
There’s a clear need, an addressable market, encouragement from potential customers, and a way through to a minimum viable product. And — very important — I can get excited about it and “fall in love with the problem.”
What is the biggest idea you are working on right now?
I’m leading development of Bloomberg’s first environmental, social, and governance scores. In the last year, we’ve already developed and released scores that are driven by both company-reported primary data and also a separate dataset driven by news sentiment and artificial intelligence models.
My focus is on developing a scalable, data- and news-driven, industry-specific, and transparent scoring approach for environmental and social risks and opportunities for 80-plus industries. We’ve already released scores for energy and chemicals companies, and each industry requires its own specific evaluation framework. It’s the first such innovation in an increasingly crowded market and Bloomberg’s first proprietary sustainability performance scores, so it’s challenging and exciting work.
At MIT Sloan, we talk about ideas made to matter — ideas that are carefully developed and have meaningful impact in the world. In that context — what is your idea made to matter?
The big question for me is how to incentivize large, organized, private actors — especially the biggest companies and capital providers — to transform how markets work to reflect the true costs and benefits related to factors that are not easily quantified in financial terms. For example, how a company plans and shapes its business activities for a decarbonized world, and how workforce diversity of all kinds and at all levels impacts the quality of management decisions. We need markets — and I mean this in the most expansive concept of markets, both micro and macro — to provide signals. Right now, those signals come from regulation, societal shifts, consumer preferences, controversies and crises, as well as increasingly activist investors convening around key goals, to name a few.
These “push” factors are definitely working; the transformation of business and finance is underway. The “pull” has to come from markets, in my opinion. Markets and the economic actors in them need information in a form that can be digested and interpreted.
Right now, information about sustainability is often non-financial and so diffuse and diverse that it’s difficult for decision-makers to digest and synthesize into strategic and operational decisions. What I want to do in my work is help address the market failures with a combination of information, capital, and convening and ecosystem building. The idea is to alleviate these constraints and deliver clearer market signals to the organizations that can do business and finance business that addresses these broader, tougher problems.